Business Credit Cards

How to Choose a Small Business Credit Card

For small business owners, credit is vital. But with so many credit cards available designed for businesses, how can you decide which one is right for you and your company? These two factors can help narrow down your selection:

• If you plan to pay your balance in full each billing cycle, look to maximize rewards with a business credit card with rewards, such as airline miles or cash back.

• If you think you'll carry a balance, look for a card with a low APR. Avoid charge cards, because they usually require that your balance be paid in full each billing cycle.

Hot Deals for October 2020

A new credit card with an introductory offer can be a great way to get a head start on reaching your business goals.

Deals and Promotions

• Cash Back: If you want to reinvest in your business, consider the Blue Business Cash from American Express (a CreditDonkey partner). Blue Business Cash offers 2% cash back on all eligible purchases on up to $50,000 per calendar year, then 1%. There is a 0% intro APR on purchases for 12 months. Then a variable rate, currently 13.24% - 19.24%. There is no annual fee. Terms apply.

• Promotional APR with No Annual Fee : Blue Business Plus earns 2X Membership Reward® points on the first $50,000 spent on eligible purchases each calendar year, 1 point per dollar thereafter. There is a 0% intro APR on purchases for 12 months, then a variable rate, currently 13.24% - 19.24%. There is no annual fee. Terms apply.

• 
  Rewards: If you spend more than $1,667 per month for your business, this promotion is for you. Ink Business Preferred lets you earn 100,000 bonus points after you spend $15,000 on purchases in the first 3 months from account opening. 100,000 points is worth $1,250 toward travel when you redeem via Chase Ultimate Rewards. Earn 3 points per $1 on the first $150,000 spent in combined purchases on travel, shipping purchases, Internet, cable and phone services, advertising purchases made with social media sites and search engines each account anniversary year. Earn 1 point per $1 on all other purchases - with no limit to the amount you can earn. There are no foreign transaction fees. There is a $95 annual fee.

• 2% Cash Back on Every Purchase: Capital One® Spark® Cash for Business offers $500 cash bonus after you spend $4,500 on purchases within the first 3 months. This card earns 2% cash back on every purchase. There is a $95 annual fee ($0 intro annual fee for the first year).
  Does it make sense to choose cash back over reward points? If your business has travel needs, you may find Chase Ultimate Rewards and AMEX Membership Rewards points more valuable. They can be transferred to airline and hotel partners, which often have potential for a higher redemption value.
  

• Low Interest with No Annual Fee: U.S. Bank Business Platinum offers 0% Intro APR* on purchases and balance transfers for the first 20 billing cycles. After that, a variable APR, currently 9.99% - 17.99%. There is no annual fee.

• Membership Rewards: Business Gold Card earns 35,000 Membership Rewards® points after you spend $5,000 on eligible purchases within the first 3 months. This card earns 4X Membership Rewards® points on the 2 select categories where your business spent the most each month. 1X is earned for other purchases. The 4X points apply to the first $150,000 in combined purchases from these 2 categories each calendar year. There is a $295 annual fee. Terms apply.

• Travel Benefits: If you spend more than $6,667 per month for your business, this promotion is worth considering. American Express Business Platinum offers 75,000 Membership Rewards® points after you spend $15,000 on qualifying purchases within your first 3 months of Card Membership. You get 5X Membership Rewards® points on flights and prepaid hotels on amextravel.com. Earn an extra half point per dollar on each eligible purchase of $5,000 or more (up to 1 million additional points per year). Earn 1 point per dollar for qualifying purchases under $5,000. You can use Membership Rewards® Pay with Points for all or part of a flight with your selected qualifying airline, and you can get 35% of the points back (up to 500,000 bonus points per calendar year) when you book on amextravel.com. There is a $595 annual fee.

  This card has premium benefits for travelers: The card includes access to the Global Lounge Collection, which gives you complimentary access to over 1,000 airport lounges worldwide. That includes Delta Sky Club, The Centurion lounge network, The International American Express lounges, Priority Pass Select lounges (enrollment required), and Airspace Lounge. In addition, you can enroll your card with Gogo to get 10 Gogo inflight internet passes annually. Terms Apply.

• Travel / Hotel Stays: Marriott Bonvoy Business Credit Card offers 100,000 Marriott Bonvoy points after you spend $5,000 in purchases within the first 3 months. Earn up to $150 in statement credits within your first 6 months of Card Membership for all eligible purchases on your Card on U.S. Advertising in select Media. Plus receive complimentary Marriott Bonvoy Platinum Elite status for one year (February 1, 2021-January 31, 2022). This limited time offer ends 1/13/21.

  Earn 6x points at participating Marriott Bonvoy hotels. Earn 4x points at U.S. restaurants, at U.S. gas stations, on wireless telephone services purchased directly from U.S. service providers and on U.S. purchases for shipping. Earn 2x points on all other eligible purchases. You receive 1 Free Night Award every year after your Card account anniversary. Plus, you can earn an additional Free Night Award after you spend $60K in purchases on your Card in a calendar year. Free Night Award can be used for one night (redemption level at or under 35,000 points) at a participating hotel. Certain hotels have resort fees. There is a $125 annual fee. Terms apply.

What Kind Of Rewards Are Right for Your Business?

Pretty much all business owners are in favor of earning rewards while reducing costs. The banks know this - that's why they keep flooding your mailbox with enticing reward promotions. They all give different reasons to apply. So how do you pick the right rewards program for your business?

What it comes down to is how your business spends money. Office supplies, cell phone charges, gas station receipts, wining and dining of clients, airfare, hotel stays, and advertising expenses add up. And they add up quickly.

Based on your business, consider what type of expenses you are most likely to put on your card.

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• Travel: If a big chunk of your budget goes toward sending your employees to other places, paying for employees to stay near your office, or footing the bill for car rentals, then a travel-related business credit card is the way to go. While these cards tend to have higher annual fees, they can be deeply rewarding as you accumulate rewards that can be used to shave off the totals of hotel stays or airfare.
  Which airline do you plan to use? Some credit cards, like the Ink Business Preferred and American Express Membership Rewards business cards, allow you to transfer credit card points to their participating airline's frequent flyer programs.

  • American Airlines: Marriott Bonvoy
    
  • Delta Air Lines: Marriott Bonvoy, American Express Membership Rewards
    
  • Southwest Airlines: Marriott Bonvoy, Chase Ultimate Rewards
    
  • United Airlines: Marriott Bonvoy, Chase Ultimate Rewards
    
  • JetBlue: Marriott Bonvoy, American Express Membership Rewards
    
  • Alaska Airlines: Marriott Bonvoy
    
  • Hawaiian Airlines: Marriott Bonvoy, American Express Membership Rewards
  • American Express Membership Rewards (AMEX MR) points can be transferred to over a dozen frequent traveler programs, including airlines like Delta and hotel chains like Hilton.

  • Chase Ultimate Rewards (Chase UR) points can be transferred to frequent travelers programs too. Chase Ultimate Rewards airline transfer partners include United and Southwest. Their hotel transfer partners include Hyatt, Marriott, and the Ritz-Carlton.

• Cash is king: Who doesn't like cash? If you want rewards in a simpler format, narrow your search to business cash back credit cards.

What to Consider When Choosing a Card for Your Business

Small business owners often rely on credit for day-to-day operations. And a reliable credit card can be vital to keep a company up and running. Many owners tend to lean on their personal credit card to cover those costs. However, it's a smart move to use a card specific for your small business' needs instead. This helps keep your personal and business expenses separate, which can be a lifesaver for accounting purposes and maintaining your personal credit score.

Here are three factors that will help you zero in on the credit card for your unique needs.

1. Cost
   As with any aspect of a small business, cost is important. Interest rates and annual fees are the two main costs associated with business credit cards:
   • Interest Rate: Keep in mind that many cards come with low-interest introductory rates. But don't forget to read the full offer details so you know what the rate will be after the introductory period ends.

   • Annual Fee: The annual fee can vary greatly depending on the perks that come with the card. Generally speaking, business rewards credit cards have slightly higher interest rates and annual fees to help the card issuer offset the expenses of the rewards and benefits. For that reason, make sure to weigh the benefits of the card with the associated rewards.

2. Rewards
   If you plan to pay your balance in full each billing cycle, a rewards credit card may be a smart option. Your ability to pay on time is a critical factor, since rewards credit cards often feature a slightly higher interest rate than traditional credit cards. There are a variety of rewards options now available, so consider what would most benefit your small business:
   • Cash Back: Earn cash back on a percentage of your spending.

   • Travel: Earn points or miles for airlines, car rentals, and hotels. This is a great option for small businesses with employees who travel often.

   • Reward Points: Many of the cards allow you to earn points that can be redeemed for a variety of merchandise. Evaluate the merchandise offering in terms of value for your company's needs.

   While comparing your options, always remember to read the fine print. Take a look at spending caps and other limits that come with a rewards program. This will help ensure that you're choosing a card with perks you can fully utilize.

3. Credit versus Charge Card

   Like personal credit cards, business credit cards allow you to carry a balance into the next billing period (with interest). This allowance gives small businesses the ability to pay off an expense over time.

   Alternatively, business charge cards require the balance to be paid in full each billing cycle. This typically isn't a realistic route for cash-strapped start-ups and is better suited for more-established businesses.

If you pay attention to the factors above while checking out the current promotional offers, you should be able to find a card you can put to work for your business. (Terms apply.)

Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. This site may be compensated through the Advertiser's affiliate programs.

Disclaimer: The information for the American Express Blue Business Cash™ Card, American Express® Business Gold Card, The Business Platinum Card® from American Express, The Blue Business® Plus Credit Card from American Express, U.S. Bank Business Platinum, Marriott Bonvoy Business™ American Express® Card, and Capital One® Spark® Cash for Business has been collected independently by CreditDonkey. The card details on this page have not been reviewed or provided by the card issuer.

What are the Benefits of Credit Cards for Small Business?

With increasing demand from businesses, credit cards have become the "it" product for small business financing. The use of credit cards topped the list of financing sources for small businesses, according to a 2008 survey by the National Small Business Association. Check out some benefits of credit cards for small business below.

• Accessing a Cash Source: Cards provide an immediate, convenient source of cash. They can be used to pay vendors, order supplies and cover travel expenses.

• Developing Business Credibility: Help establish a successful record and credit history until more capital is readily available.

  After you've taken the leap to open a small business, you need to maintain your business credibility by being financially responsible. Credit cards can help you do that by allowing you to pay periodic expenses on time without tarnishing your relationships with vendors.

• Earning Rewards for Your Bottom Line: The perks of most cards can impact your business in a positive way. Today’s credit cards allow you to gain rewards (including cash back, airline miles, and discounts), which can help your business grow.

• Building a Solid Credit History: Help establish a respectable credit history. One option for businesses is a card with a high spending limit that will allow you to carry a balance. With a balance, payments are more manageable when cash flow is not certain.

• Record Keeping: Allows for better tracking of purchases. Credit card statements also allow you to monitor your records, employee spending, and any changes to the terms of your agreement.

• Managing Tax Matters: Credit card statements help you sort your expenses come tax time, and they may also come in handy when a tax bill needs to be paid and your cash flow is dry. While it’s not advisable that you do so often, the Internal Revenue Service has begun accepting credit cards for tax payments.

• Enjoying Increased Security: Many credit card companies protect the user against poor merchandise and undelivered service, giving the small business owner peace of mind about inventory purchases and new vendors.