Why A Credit Card Can Be Good For Your Business Cash Flow

Credit card for business payments

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Small and medium-sized enterprises (SMEs) are an indispensable part of the Malaysian economy. However, they also face some huge issues, chief among them being inconsistent access to funding and cash flow. 

Despite accounting for approximately 97.4% of all businesses in Malaysia in 2021 (around 1,226,494 businesses) and up to 37.4% of Malaysia’s total GDP in that same year, access to funding remains a challenge.

This is because their size can work against them when it comes to obtaining sufficient capital in a timely manner, not to mention the fact that any sort of delayed payments will affect SMEs much more than larger businesses. 

This is when using a credit card for your business can be an advantage. All cards have a pre-approved credit limit, which means you have a source of funds readily accessible for all your working capital needs. But, as with any other credit card usage, be sure to pay on time each month to ensure you don’t incur more interest payments.

If you operate a business, using a payment platform like CardUp also means you can start using your credit card for expenses that typically don’t accept card payments, such as rent, payroll and payments.

Should you use a business or personal credit card?

While both personal and business credit cards give you access to credit, there are important differences between the two.

Business credit cardPersonal credit card
- Usually comes with higher spending limits
- Gives rewards for business operations expense categories
- Offers customisable spending limits for multiple employees
- Allows for itemisation for tax and bookkeeping purposes
- Spending limit is based on individual income level
- Earn rewards such as air miles and cashback, especially in grocery and personal shopping categories
- Credit card record affects your personal credit score
- Usually only provides supplementary cards for family members

Both business and personal credit card users can use CardUp’s all-in-one payment platform to improve cash flow and save time spent on bookkeeping!

How to benefit from using a credit card for your business?

A credit card can go a long way to relieve the financial burden that is often placed on SMEs. Here are the 5 main benefits you should know:

1. Improve working capital

Working capital is very important to businesses of all sizes. SMEs in particular are very vulnerable due to their relative lack of resources and inability to build funds quickly. Using a credit card allows business owners an opportunity to instantly access funds and enjoy up to 55 days of payment terms at zero to low interest rates. It’s a perfect solution for short-term working capital needs, and ensures they have leeway to continue operations if any unforeseen circumstances occur.

CardUp helps you extend your payment terms by up to 2 months by enabling you to put a wide range of business expenses on your card. This helps free up cash on hand for your business. Try it out for FREE yourself! (Use code MYNEWFREE12)

2. Faster access to funding

Credit cards offer faster access to funding as you already have a line of credit pre-approved, sitting in your back pocket ready to be used. Unlike a loan where lengthy application forms need to be filled, financial statements need to be submitted and long approval processes are required. With a credit card, you can use the pre-approved credit limit in order to make payments.

As long as you can open a credit card account, you’ll have access to immediate funds. Then, by using the card on CardUp, you’ll be able to enjoy a pay-as-you-go method for making and collecting payments from anywhere, at any time, with no setup or platform fee. It’s the perfect solution for managing your cash flow.

3. Reward perks

Using a credit card to carry out daily business operations also provides the opportunity to rack up rewards! This includes earning airline miles, reward points, and cashback and getting discounts on various expenses such as baggage fees, hotels, and car rentals. If you’re already paying for the business expense, why not earn rewards in the process?

Turn big expenses you’re already paying for like rent, payroll and supplier payments into rewards by using your credit card on CardUp.

4. Flexibility

Credit cards offer financial flexibility for your business. Unlike a loan, where you need to pay interest on the loan amount you borrowed, with a credit card, as long as you repay your monthly bill on time, you will be able to enjoy the perks of interest-free payments.

When you use CardUp, you can streamline all your monthly business payments onto your credit card, and it even works for expenses that don’t take credit cards!

5. Better control of finances

By using a credit card you can track expenses in real-time & receive automatic alerts of fraudulent activities. Plus, many card issuers allow you to give separate cards, with different spending limits, to your employees. This helps you streamline spending, monitor your expenses, and prevent unauthorised spending, which ultimately enables you to concentrate on other parts of the business.

In addition to helping you pay business expenses with a credit card, CardUp also allows you the ability to accept credit card payments from your customers. There are no setup fees and the transaction fee is low and pay-as-you-go.

Transform your business financing strategy with CardUp

Now that you know how a credit card can help free up cash on hand for your business, try using CardUp to optimise it even further! CardUp is a service that allows you to improve working capital by leveraging on your card’s credit limit to pay big business expenses like supplier invoices, rent, and even payroll.

CardUp’s solutions also go a step beyond optimising workflow capital by offering you easy-to-use tech features, such as bulk invoice uploading and advance payment scheduling without any setup costs or training required. Just think about how many hours you waste every month manually processing each invoice one-by-one; using CardUp can save you up to 2 days of (wo)manpower a month!

You can easily use CardUp for business payments in 3 simple steps:

  1. Create your free account (it takes less than 10 minutes)
  2. Upload your invoice and pay with your credit card. CardUp will transfer the amount directly into your recipient’s bank account.
  3. Track everything in a simple dashboard and benefit from earning card rewards 

New users can try CardUp’s services for free. Whether you need to Make a payment or Collect a payment, enjoy 0% processing fees on the first RM24,000 in transactions.* Why not try it out for yourself!

So, what are you waiting for? Sign-up with CardUp now and don’t let cash flow inefficiencies hinder your business anymore. Optimise your business and achieve unparalleled efficiency with a credit card and CardUp, today!

Only applicable if business user’s CardUp account is fully verified and approved by CardUp between December 1st and December 31st 2022, and the Business User collects at least RM12,000 on CardUp between December 1st and December 31st 2022. 0% processing fee will only apply for the first RM12,000 from January 2023 onwards.

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