Using Credit Cards to Save Money on Business Expenses
Cash Back Rewards
- Earn Cash Back: Credit cards like the Capital One Spark Card offer 2% unlimited cash back, while the American Express Plum Card offers 1.5% unlimited cash back.
- Offset Fees: Using a credit card with cash back can partially offset the 2.95% process fee, reducing the effective cost.
- Tax-Deductible Fees: The 2.95% process fee can be filed as a tax-deductible business expense, offering some financial relief.
- Additional Tax Breaks: Depending on the jurisdiction and tax codes, you may be eligible for additional tax breaks for using credit cards for business expenses.
Cash Flow Management
- Cash Float Period: Credit cards often provide a 30 to 45-day payment window, allowing businesses to manage their cash flow better.
- Utilize Funds: During this period, the funds can be invested in short-term opportunities or other revenue-generating activities.
Detailed Example: Capital One Spark Card
- Process Fee: 2.95%
- Cash Back: 2%
- Tax Break: 0.06%
- Final Fee: 0.35%
- Additional Benefit: 30-45 days of cash flow management and float revenue.
Floating Revenue from Bank
- Float Revenue - Cash incentive Earnings: The funds in your bank account for 30 to 45 days could earn Cash incentive or be invested in short-term revenue-generating activities.
- Capital Utilization: The cash float period allows you to strategically utilize your capital for other pressing needs or investment opportunities.
By combining these strategies, the actual cost of using a credit card to handle business expenses can be significantly reduced, while also providing the flexibility to manage cash flow more effectively.
Receive by Check, Wire, or ACH After Credit Card Payment.
Previously, your vendor or payee may have refused to accept credit card payments due to the transaction costs involved, or they may have required you to add an extra fee as transaction charges. No more worries about credit card charges. You can now use credit cards to pay bills.
You can use credit cards with no transaction fees for the payee and keep your credit card reward points.
Features at Your Fingertips
From accounts payable and receivable functionalities to comprehensive online banking and beneficial integrations, Zil Money can meet the payment management requirements of all types of businesses.
Zil Money is an all-in-one payment platform to pay and get paid by credit cards, printable checks, eChecks, ACH, and Wire transfers. Get customized expense reports and increase cash flow visibility. You can track all your invoices and bills on one platform—Auto-reconcile bank statements for painless month-end and quarter-end closing. Connect multiple bank accounts as Zil Money connects with over 22000+ banks and helps to manage your accounts payable and accounts receivable seamlessly.
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