Ask the Experts: Arturo E. Osorio in WalletHub how important are business credit cards?

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Thursday, June 1, 2017
Newark, NJ


Business credit cards are great for earning rewards in important spending categories, such as office supplies and telecommunication services. They also provide helpful expense tracking features and allow you to give employees cards with custom spending limits. You'll even earn rewards on their purchases. 

Business credit cards are best for purchases that you will pay for in full by the end of the month. But they are not great financing vehicles because the Credit CARD Act only applies to consumer credit cards. As a result, small business credit cards are subject to arbitrary interest rate increases. This lack of debt stability is why we recommend using a 0% consumer credit card for your small business financing needs.

How important are credit cards to small business owners? 

Arturo E. Osorio, assistant professor of professional practice – entrepreneurship, Management & Global Business at Rutgers Business School said: "Credit cards are key to operate small businesses. As part of the everyday operations, credit cards are sources of short-term financing and emergency lines for small-unexpected events. When starting a business, credit cards are useful as a foot in the door to first stablish a relationship with a financial institution. They also serve, at this initial stage, as financial bridge for operational expenses. Small businesses can also use credit cards, through financial discipline, as a record keeper of transactions including administrative expenses.

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TAGS: Arturo Osorio Fernandez Entrepreneurship Management and Global Business Small Business Development