Easier Money

How many credit cards do you need? If you're in business, you probably need two: one for personal expenses and one for business expenses.

"A lot of start-ups charge business expenses on personal credit cards," says Richard D'Ambrosio, spokesman for American Express Small Business Services in New York City. "They don't realize the advantages of a business credit card: ease in tracking expenses, division of business and personal expenses at tax time, plus [discounts and other] benefits."

"A card with your company name on it reduces the risk you'll commingle personal and business expenses," agrees Dean Klassman, owner of Klassman Financial Services in Northbrook, Illinois. "And it provides a detailed record of business expenses to show the IRS, should you get audited."

Any card will do, as long as you use it exclusively for business expenses. "Interest and annual fees are tax-deductible when the card is used for business only," Klassman says. "But you derive that benefit whether you use a personal card for business or actually have something called a `business credit card.' "

Contact Sources

American Express Small Business Services, richard.dambrosio@aexp.com

Sandy Botkin, c/o Tax Reduction Institue of Germantown Maryland, 13200 Executive Park Terrace, Germantown, MD 20874

Klassman Financial Services, (847) 714-0606, fax: (847) 509-9263

Small Business Administration, (800) 8-ASK-SBA, http://www.sba.gov