Industry Insights

6 Reasons to Get a Business Credit Card for Your Contracting Business

Kristen Frisa
August 31, 2023
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Contracting companies can reap big benefits from using credit cards in their small construction businesses.

Business owners and consumers alike are often hyper-aware of the risks of credit card processing – like taking on too much debt and racking up crazy interest charges. This demonization is a bit overwrought. When used correctly, small business credit cards can be a great payment option in a construction business' overall financial repertoire and benefit the company in many ways.

This article will cover why construction contractors should use credit cards in their business operations.

1. Building business credit

The mechanisms behind credit scores are a great financial mystery to many people. They assume that if they pay their bills on time, their credit will be great, but the reality behind credit is a bit more complex. Consumers must borrow money to build a solid credit history and high credit scores. The same is true for businesses.

Paying the bills on time counts as borrowing money and builds credit because you're regularly paying back money you owe, but it only tells creditors part of the story. When responsibly used, credit products like a contractor credit card and a business loan show creditors you can handle credit and, therefore, improve your credit score.

A good credit score is essential for a construction industry business's financial future. Your borrowing track record could make it possible for you to borrow larger credit amounts sometime in the future, secure construction financing or a line of credit that could offer you a cash flow buffer during your construction projects.

Excellent business credit can secure your business lower interest rates, so you can borrow cheaper, larger credit amounts and access the best credit card in the future. Increasingly, anyone from suppliers to landlords wants access to credit scores, as it shows your business's sophistication and professionalism. A robust credit history can be a bargaining chip for more favorable construction financing options and terms and better product prices. To help build your financial background as a construction business owner, ensure the credit card companies your business works with report to the credit bureaus.

2. Separate your personal expenses from business expenses

Many small business owners use personal credit cards to make business expenses. This can work for a while, but as small businesses grow, it becomes more important to separate business expenses from personal ones and get a new credit card specifically for your construction business.

Tracking business expenses becomes more important as your contracting income takes off – as a construction business owner, you’ll need to deduct your work purchases as part of your income tax reporting.

Separating business credit from personal credit can protect your personal credit score if your business credit suffers in the early years of your construction business.

3. Increased transparency and spending control

As a business grows, employees increasingly need to make purchases related to business activities. Other payment methods are clunky for this purpose: cash is too hard to track, checks result in slow payments and construction business owners can't hand over their personal credit cards every time an employee needs to spend some money.

The best business credit cards can help control and track employee expenditures for your business. With Truss, expense management is a snap— simply issue unlimited free credit cards for employees with individual spending limits assigned to each one. You'll never wonder where the company money is going – you can track card spending in real-time.

4. Fast and easy reconciliation

Tracking down employee payment receipts to use for reconciliation can be near impossible. Receipts get wet, lost, or crumpled between truck seats and never return to the office. At month's end, office staff have to manually input info into spreadsheets, a time-consuming and error-prone process.

When employees make a purchase with a Truss construction business credit card, they are prompted via automatic text message to upload an image of the receipt, reconciling the expense in real-time. No more chasing down long-lost receipts.

5. Improved security

Passing around a personal credit card for your employees can lead to huge security risks, including credit card fraud. Assigning a new credit card to each individual employee leads to improved expense tracking and saves you from passing around your credit card PIN.

Each business credit card from Truss can be given an individual preset spending limit and expiration date – even if a single card is exposed to fraud, the business' exposure is limited.

6. Convenience

These days a lot of purchases are made through online portals. Unlike cash and debit cards, credit card processing facilitates a fast and simple payment method for online purchases for your staff while keeping you in the loop through each transaction.

With employee credit cards, you no longer need to sift through expense reports for each employee for each payroll period. Instead, entrust employees to make business-related credit card payments on their own, and leave reimbursements and slow payments in the past.

Why get a construction credit card

Business credit cards are an excellent tool for building business credit to access larger credit amounts, introducing a more convenient payment method for employee spending, and increasing the financial security of your construction business.

Unlike other popular credit cards, Truss credit cards are built specifically for construction companies and require no setup fees or monthly credit card fees, and no annual fee. You can issue unlimited individual free credit cards to your employees, create individual preset spending limits and track spending in real-time.

Find out more about how Truss contractor credit cards can improve your construction business' spending, tracking, and financial savvy today!

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