When setting up our own company or business, we always want to reduce the risk of bankruptcy. So, before starting any activity, we may be filled with doubts or questions when we are beginners.
One of the questions most people might ask is how many commercial credit cards they should have for their company. This is an especially important question, as it could determine whether you manage your company’s finances well.
How many business credit cards should my company have?
Generally, most company owners hold between 1 and 3 business credit cards. However, this number can vary depending on how well you manage your business. Also, the number of cards changes if you have a large or small business according to your needs.
One way to determine how many cards you need is to study how much you invest, how much you earn, and how often you make payments.
On the other hand, you can consider that if your company does not spend more than $6000 on credit cards, one credit card will be enough. As this amount increases, you may consider simultaneously increasing the number of business credit cards.
However, before applying for more than one card, remember that you will have to cover these amounts, so ask yourself first whether you will be able to pay them off on time. Otherwise, you could find yourself in a difficult situation where you will have a lot of interest amounts.
If it is easier to pay off your debts, then take advantage of having more than one credit card.
Another way you might find out how many business credit cards you need for your business is to look into rewards programs. You can apply for cards that offer great travel benefits, cash back, or points you can redeem in various ways.
What benefits can I get from having one or more business credit cards?
The main benefit of business credit cards is that you can have separate personal and business credit.
In addition, by having more than one credit card, you can increase your business credit score by splitting the payments on the cards. But it can also affect your score if you fail to pay on time.
You may also benefit from splitting credit cards by expense, making your finances more organized and easier to manage.
You could use one card to pay suppliers, another for general on-site expenses, and another for transportation or travel costs.
What is the limit on the number of commercial cards a business can apply for?
There is no limit to the number of commercial cards. However, this does not mean that you should have as many as possible because remember that if you do not know how to manage your expenses well, the day could come when you have to pay the installments, and you will not have the money.
If you want more than one, you can request them, but try not to request them simultaneously or for a short period between them. Otherwise, your business credit score could be affected.
Does having more than one commercial card affect my credit score?
The truth is that this will depend on the types of business credit cards you have. In the case of corporate cards, they do not affect your credit.
But, in the case of small business cards, they do affect you because the card activity will be reflected on your credit report. Because of this, if you miss payments or pay late, your credit will be affected.
This applies to either one card or more than one card. Having more than one small business card increases the likelihood of affecting your personal credit.