Like your personal credit card, business credit cards allow companies to quickly and easily make purchases without the use of cash. Responsible use of a business credit card can also help a company establish its creditworthiness and better manage its expenses. Unlike your personal credit card, however, a business credit card is in most cases solely connected to your business’s credit history and thus separate from your own.

While the evaluation process varies among companies offering business credit cards, you can expect that your business’s FICO score will be considered. To build your business credit rating you need to make sure that your business is registered with the three major business credit bureaus, that your business has a bank account, and that you have credit with at least five vendors or suppliers that report to the credit bureaus.

It is important to research different credit card companies and offers to determine which type of account will best suit the needs of your business. Many cards come with low annual membership costs, overdraft protection and other features, such as airline miles or cash-back programs, that may be particularly helpful to your business.

To see if a business credit card will be appropriate for your business, here are some of its pros and cons:

Pros

• Build your business’s creditworthiness

• Keep track of your expenses with itemized monthly statements

• Make purchases without needing cash

• Quick access to working capital in case of emergency

• May receive special incentives and rewards programs for purchases

Cons

• Temptation to spend more

• Need to build a good business credit rating

• Not usually available to start-ups