A credit card can be useful if used properly. It is a convenient way to pay for purchases without having the need to bring a large bundle of cash. In a business, credit cards will save the owner time and money and will also bring rewards if the credit card has a cashback or point system.

A business credit card can even help if the owner is in a temporarily tight bind and needs a cash advance. While this is not recommended due to the high interest rates for cash advances, it can come in handy for a short period of time. Just be sure the cash advance is paid off as soon as it is financially feasible, and avoid frequent cash advances or use of the credit card if funds are low.

I would definitely say that a credit card is important for business. For one thing, it simplifies your tax records. American Express will provide you with a year-end summary of your charges, separated into categories for tax purposes. That can make filing your tax return easier. Another way that credit cards help in running a business is that they afford you more access to credit lines. Even if you expect your expenses to remain steady, you'll need the flexibility to deal with sudden costs. This is where having ready access to credit can really be a lifesaver for you. So, credit cards are pretty important to running a successful business in my opinion.

I think a credit card for business is extremely valuable. Get one that offers rewards. I run EVERYTHING through my business card. I've taken trips before with the airline miles or occasionally get one of the other reward offers such as cash back. As long you you're careful with the card and pay the balance off every month, why not get the free rewards.

I think a small business should grow at a sustainable rate and that can mean not leveraging your future on current capital needs. Our photography business had a credit card as a safety net, but then the CC company went bankrupt, leaving us with no reserves and a hairy balance to repay. Very dumb on our part. We paid all debts off in Nov '09, and now have six months of operating expenses and four months salary saved up. I'm sleeping much better at night knowing our receivables aren't predetermined to pay off debt. Plus we're in a position to acquire other failing photography firms' equipment and talent at deep discounts.

Cash flow your business if you can. Any mistakes you make in purchasing, marketing, etc will only cost you the cash you're out, not that amount plus some insane percentage as well for years on end. Credit compounds those errors and you might end up paying off mistakes years after the business is done. At best it gives you a false sense of security and business health, but the asset/liabilities sheet doesn't lie.

Just my $0.02 (paid in cash),
Ryan
(If you want to read more about how Advanta's bankruptcy inspired me to take our biz in a debt-free direction, you can read that specific post and other small biz entries our company blog at:http://radiantphotography.com/blog/?p=105 )

Hi @aiai!

Credit cards can be handy if you are running your own business. It will help you conserve cash when you are buying equipments and supplies that you need to keep your business moving. But you should use them with caution and only for the sake of your business.
These are some of the advantages of using credit cards for your business:
*It has higher credit limits and make it easier for you to use them to make major purchases for your business.
*Credit cards will help boost your business credit rating fast, that is, if you use them right and make prompt payments
*You will be able to control employee spending since it will enable to set limits on spending by employees.
*You will be able to have business perks or rewards that include discount on business travel and on shopping at any business supply outlets.

Source:
http://www.allbusiness.com/business-finance/business-loans-business-credit/11197-1.html