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When you first launched your small business, you might have been able to get away with putting your business expenses on a personal credit card. But as your business grows, your needs will change — and you may need to upgrade to a business credit card that better meets your needs. These credit cards offer some advantages that will appeal to owners of growing businesses.
But opening a business credit card isn’t always necessary, so how do you know if you need one? Here are six signs your small business needs to upgrade to a business credit card. 
1. You’re hiring
If you’re bringing on new employees who will be authorized to make business purchases, you’re going to need a business credit card. For one thing, you don’t want to share your personal credit card around the workplace. Plus, many credit cards offer unlimited employee cards on a single business account for free. In some cases, you can even add custom spending limits for each employee. All employee activity will show up on one monthly statement for your convenience.
2. Your rewards aren’t valuable enough
Business credit cards often offer rewards that are tailored for business, and they help you earn rewards on common business expenses like office supplies, phone and internet services, gas, and dining. If your personal credit card’s rewards don’t align with your business spending, you should consider upgrading, since you might be missing out on valuable rewards.
3. You’re pushing the limit
If you’re maxing out your personal credit card every month to keep your business running, it’s probably time to apply for a business card. Remember, using too much of your credit card balance is bad for your credit, and an ideal credit utilization rate is around 30%. Business credit cards often come with higher spending limits that will give you some extra breathing room.
4. You’re incorporating
Incorporating your business — for instance, changing your business into an LLC, S corporation, or C corporation — is often a wise financial decision, as it protects your personal assets and finances from business debts and losses.
If you’re incorporating your business, it’s an opportune time to get a business credit card and completely separate your personal and business finances.
5. You need to build business credit
Just like individuals, businesses can have credit reports and scores. If you ever need to secure business financing, lenders and creditors will use your business credit score to determine your eligibility for a loan or additional credit. If that seems like something you’ll need in the future, you can start building your business credit now by opening a business credit card.
6. You need better reporting
If you’re having trouble keeping track of your business spending, business credit cards can help. They often offer highly detailed credit card statements, reports, and spending summaries so you can track where your money’s going. Some credit cards also offer expense management features, which allow you and your employees to submit receipts and notes along with charges. Some cards will even integrate data with your bookkeeping or accounting system.
There are many possible advantages to a business credit card, but before you apply for one, check your credit score. That way you’ll have the best possible chance of getting approved. You can check your credit report for free at Credit.com.
This article originally appeared on Credit.com. Credit.com is a USA TODAY content partner offering personal finance news and commentary. Its content is produced independently of USA TODAY. Brian Acton is a freelance writer and contributor at Credit.com. Several years ago, as he worked to pay down debt and purchase a home, Brian became interested in personal finance and credit. He has been covering these topics ever since. Brian has a BA in History from Salisbury University and an MBA from UMUC. He lives in Maryland with his wife and two dogs. More by Brian Acton

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