The main benefits of a business credit card can really be summed up as the three C’s – convenience, control and cash flow, according to ANZ’s Sen.

The convenience comes through the ease of payments, being able to keep business transactions separate from personal, easy reconciliations, and ease of tax time calculations.

A separate business card also allows a business to control how much to spend. You can provide cards to your employees, which has limits, is easy to monitor, and also enables being able to block specific types of transactions, such as gambling, for example.

The third big benefit is the help with the cash flows , which is a need for almost all businesses. Once you make a transaction, you get a statement at the end of the period, and then from your statement date, depending on the product, you could get another 25 days to make the payment. That could potentially mean up to 55 days of interest-free credit from the day of the transaction.

“It helps with the cash flows, because you have access to the cash and liquidity without any interest charged necessarily. If you are someone who pays the balance in full, then you do not pay any interest,” Sen says.

A number of business credit cards also come with a strong rewards program which allows you to earn points for regular expenditure, which can then be redeemed for a number of benefits, including frequent flyer miles, cashbacks, gift cards, etc.

The drawbacks of a business credit card mainly centre around its risk as a credit-based financial product.

Credit card interest rates are significantly higher than a secured business loan, so if you do pay interest on your transactions, a business credit card can be an expensive way to borrow money.

Business credit cards with rewards programs generally come with a high annual fee, so if the rewards are not relevant to your business or if you don’t maximise them, it may end up being a net cost for your business.

Finally, a credit card impacts your borrowing capacity because it is a liability, so if not appropriately used, it may affect your overall working capital requirements.