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The benefits of a commercial credit card for practice finance

Many professional practice owners, such as dental, vision or veterinary, use their personal credit card for business purchases. While this may seem like a beneficial option from a rewards and convenience perspective, having a commercial credit card that is specifically designed to meet the needs of businesses should not be overlooked.






From gaining enhanced security, efficiency and rebates, to eliminating potentially significant personal finance challenges, there are many positive benefits that come with having a dedicated practice card.

Gain security and efficiency

Commercial credit cards can provide a more secure option for business owners by allowing for a variety of custom spending restrictions and limits. For example, the business owner can set the limit for office employees purchases at a much lower credit limit than what the owner has access to. While the owner can limit the purchasing power for employees to reduce risk and fraud potential, he or she can still have access to a higher credit limit to purchase consumable inventory and make other large monthly expenses. Business owners can also assign a payment strategy that not only prevents specific merchant groups, but also assigns transaction limits.

Efficiencies can also be gained for the back office. Many cards now offer seamless integration with accounting software programs, which allows for time-saving expense management. For example, through accounting software integration, charges will automatically by categorized into expense type which removes the need to enter them manually. Additionally, the reporting functionality associated with these accounts also tends to be more robust than consumer cards. This allows for expense segmentation and allocation, which can help businesses identify key areas for potential streamlining or more accurate budgeting.  

Often, online commercial card platforms allow for in-depth reporting, including access during the statement cycle to start their reconciliation process. Becoming more aware of transactions before statements are received allows business owners to be one step ahead when it comes time to reconcile.

Realize rewards and rates

While many personal cards tout attractive rewards programs, often the annual fee and true monetary value of those rewards is not as competitive as a commercial card rewards program.

Many commercial cards do not have an annual fee, and most offer cash rebates as rewards. Additionally, individual practices can look for an option that maximizes their overall spending such as earning a flat cash back percentage of total purchases. For those who need more spending power, there are also consortium programs that leverage the purchasing of a group of businesses, providing the necessary scale to receive higher rebates.

Commercial cards also tend to have more competitive rates and fee structures than personal credit cards, which can provide significant savings. With a personal card, the business owner will build credit under his or her own personal credit and be required to meet minimum payments. A commercial card credit line is determined by the financial performance of the business and purchases are paid in full monthly.

Eliminate personal concerns

If a business owner is using a personal card for practice expenses, they may risking their personal finances in several ways.

First, with each business purchase, an owner’s personal credit score and debt-to-income ratio may be adversely impacted. These two items are both key aspects of personal finance and are reviewed and considered when securing a variety of loans, including mortgages and auto.

Second, there is also the potential to confuse finances by inadvertently intermingling personal expenses with business expenses, which can lead to challenges in properly allocating those expenses for accounting and tax purposes.

Third, the business owner also has increased exposure to fraud and security risks that, unlike commercial cards, may not be protected. Actions like allowing employees access to personal credit cards and personal account log-ins provide openings that are eliminated with a commercial card program. And if fraud does occur, commercial cards may have protection that can cover losses. Commercial cards can allow many users within the program to view their specific purchases, while also allowing office managers and other administrators the ability to manage the program without impacting the owner’s individual credit.

Ultimately, while using a personal credit card may seem like it provides more perks and convenience, there are several significant business benefits for practices to implement a commercial credit card program. Not only will they minimize unnecessary risks, they will also gain many advantages that only a card designed specifically for a business can deliver.
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When you click links marked with the “‡” symbol, you will leave UMB’s Web site and go to Web sites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other Web sites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.