Business credit card: advantages, disadvantages and how to choose the best

The use of a business credit card has become a common practice among companies of all sizes, after all, it facilitates expense management, offers exclusive benefits and contributes to the financial organization. 

However, it is important to understand its characteristics before opting for one. 

In this article, we’ll explore the advantages, disadvantages, and provide detailed guidance on how to choose the best card for your business. Check it out below:

What is a business credit card?

The business credit card is a financial tool aimed at businesses, allowing companies to make payments and control expenses in a practical way.

This is because, unlike a personal credit card, it offers specific advantages for companies, such as a higher credit limit and detailed reports.

Business credit card features: 

This type of card allows you to centralize expenses from different employees on a single invoice. 

This facilitates financial control and enables more efficient management of business expenses.

Limit and Conditions: 

The limit of one business credit card is usually superior to personal cards, meeting the company’s cash flow and investment needs. 

Therefore, payment conditions are adapted to support business growth.

Membership requirements: 

To obtain a business card, it is necessary to prove the existence of the CNPJ, the financial strength of the company and, in some cases, the good financial health of the partners. 

This is because these criteria aim to ensure that the company has the capacity to cover expenses.

According to corporate finance expert Peter Drucker, “What can be measured can be improvedthe”. 

Therefore, the use of a business credit card makes it possible to do exactly that: measure and improve expense control.

Advantages of a business credit card

Choose one business credit card offers a series of advantages, which can be decisive for the company’s efficient financial management. 

Therefore, from the ease of access to credit to the exclusive benefits, there are several reasons to consider this tool.

Better expense management: 

One of the main benefits is the centralization of company expenses. 

This is because, by using a specific card for each sector or employee, it is possible to monitor expenses in detail, facilitating the preparation of financial reports and cost analysis.

Benefits and points programs: 

Many business cards offer rewards programs, allowing you to accumulate points that can be exchanged for travel, products or services. 

Additionally, there are benefits such as access to VIP lounges at airports and travel insurance, which can be a differentiator for companies that make frequent trips.

Improved cash flow: 

Common business credit card, the company can postpone the payment of expenses until the invoice due date, helping to balance cash flow. 

This is particularly useful during periods when there is a need for greater liquidity, allowing the company to maintain its operations without compromising its emergency reserve.

According to the Brazilian Association of Credit Card and Services Companies (ABECS), in 2023, the use of business credit cards grew 15%, driven by the need for greater financial control.

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Disadvantages of business credit cards

Despite the advantages, the business credit card It also has disadvantages that need to be evaluated before hiring. 

Therefore, understanding these points is essential to avoid financial problems in the future.

Debt risks: 

One of the biggest disadvantages is the possibility of debt. 

The irresponsible use of available credit can lead to accumulated debts, especially if expenses are not properly controlled, and this can compromise the company’s cash flow and generate high interest.

High fees and annual fees: 

Some business cards have annual fees and administrative fees that can be significant, depending on the benefits offered. It is crucial to assess whether the costs outweigh the benefits received, considering the company’s financial profile.

Complexity in expense control: 

For larger companies, managing credit cards from different sectors or employees can become complex. 

This requires strict control and the implementation of internal policies to ensure appropriate use.

How to choose the best business credit card?

The choice of business credit card ideal depends on the specific characteristics and needs of each company. 

Therefore, analyzing criteria such as rates, benefits and usage profile is essential to ensure a wise decision.

Assessment of fees and annuities: 

Compare the interest rates, annual fees and other costs of different cards available on the market. 

Some cards offer annual fee exemptions in the first few years, which can be attractive, but it is important to check the amounts charged later.

Benefits offered: 

Consider the benefits best suited to your company’s needs. Points programs, insurance and access to exclusive services can be important differentiators.

Companies that travel frequently, for example, can benefit from cards that offer discounts on air tickets and hotels.

Ease of control and reporting: 

Choose cards that offer management tools, such as applications that allow you to track expenses in real time and generate detailed reports, which facilitates the integration of expenses into the accounting system and improves financial control.

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The role of the business credit card in financial strategy

One business credit card Well chosen and used consciously, it can be a strategic ally in the financial management of any company. 

This is because it allows better organization of expenses and access to credit at opportune times.

Strategic use in times of crisis: 

In situations of low liquidity, the business card can be a tool to keep the business running. 

Therefore, using it strategically to cover emergency expenses helps preserve cash, as long as it is accompanied by a plan to pay off invoices.

Expense control on corporate travel: 

For companies that frequently send employees on trips, the business credit card can be used to centralize expenses, such as accommodation and transportation, as this facilitates accountability and expense analysis.

Contribution to building a good credit history: 

Responsible use of the card can contribute to building a good business credit history, as it facilitates access to financing and better conditions in future negotiations with banks and suppliers.

Future and Trends

The market for business credit card is constantly evolving, adapting to new needs and technologies. 

In this way, the digitalization of financial services and the search for more sustainable solutions have influenced the sector.

Digital cards and security: 

With the popularization of digital cards, transaction security has increased, reducing the risk of fraud. 

Furthermore, this trend facilitates integration with management applications, providing a more agile experience.

Cards with ESG programs: 

The companies are increasingly concerned about environmental, social and governance (ESG) issues. 

Therefore, some financial institutions now offer business credit cards that allocate part of the fees to social and environmental projects, allowing companies to align their values ​​with their financial practices.

Growth of fintechs: 

Fintechs have stood out in offering business credit cards, often with less bureaucracy and lower costs than traditional banks. 

This is because they offer financial products adapted to the needs of small and medium-sized companies, promoting greater competitiveness in the market.

Conclusion: 

The business credit card can be a great ally in financial management, as long as its advantages and disadvantages are understood. 

So, by considering the company’s needs and evaluating different options, it is possible to choose a card that optimizes expense control and facilitates business growth.

This is because, regardless of the size of the company, an informed decision can significantly contribute to long-term financial success.

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Roberta 6 de November de 2024