Ready to see how
much you qualify for?
Let's get started
As a small business owner, you have a lot of things on your plate. You’re responsible for making sure your company is profitable, and you also have to handle the day-to-day tasks of running it. Because of this, it’s important to make sure you have the best tools and resources available to help you succeed. One question that comes up often is whether a business credit card or business line of credit is better. In this blog post, we’ll compare and contrast these two options so you can decide which one is right for you.
A business credit card is a credit card that is specifically for businesses. Business credit cards have many of the same features as personal credit cards, but they also come with some additional benefits that can be helpful for businesses. For example, most business credit cards offer rewards programs that give you points or cash back for each purchase you make. Additionally, many business credit cards come with perks like travel insurance and extended warranties.
A business line of credit is a type of loan that allows you to borrow money up to a certain limit. You can use the money from your business line of credit for anything you need, and you only have to pay interest on the amount of money you actually borrow. Business lines of credit typically have lower interest rates than business credit cards.
There are a few key differences between business credit cards and business lines of credit. One of the most important is that a business credit card is unsecured, meaning you don’t have to put up any collateral to get the card. This makes business credit cards easier to qualify for, but it also means they typically have higher interest rates than business lines of credit.
Another difference is that a business line of credit gives you more flexibility in how you use the money. With a business credit card, you can only use the card for purchases. With a business line of credit, you can use the money for anything you need, including inventory, equipment, or even working capital.
Finally, business lines of credit typically have higher limits than business credit cards. This can be helpful if you need to make a large purchase or if you want to have a cushion of cash available in case of an emergency.
While both business credit cards and business lines of credit have their own set of advantages, there are also some benefits to having both.
One of the biggest benefits is that you’ll have access to more funds. If you only have a business credit card, you’re limited to your credit limit. But if you have a business line of credit as well, you can access those funds if you need them.
Another benefit is that you can use each one for different purposes. You might use your business credit card for everyday expenses, and then use your business line of credit for larger purchases. Or, you might use your business line of credit to cover unexpected expenses, and then use your business credit card to earn rewards on your everyday spending.
There’s no one-size-fits-all answer when it comes to choosing between a business credit card and a business line of credit. The best option for you will depend on your specific needs and financial situation. However, having both can give you the flexibility and access to funds that you need to run your business successfully.
Still have questions about business credit cards or lines of credit? We’re here to help. Contact us today and one of our advisors will be happy to answer all of your questions.
