Small business credit cards are an asset for just about anyone these days and your favorite loyalty program is there to serve the plastic.

With 90 percent or more of small business spending not on credit cards, a funny thing happened on the way to the bank deposit — banks are meeting you there handing out an ever increasing array of benefits and best of all rewards in the form of miles, points, cashback and other business-related rewards. Banks using rewards, that is, frequent flyer miles, come calling on some of the highest spenders around. But it’s not all miles — hotel programs are passing out the business plastic as well.

According to market research firm TowerGroup, small business credit card spending has shot up 81%, to around $254 billion, in the last four years. Of that amount, $168 billion was rung up on small business credit cards, versus just $70 billion back in 2002.

Those trends aren’t expected to slow anytime soon, and there is plenty of room for growth. Only 35% of the estimated 25 million small businesses in the United States now use business credit cards.

What’s behind this sudden interest in small business credit cards? Well, for one it’s a more profitable segment of the credit card base. While most frequent flyers can average $18-32,000 of credit card spending a year, the small business owner can average nearly $88,000 a year in spending. That’s a lot of extra margin for the credit card business and that’s a lot of reward enticement for the small business owner. In addition, big business growth is relatively flat with small business growth up about six percent.

We have to look no further than three-year-old Zevez.com to see what lurks in the mind of the small business owner. This startup perfected the way in which it manages to convert the use of paying by check into using plastic to pay accounts payables which turned into rewards for the small business owner. Its remarkable software hooks into standard small business accounting packages allowing the accounting department to pay bills with the pre-selected credit cards and collecting the miles. While initially most chose personal cards for these purposes, the trend is changing and small business cards are seeing tremendous favor these days.

Credit card companies have known all along that the storm was coming. From A to V (that’s American Express to Visa), banks have rolled out their best offers to woo this long forgotten segment of the credit card industry.

So let’s take a look at what makes sense for you to consider when choosing a small business credit card over just using your personal credit card.

Rewards
You come to expect us to focus on the miles and we don’t want to disappoint you. Does your small business require you to travel a lot? Do you frequently fly from one place to another to meet with your clientele? Then you can benefit from the frequent flyer miles that the following small business credit cards offer.

Always remember, your accumulated frequent flyer miles can help you reduce your business travel expenses or add another level of value into being a small business owner. Cashing in the miles for first class travel is certainly a sign that you have arrived. But we all have different ideas of what these awards look like. Some of these cards include elite-level membership as a benefit. For instance, the Mileage Plus Business Awards Visa advertises Premier and Premier Executive membership as a benefit.

Expense Management
As a small business owner, you want to make sure your business runs as smoothly as possible. Nevertheless, as Murphy’s Law would have it, things can go wrong at any given moment and you could incur unexpected business-related expenses. Even worse is when you do not have the finances available to handle sudden expenses.

Picture it, your consulting business is well established and you’ve done well in earning a reputation for getting the job done in a timely and professional fashion. Suddenly, your computer system fails completely and you have several projects due within the next 48 hours. To make matters even more complicated, you can’t completely afford the cost related to replacing your system. What would you do?

Let’s face it, life is full of surprises. Yet, with a small business credit card, hassles like the one described above are far easier to rectify. A small business credit card can keep your business running smoothly, even when things go horribly wrong. Consequently, small business credit cards can help you protect your reputation!

Detailed Statements
If you have ever spent hours poring over your credit card statements trying to define which purchases were personal vs. business related, you’ll be glad to know that small business credit cards can help you track your business-related expenses. As a small business owner, you will have to keep track of every purchase you make and every bill you pay. Furthermore, when managing your small business, you will also need to have an orderly form of record keeping. Without some form of organization, when it comes time to file your taxes, you will encounter quite a few difficulties. What’s more, without an adequate way to keep track of your expenses, you could even lose out on tax deductions that could save you a lot of cash.

Paying your business taxes doesn’t have to be a source of aggravation. If you own a small business credit card, you can use your credit card statement to keep track of monthly expenditures. Your monthly credit card statement will provide you with a detailed account of your business-related purchases. Therefore, with a business credit card, you can make tax time a whole lot easier to endure.

Supplemental Cardholders
One of the great things about small business credit cards is that it is fairly easy to add employee cards to your business account. This can be very useful in minimizing the cost of expenses within your business.

Giving your employees access to your small business account can significantly reduce the amount of time spent looking for where the money has been spent. All small business cards allow you to manage and track their spending activity and the benefits of this service will increase as your small business expands. This does not diminish the control you have over your cash because you can allocate spending limits to cardholder’s individually, and track their expenditure in detail.

Charge Cards
Charge cards are an appealing option as you can often get up to two months of interest free credit card purchases if you keep up to date with payments. A charge card also doesn’t have a pre-set limit on spending, allowing your small business the flexibility it might need. The leading charge cards for small business are offered by American Express and Diners Club.

When trying to get a small business off the ground, it’s not essential to have a credit card. But it sure helps.

Packing some plastic can help alleviate cash flow crunches. And while it’s not the best source of capital, a credit card can obviously come in handy when a purchase is necessary and cash is tight.

But there are drawbacks to small-business credit card usage as well. And knowing them beforehand could save you a lot of heartache. Perhaps the biggest: Your personal and professional finances are blended, at least for the first few years. A business credit card carries the same personal liability as a personal card. So if the business defaults on credit card payments, a creditor can come after the person who signed the card for payment. Most lenders require borrowers to agree to this provision on the card application.

Moreover, your small business credit card will be noted on your personal credit reports. A few late payments could seriously damage your personal credit score, while a big debt run-up by the business could make you look more overextended than you really are.

The good news is, the personal liability agreement isn’t always set in stone. After a few years of regular payments, a lender might be willing to remove the personal liability component. And no matter what, once your business has established its own credit history, you should be able to remove your small business credit card from your personal credit reports.

One other word of caution: Because business credit cards are meant to be used by companies, not consumers, they come with fewer consumer protections than a personal credit card. For example, with consumer cards you can dispute billing errors on the account within certain time limits, and during that time the credit card company cannot list that disputed amount as delinquent, or cancel the card. Not so with business credit cards.

The same goes for asserting “claims and defenses” when you order merchandise and receive it in poor condition. With a personal credit card, you can dispute the charges, and if the vendor won’t cooperate, the credit card company will step in on your behalf. With a business card, the credit card company won’t get involved with the dispute.

So is it even worth it to carry a small business card rather than a personal card? You bet. Once your business has established a solid track record of its own, you can take steps to separate that account from your personal finances — which is obviously a good thing. But you need to wield the card wisely. Here are a few tips on how to get a small-business credit card — and how not to get burned when using one.

Getting a Business Credit Card
A good place to start is with the bank who currently issues your personal frequent flyer credit card. Assuming you have a good track record with them, you’re likely to be approved for a small business credit card with no problem at all.

If you don’t have a flawless record, you might have to jump through some hoops to get a credit line. The bank might ask you to deposit $5,000 in an account or a CD, for example, and will give you a credit card with a $5,000 limit. Once you’ve proven yourself to be a responsible borrower, the deposit will be given back to you, with interest, and your credit limit will probably be increased. Since the major issuers of frequent flyer credit cards are Chase and Citibank, this bodes well for you since they operate as banks. American Express may be a little more difficult.

Which is the Best Small Business Credit Card Earning Miles?
Tough question and even tougher answer. Since most of these cards all award equal miles, the difference will likely be in the card benefits. The OPEN NETWORK from American Express offers not only rewards, but also discounts on airlines, hotels and even FedEx charges. Needless to say, finding the card that’s best for your business could turn out to be a full-time job in itself if you don’t narrow down your options. Here are some questions to ask before you choose:

1. How quickly do you plan to pay off your balance? Some businesses want the discipline of charge cards. Others want the flexibility of paying off a balance over time and some prefer using a Small Business Check Card (ATM Card). If you anticipate making large purchases, keep in mind that charge cards typically don’t have spending limits — but you’ll have to pay off the balance in full within 30 days. Credit is the name of the game, that or you better have a very large bank balance.

2. What kind of rewards do you want? It used to be just frequent flyer miles. Now, hotel programs have gotten into the business. Marriott Rewards, Priority Club Rewards and Starwood Preferred Guest all issue small business credit cards in addition to their regular credit cards.

If you’re going to need more cards for your employees, check to see if the card provider offers additional cards for no fee.

3. Because you will be personally liable for your debts, be sure you and your employees use your credit cards wisely. To be on the safe side, lower the credit limits for your employees.

Negotiating the removal of that personal liability clause from your agreement won’t be easy but it isn’t impossible.

Credit cards may provide a quick route to ready capital, but for undisciplined entrepreneurs, they can also lead to a world of debt.

While delinquency rates on all credit cards have dropped, average overall credit card debt has gone up — to $9,159 per household in 2005, from $8,542 in 2002, according to CardWeb.com, a credit research company. Meanwhile, average late fees per credit card statement have hovered around $27.50, says watchdog Consumer Action.

Typically, problems arise when small business owners start using credit cards for startup capital or ongoing business expenses like payroll or rent, rather than for short-term needs like equipment or supplies.

How to know when you’re getting in too deep? Rising monthly balances are an obvious tip-off. Another bad sign is if you find yourself using cash advances to pay ongoing expenses such as payroll. With cash advances, you’ll pay an up-front 2% to 4% fee on the amount advanced (compared to, say, a flat $1.50 charge at an ATM) and a stiffer interest rate — typically 20% to 25% — than on regular card purchases. Plus, interest on cash advances begins accruing immediately. Several programs like Continental’s business card offer a business check card (ATM) which can help you manage your money better but still earn rewards.

Most of these cards don’t charge annual fees, but some do have reward earning caps. So if miles and points are your reward, make sure that as you change from checks to plastic to pay your business expenses, you don’t end up with limiting your earning power.

Your Options
Among those programs offering a small business card with reward benefits are: Marriott Rewards, Starwood Preferred Guest, IHG Priority Club Rewards, Southwest Rapid Rewards, Air Canada Aeroplan, American AAdvantage, United Mileage Plus, Continental OnePass, Northwest WorldPerks, JetBlue trueBlue, US Airways Dividend Miles, Aloha Airlines AlohaPass, Delta SkyMiles, American Express Business Gold Rewards Card (Membership Rewards), American Express Business Green Rewards Card (Membership Rewards), Diners Club Corporate Card (Club Rewards), Diners Club Carte Blanche Corporate Card (Club Rewards). Here’s a list of the most popular small business cards on the market today, along with a list of their benefits. Some of the benefits we find most impressive are the OPEN NETWORK from the American Express cards. Not only are you getting discounts at FedEx, FedExKinko’s, but also with travel companies like Delta, JetBlue, Hyatt, Courtyard by Marriott and Hertz. Heck, we think their roadside assistance which provides free emergency towing, flat tire repair, battery boost, fuel delivery or emergency lock out service (similar to AAA) is a valuable benefit. This alone is enough reason to use a small business credit card rather than a personal card when racking up the rewards.

American AAdvantage
CitiBusiness AAdvantage MasterCard