Technology in the gig economy makes it easier for any person to have a side gig. They may start a side business to earn extra money for their family or around one of their passionate hobbies. Either way, when they do begin a side gig, they should consider separating this business activity from their personal finances for maximum tax deduction benefits and legal protection.
One of the best ways to start to do this is to get a credit card for your business that is separate from the ones that are used for your personal expenses. It can also help you at tax time when your expenses can be easily identified and deducted from any revenue that was earned.
Business owners have many credit cards to choose from, but a cash back card can be one of the most appealing because it can provide an immediate and usable benefit. What could be easier than getting money back from your spending? Plus, this money can be reinvesting back into your business.
Here's how cash back cards can help you navigate your side gig:
1. Increased Cash Flow and Spending Power
More capital is typically required when owners start a side gig to pay for things up front before they start to earn revenue. Instead of drawing money out of your savings or borrowing it from a bank, credit cards can provide more immediate access to funds. This can be helpful you are stocking up on inventory or paying for equipment. When you use a cash back credit card, you get the added perk of gaining cash back for every purchase made—this can help your side business become profitable a bit sooner.
2. Rewards on Routine Purchases for Your Business
With some cash back credit cards, you can earn a flat percentage back on all purchases. If your side gig has regular expenses, you can use your cash back card for these purchases and reap the rewards. For example, if you use the same gas station or shop at the same stores every week, you can almost count on cash coming back to you from these purchases.
3. Cash to Reinvested
Cash back credit cards offer a straight-forward rewards experience when compared to point based rewards cards. This can be appealing for people running a small business on the side who may not immediately be able to take advantage of rewards like travel points. Cash can be more easily reinvested into your company.
Instead of drawing money out of your savings or borrowing it from a bank, using cashback credit cards can provide the access to funds that is needed now and can be paid back later from sales in your business.
Once you’re ready to apply for a card for your side business, be sure to do your research and evaluate your options. One Card that may be an option is the American Express Blue Business Cash™ Card. This Card is made with the small business owner in mind. It offers 2% cash back on all of your purchases automatically credited to your statement–with no annual fee ever. Blue Business Cash offers you flexibility and relieves pressure from your bottom line to help you grow your side gig.
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