How many business credit cards should I have for my personal insurance?

Here’s how to decide whether adding more accounts to your credit portfolio makes sense and what the benefits will be for doing so.

Should you own multiple business credit cards?

Just as consumers sometimes need more than one personal credit card to pay for the things they want and to build good credit, small-business owners typically have multiple business credit cards to take advantage of the same strategy.

The main reason you will likely want a more robust small-business credit card portfolio is the immediate borrowing power they offer via credit lines. Although some business cards have high credit limits, especially when compared to personal cards, the credit line on a single business card may fall short. When you’re running a business, you’ll likely need sufficient access to capital for everything from start up costs and operations management to emergency coverage.

For example, the card you have may come with a $20,000 limit, but for one month, you may find that you need to charge $30,000. In that case, you’ll want to have at least two cards with the same limit on hand, but three is preferable, as exhausting the limits on those accounts can hurt your credit rating.

How many business credit cards should I have for my personal insurance?
How many business credit cards should I have for my personal insurance?

Plus, the more business credit cards you have, the higher your available credit will be. The more available credit you have, the easier it can be to maintain a low credit utilization ratio, which can help you build business credit.

Benefits of owning multiple business credit cards

Unlike small business loans, business credit cards often come with special perks and rewards. You probably won’t get all the perks you want out of one single card, but by layering them, you can enjoy a variety of benefits.

Look for cards that offer the type of perks that are going to help you and your business succeed. These might include:

  • 0% intro APR offers. There’s nothing like borrowing money from a bank without having to pay any financing fees. If you have a business card offering a 0 percent intro APR, you can buy what you need without additional interest being added — at least until the introductory period is over.
  • Rewards programs. Different cards offer different rewards programs. Some may give you bonus rewards on phone bills, office supplies or advertising, while others might offer cash back at a flat rate on all purchases.
  • Unique perks. Some small-business credit cards feature access to accounting systems to keep you organized and help you maximize your tax deductions, as well as itemized quarterly or year-end reports with spending categories. Others may not have such robust systems.
  • Free employee cards. Want to give certain employees the opportunity to charge on your account? Not all corporate credit cards offer free employee cards. Those that do should let you customize their access so that you’ll be protected against unauthorized charges.
  • The ability to build business credit. Not all business cards report activity to the business credit bureaus, such as Dun & Bradstreet or Equifax. In fact, they may only send negative information to those agencies. Before you apply, contact the issuer and ask about its reporting practices.
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