A home business credit card can be easily misused by you or another member of your household. Fortunately, it is possible to prevent charges that are not related to your home business, thereby avoiding accounting, tax and cash flow problems.
Use an Accounting Program
Keeping clean, updated records of your business credit card transactions is the best way to keep track of its use and notice unusual purchases. These programs are typically inexpensive, easily installed and are tax deductible, as long as you do not also use them for your personal finances. Additionally, many times you can download the transactions with the simple click of a button.
Hide the Card
Hiding the card in a space away from your desk, that is not easily accessible, will prevent you and others from misusing the card. If the card is more difficult to obtain and you have not memorized the number, you will not be able to easily pull it out for non-business related purchases. Also, you will need to plan ahead to bring it with you when running business errands, which requires you to seriously consider whether the purchase truly is for your business and is necessary. Hiding the card from others will prevent unauthorized persons from using it.
Set a Low Limit
Having a small limit on the business credit card will prevent you from using it for non business-related purchases. A low limit, such as $1,000.00, may be all you need to run your business smoothly, and will also simultaneously prohibit it from being extensively used for non business purchases. An added benefit of a low limit is that you will always be able pay the balance in full each month or at the very least after a few months.
Set Up Warnings
More and more credit card companies have programs that will email, text or call the credit card holder not only when they suspect fraudulent use, but also anytime the card is used. These programs will require you to reassess purchases after they are made and check to ensure it has not been improperly used.
Avoid Automatic Payments
Requiring yourself to go online and individually authorize each online transaction put onto your credit card will prevent you from being overcharged for services or purchases. It is always a good idea to maintain as much control over the credit card as possible.
Require Users to Present ID
By simply writing "ask to see ID" on the back of the credit card, you will prevent unauthorized users from being able to sign for purchases. This statement requires merchants and retailers to check a government issued form of ID to make certain that the individual is the one owning the card. Of course, if the business credit card contains the name of the company and not you individually, this is inapplicable.