So, you’ve decided to start a business and know that you should have a business bank account separate from your personal account (Props to you 🙌🏻) But after doing a Google search (maybe that’s how you found us!), you’re more confused than ever. Below are our tips for choosing the right bank for you.
Our number one tip – and this pains me to say this – do not use a local bank or credit union. I am typically the “shop local” type, but when it comes to banks, there are just too many issues for me to recommend going that route. The connections to accounting software never seem to work properly (if they even have them – many regional banks don’t offer connections to Xero or Quickbooks) and even adding a read only accountant user (when that time comes) can be hard to do. There tend to be more issues downloading statements as well.
So what banks do we recommend? I am partial to Relay. They are an online bank built for online businesses, so they know our industry. They are secure and insured so you can rest assured knowing your money is safe. If you want a bank with in person branches, we like Wells Fargo. These two banks tend to have the least number of connection issues to Xero.
When it comes to credit cards, hands down it’s Chase. When looking for a credit card for our business, we did a LOT of research. Like, I don’t want to admit the hours that were spent reading articles and comparing. After all that, it came down to Chase. Their rewards are the best, their platform is easy to use, their connection with accounting software is reliable, and there are special options you can choose to receive even more cash back if you spend a lot on certain categories. Use our link to get a bonus when you apply and are approved*.
Tips for Leveraging Credit
Before opening a credit card for your business, it’s important to consider if it’s the best option for your business. It takes responsibility to manage credit and it can be easy to feel like you have all kinds of money to spend once you have that plastic in hand. If you feel like you’re ready for that responsibility, then you’ve applied and gotten approved, follow our tips below to get the most out of your credit card:
- As always, avoid comingling your business and personal expenses. Just because you have available credit on that new business card, don’t plan on using it to fund your upcoming vacation, even if you’ll pay it off with your personal account. Keeping personal expenses out of your business, and vice versa is important and should be your standard practice. Not only does it keep the door closed between the two in the eyes of the IRS, it shows them, and the bank, that you’re serious about your business.
- Only charge to your card what you can pay off and pay the balance in full each month. There’s no point in opening a credit card to earn rewards if you’re paying interest on your balance each month.
- Set your monthly subscriptions to be charged to the card. You’re already paying them and it’s an easy way to earn rewards each month.
- If you have a large purchase you want to make and want to take advantage of the introductory 0% interest rate, make sure you’re tracking when that ends. That way you can make the final payment before that happens and don’t end up getting charged interest.
- As with any account for your business, stay on top of monitoring your account. This is most easily done by staying on top of your bookkeeping (or hiring a bookkeeper!), but if you’re not going to do that, at least review your account weekly or monthly to make sure there are no erroneous transactions.
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The content in this blog post is provided for general informational purposes only and should not be considered professional tax or legal advice. The author is not a Certified Public Accountant, and no assurances can be made regarding the outcomes or consequences of tax returns, IRS actions, or any financial decisions based on this information. Readers are strongly advised to consult with a qualified tax professional or legal advisor for personalized guidance specific to their individual circumstances. The author expressly disclaims any liability for decisions made based on the information presented in this blog post.