Credit-card issuers and banks have a wealth of options for small businesses, and many owners are taking advantage of the benefits they offer. According to the U.S. Small Business Administration, 65 percent of small companies use credit cards and about half of these cards have been established in the company’s name.

It is often much faster and easier for companies to open a credit-card account than to obtain other types of financing. A business credit card used solely for company purchases and expenses helps maintain more accurate expense records, making it easier to budget, plan, and spot tax deductions. It will also reduce the risk of co-mingling your personal and business expenses, which can save time and help avoid issues at tax time.

On a day-to-day basis, credit cards can simplify making purchases and help manage cash flow, as well as establish credit in your company’s name. Many business credit cards also offer valuable perks such as discounts and reward points that can help businesses save money.

With dozens of choices and attractive features, it’s not easy to find the best small business credit card for your company. Here are some helpful do’s and don’ts to help you choose wisely.

DO determine why you need the card.

Business credit cards offer numerous features, but not all of them are necessarily helpful for your business. Before you begin your search, get a clear picture about why you need the card and how you intend to use it. This will help you narrow down the choices and avoid the over-spending that can hurt your company’s bottom line.

If you need to make a large purchase for your business and will use a card to finance it, take advantage of a 0 percent introductory rate to keep the cost of credit low. If you or your team travels extensively, you might want a card with perks like access to airport VIP lounges. In some cases, cards without perks may offer better terms. If you’d like to have a card “just in case,” look for one with no fee.

It may make sense to have two cards, one for rewards and one with an option for carrying a balance. Keep in mind that you can always change or add cards to keep pace with the evolving needs of your business.

DO have a credit management strategy.

In addition to examining your business spending habits, it is critical to have a strategy for how you will manage your credit. For instance, if you plan to pay your balance in full each month, cards with longer grace periods or more generous rewards may be more appropriate. On the other hand, if you intend to carry a balance, the card’s annual percentage rate (APR) may be your number one priority.

Be careful about how many cards you distribute to employees and to whom. If your team’s individual spending habits are a concern, look into cards that have spending limits. Some firms have policies where a group of employees shares a spending limit.

DON’T be discouraged if your credit isn’t stellar.

It’s important to find out the credit worthiness that is acceptable to different card issuers. The business credit card industry is competitive, so those with excellent credit have the greatest choice of cards. However, a business owner with average or poor credit who does not qualify for the best cards can still find one that will serve as a short-term solution and, if managed well, will help build the company’s credit rating over time.

DO comparison shopping online.

Online credit-card comparison websites offer an easy option for sorting through the various offerings., and allow you to search for cards by a variety of categories, ranging from bank and card type to rates, benefits, and credit worthiness. You can even apply directly online.

DON’T rule out paying an annual fee.

You may not want to automatically disqualify cards that charge an annual fee. Because these cards often have higher rewards rates and signup bonuses, they may make sense if a particular benefit is worth more to you than the amount of the fee. Some cards with annual fees also have longer grace periods, offering up to 30 days compared to 20 days on other cards. This may be an important feature for managing your company’s cash flow. Before dismissing fee-based cards, consider your annual spending and the rewards rates of the cards you are considering.

DO use rewards strategically.

Many credit-card issuers offer rewards programs, but choosing the right one requires taking a close look at your business lifestyle. For instance, if you often entertain clients consider a card that rewards your restaurant spending. If your business requires a lot of long-distance travel, a card that allows you to redeem rewards for flights and hotels might be a good choice. A card that offers rewards on gas might be ideal if your business keeps employees on the road.

If travel isn’t a major factor, consider cards that offer cash back, but pay attention to the fine print. Higher payments may apply to only certain types of purchases, such as business supplies or gasoline.

DON’T apply for too many cards.

There are business credit cards for almost every kind of company, but you need to be selective in order to manage your credit well. Applying for dozens of different cards and being declined could negatively impact your credit report in addition to wasting time.  This may reduce your chances of being approved since there is no benefit to issuers if you have cards you don’t use.

DON’T put your personal credit at risk.

Don’t ignore the consequences of not making payments on time, as you may be putting your own personal credit score in jeopardy. It’s important to be aware of any penalties for not paying the bill in full each month or making a late payment. In addition to assessing penalties and fees, some card issuers may take away any rewards earned or increase your interest rate.

No matter which card you choose, make sure you completely understand the terms, conditions, and fees. Credit cards provide tremendous convenience and flexibility for small-business owners, but this may come at a cost if you fail to meet your financial obligations.

Remember that improving creditworthiness should always be one of your key business goals, since it is critical for obtaining funding opportunities down the road. While small business credit cards may be good for certain expenses, Summit Financial Resources offers financing programs for small businesses that provide working capital when a credit card is not the ideal solution.

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Summit Financial Resources specializes in working capital financing for small to medium-sized businesses that need increased cash flow. We provide working capital financing through invoice factoring, asset-based lending, inventory lending, and equipment financing.