Wielding a business credit card takes some serious responsibility. If used right, a credit card for business purposes only can be used to free up cash flow and to keep your business running smoothly. If abused, business credit cards can end up causing your business serious financial harm. This is why it is so important to not take your credit line for granted. If you run a small business, this is especially imperative, because if you max out your cards, you could not only wind up with debt – you could also wind up with a problem trying to fill orders and purchase supplies. Here are some business credit card do’s and dont’s.

Do use your credit card only for items that need to be placed on your credit line. For instance, if you need to produce an order for a client, you want to use your business credit card to purchase the supplies needed to create that order. Hopefully, the invoice will be paid before your credit card bill is due. When your bill comes along, not only will you have enough to pay back the balance – you will also have capital profit that can be placed back into your business.

Do use your business credit card for the sake of racking up bonus points. For instance, if you fly a lot for your business, you want to purchase the airline tickets with your business credit card, so that you can start accruing the miles. Basically, you’ll get a bigger return by using your company credit card. You may also want to use your company credit card for restaurant purchases as well, because this is another way to accrue points. If you are taking clients out to dinner, opt to pay for the meal with your credit card – not only will you get points with your credit card company, you may also secure a new client.

Don’t use the credit card for anything except business related expenses. The moment you use the card for non-business related expenditures is the moment you go off on the wrong track – not only is it illegal in some regards, it may also confuse your book keeping process. Having a credit card is a great way to keep all of your business expenses in one neatly organized category. When you confuse personal expenses with business expenses, it could throw everything off track.

Don’t max out your credit card. This may seem like a simple one, but it is one of the major reasons why businesses go into debt – they max out their credit card. So, you want to be smart about each and every purchase. You want to only spend what you have. If you have an order that is bigger than you can handle, you may want to speak to investors, or ship the order in pieces. When you max out a business credit card, it may be harder to pay your balance. In the end, if you default on one credit card, your business could lose clout with banking institutions, interest rates will rise and you won’t be able to get credit anywhere else – so be sure to spend wisely.

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