Are you starting a small business or trying to grow an established one? Choosing the right credit card can make a big difference. Business credit cards aren’t just about borrowing money; they offer valuable benefits like rewards, cashback, and financial perks that can help your business thrive. Let’s dive into what makes a great business credit card and explore some of the best options available.
Why Do Business Credit Cards Matter?
Business credit cards are designed to help companies manage their expenses, build credit, and enjoy benefits that fit their specific needs. For example, if your business often buys office supplies, travels, or requires frequent online purchases, certain business credit cards can offer discounts or rewards that lower your overall costs.
Using a business credit card responsibly helps build a credit profile for your company. A strong business credit score can make it easier to qualify for larger loans, better interest rates, and financing options, which are key to business growth.
How to Choose the Best Business Credit Card
Not all business credit cards are the same, so picking one requires looking at a few important factors. Here’s what to consider when choosing a card for your business:
1. Rewards and Cashback Offers
Some business credit cards offer rewards points or cashback for each dollar you spend. If your business has regular expenses like gas, travel, or office supplies, a card with good rewards in these areas can help you save. Many cards offer categories such as:
- Travel Rewards: Earn points on flights, hotels, and car rentals.
- Cashback on Essentials: Cards that offer cashback on office supplies, gas, or dining.
- General Rewards: Cards that give points or cashback on all purchases, so every dollar spent works for you.
2. Introductory Offers and Bonuses
Some business credit cards provide attractive introductory bonuses. For example, a card may offer a large point bonus if you spend a certain amount within the first few months. These welcome offers can provide an immediate boost, but be sure to check the spending requirements to ensure they align with your business budget.
3. Interest Rates and Fees
Interest rates, also called APRs (Annual Percentage Rates), are crucial when choosing a credit card. Some business credit cards come with introductory 0% APRs, which can be helpful for big purchases or managing cash flow. Once the introductory period ends, though, the rate might go up, so understanding the long-term APR is important.
Also, consider fees like:
- Annual Fee: Some cards charge a yearly fee, so you need to determine if the benefits outweigh the cost.
- Foreign Transaction Fees: Important if your business operates internationally.
- Late Payment Fees: Know what penalties apply if you miss a payment.
4. Credit Limits and Flexibility
Business credit cards often have higher credit limits than personal cards, which can help when dealing with large expenses. Some cards also offer flexible credit limits that adjust based on your payment history, business revenue, and spending patterns. Flexible limits can support business growth by accommodating bigger expenses as your company expands.
5. Additional Card Benefits
Many business credit cards come with extra perks, such as:
- Travel Insurance and Protections: Coverage for lost luggage, rental cars, or emergency medical expenses.
- Purchase Protection: Coverage if an item is damaged or stolen shortly after buying.
- Expense Tracking and Management Tools: Great for managing employee expenses or tracking spending by category.
Top Business Credit Cards to Consider
With so many choices available, we’ve gathered some of the most popular and well-reviewed business credit cards that could be a great fit for different needs.
Best for Cash Back: Chase Ink Business Cash Credit Card
The Chase Ink Business Cash Credit Card is ideal for businesses that want solid cashback without an annual fee. Here are some reasons why:
- 5% Cashback on office supplies, internet, and cable purchases (up to a spending limit).
- 2% Cashback on dining and gas stations.
- 1% Cashback on all other purchases.
- Introductory Bonus: If you spend a certain amount in the first three months, you can earn a significant point bonus.
This card is especially beneficial for small businesses with frequent office supply and utility expenses.
Best for Travel Rewards: American Express Business Platinum Card
If your business requires frequent travel, the American Express Business Platinum Card offers premium rewards and travel perks. Some of its highlights include:
- Travel Points: Earn up to 5X points on flights and hotels.
- Travel Credits: Annual credits for airfare and other travel-related expenses.
- Airport Lounge Access: Free access to Centurion Lounges, Priority Pass lounges, and more.
- Expense Management: Tools for tracking and managing business expenses.
Though it has a high annual fee, the perks are significant for businesses with heavy travel requirements.
Best for No Annual Fee: Capital One Spark Cash Select
Capital One’s Spark Cash Select card provides simple, straightforward cashback without an annual fee. Key features include:
- Unlimited 1.5% Cashback on every purchase.
- Introductory APR: A 0% APR on purchases for the first nine months.
- No Annual Fee: This makes it a low-cost option for businesses just starting.
The Capital One Spark Cash Select is perfect for businesses that don’t need specialized rewards but still want solid cashback on their purchases.
Best for Building Business Credit: Wells Fargo Business Secured Credit Card
For newer businesses or those looking to establish credit, the Wells Fargo Business Secured Credit Card is a practical choice. This card requires a deposit but provides opportunities to build credit through responsible use. Features include:
- Customizable Credit Limit: Limits are based on your deposit, ranging from $500 to $25,000.
- Rewards: Earn cashback or points on all purchases.
- Business Credit Reporting: Wells Fargo reports to business credit bureaus, helping you build a credit history for your company.
This card is a great starting point for businesses looking to grow their credit profile and eventually move to an unsecured business card.
Best for High Spending Businesses
For businesses with larger spending needs, the Chase Ink Business Preferred Credit Card offers high rewards potential and valuable points that can be used for travel or cashback. Key benefits include:
- 3X Points on travel, shipping, and select advertising purchases.
- Large Welcome Bonus: Earn bonus points after meeting a spending threshold in the first few months.
- Flexible Redemption Options: Points can be redeemed for travel, cashback, or transferred to frequent flyer programs.
The Chase Ink Business Preferred card’s strong points-earning rate and flexible redemption options make it an excellent choice for businesses that spend heavily in key categories.
Pros and Cons
Business credit cards can offer plenty of advantages, but they’re not without potential downsides. Here’s a quick look at the pros and cons:
Pros
- Rewards and Cashback: Earn points or cashback that can offset expenses.
- Improved Cash Flow: Delayed payments can help you manage cash flow and make timely purchases.
- Expense Tracking: Business credit cards often include tools to manage and track expenses.
- Business Credit Building: Builds a separate credit profile for your business.
Cons
- Interest Rates: High-interest rates can lead to debt if balances aren’t paid in full.
- Annual Fees: Some cards have annual fees that can add up.
- Risk of Overspending: Easy access to credit can tempt businesses to spend more than they should.
Tips for Managing
Using a business credit card responsibly is essential to avoid debt and take full advantage of its benefits. Here are some tips to help you manage your card effectively:
- Pay Off Your Balance: Avoid high interest by paying off the balance in full each month.
- Track Spending Carefully: Use the card’s expense management tools to keep an eye on purchases.
- Use Rewards Wisely: Focus on earning rewards in categories where your business spends the most.
- Set Spending Limits for Employees: If employees have cards, set limits to control expenses.
- Review Statements Regularly: Keep an eye on statements for any unauthorized purchases or fees.
Conclusion
Selecting the best business credit card depends on your business’s unique needs and spending habits. From cashback rewards to travel perks and credit-building features, the options are varied. By carefully considering factors like rewards, interest rates, fees, and spending categories, you can pick a card that supports your business’s growth and financial goals. Whether you’re looking to save on everyday expenses, earn rewards on travel, or build your business credit, the right business credit card can be a valuable asset for your company’s success.