Business credit cards offer considerably higher credit limits, making them very attractive for small businesses. Furthermore, there are other differences to standard credit cards, such as enticing reward schemes and greater cashback rates.

But is it better to have just a single credit card for your business? Or are there benefits to having multiple cards for your company?

Advantages

Separate Expenses

One of the advantages of having multiple cards is that you can separate expenses by department. If each department is given its own dedicated credit card to use for purchases, the process of constructing spending reports will be made a lot simpler. You will be able to deduce which divisions are costing too much, or which departments should have their budgets increased.

Moreover, you can have a business credit card solely for office equipment expenditures, or another one for travel expenses for example. Such a system will save a lot of time and hassle in reporting your finances.

Maximising Rewards

As mentioned previously, business credit cards offer great rewards and cashback percentages on purchases. In fact, they are often better than those promised by personal credit cards. Banks are constantly looking to one-up each other by putting forward more and more generous rewards for their customers.

Depending on your business’ needs, it may be advantageous to have multiple business credit cards so that you can receive the benefits from multiple banks. For example, one business credit card can be used to build up airline points, saving a lot of money on company travel expenses. You can then utilise another card which offers cashback for any high-value purchases for your firm.

Disadvantages

If your business is still very small, it may not be worth getting multiple business credit cards. This is because many banks offer additional rewards if you spend over a certain amount in a given timeframe. Your small business may fall short of this figure, in which case you will miss out on the benefit. Since a lot of these cards have an annual fee attached to them (some in excess of £500 per annum), it would be unwise to have several credit cards that you are not able to make the most of.

You may be tempted to open multiple business credit card accounts if you are struggling to pay off existing cards. This is most definitely a bad idea.

First of all, your business’ credit score will take a large hit. With a low credit score it will become significantly more difficult to get loans for your company, business insurance costs will increase and you will no longer be eligible for almost all business credit cards. Furthermore, interest rates on business credit cards are far from competitive compared to regular cards. They are a lot higher, so if you don’t pay them off in time you will be charged much more interest.