By: Matthew Gillman, Business Financing Expert & SMB Compass Founder
Business credit cards offer a variety of benefits that can help medical practitioners get their finances in order, enjoy rewards and special privileges, and make online purchases without worrying about upfront costs.
If you’re thinking about getting a business credit card to fill in any gaps in your cash flow, this is the best time. Considering that April is Financial Literacy Month in the U.S., you could use a business credit card to stretch your budget and put your money on certain investments that drive more income.
This article will describe what a business credit card is and how to use it effectively for your medical practice’s growth.
What is a business credit card?
A business credit card functions like any credit card available for personal use. It is issued to a business account by banks as long as you are an existing customer. Business credit cards usually give you a credit limit according to your credit score.
Everyone is eligible to get a business credit card as long as they own a business. Whether you’re a sole proprietor or a large corporation, you may use a business credit card for various expenses such as purchasing office furniture or paying for online transactions.
While business credit cards offer tremendous benefits to users, you must remember to pay your balances before interest starts accruing. New entrepreneurs often fall prey to using business credit cards for personal use, which may become problematic when managing your cash flow.
Why your medical practice needs a business credit card
If you’re running a medical practice, business credit cards may be vital to your business, especially when you’re running low on cash. Below are some of the main reasons your practice could use a business credit card.
1Manage cash flow more efficiently
Business credit cards are beneficial for healthcare practitioners because it allows you to manage your finances more efficiently. Using one to separate your personal and business expenses makes it easier to organize your cash flow and keep accurate records. It also becomes easier to cover short-term expenses, such as purchasing new office supplies, paying billers, or purchasing new equipment and paying them in equal monthly installments.
2You have a record of all your transactions
Every month, you will receive your credit card statement that outlines all the transactions you made for a certain period. This is advantageous for your company because you can see which transactions can be eliminated in the future and which transactions you need to spend more on. You also have a physical or digital record of where your money went during the month.
3Take advantage of exclusive perks and rewards
Business credit card issuers offer rewards, exclusive discounts, and other privileges to its loyal cardholders. In some cases, you may be qualified for rebates every time you use your card. Some perks also include airline miles, which can be very helpful if you are traveling for work.
A Visa Small Business Insights survey revealed that small to mid-sized business owners who have a business credit card spend about 2.5 times more than consumer credit cardholders do. The opportunity here is that banks and other credit card issuers will find the best deals to hook you into applying for their credit card.
4Make online purchases
It’s easier to make online transactions when you have a business credit card ready. You can go to Amazon to find more affordable deals and compare product specifications, prices, and sellers.
Also, having a business credit card allows you to skip going to brick-and-mortar stores because you can simply choose your needs online, pay using your business credit card, and wait for the courier to deliver your orders.
5Pay bills online
Your healthcare practice can get busy sometimes that you no longer have the time to go out and pay your bills. Thankfully, bills payments can be made online, but you usually need a business credit card to pay for it, especially in the absence of a debit card.
Paying your bills online ensures that you’re able to pay for electricity, water and Internet monthly and avoid having your lines cut in the middle of treating patients.
6Withdraw funds in case of an emergency
As you run your practice, it’s inevitable to experience any shortage in cash. During emergencies such as equipment repairs, hiring temporary employees, and the like, you can use your business credit card to get cash advances. You may draw from your business credit card’s line of credit, as long as you still have available credit.
Before doing so, check with the credit card provider and ask for their terms. Know how much interest will be applied to the amount you wish to withdraw and the limit when taking out money.
Using business credit card cash advances will go a long way in securing more cash without worrying about loan applications. You can simply go to an ATM to withdraw the funds you need.
7Build up your credit
Paying your credit card balances on time is reflected on your credit report. Your statements will show whether you’re paying your bills on time, if you’re maximizing your credit limit, if you’re going beyond the ideal credit utilization, or if you’re paying more than the minimum amount due.
Building up your credit by simply paying your business credit card on time can help you secure a loan in the future, especially if you’re planning to grow your healthcare practice. When you’re consistently paying off debts on time, you can get higher credit scores. Higher credit scores usually mean getting a loan with better terms and rates.
To Wrap Up
Business credit cards can help you bring your business forward when used wisely. You no longer have to wonder where your money went, making it easier to manage your cash flow. Just remember to settle your payments immediately once you’ve received your statement. That way, you can enjoy your business credit card to its full potential.
About the Author – Matthew Gillman is a business financing expert with more than a decade of experience in commercial lending. He is the founder and CEO of SMB Compass, a specialty finance company providing education and financing options for business owners.