What are the best business credit cards to get? It’s a question that many entrepreneurs and business owners ask themselves, as navigating the world of credit cards can be a complex process. Business credit cards offer a range of benefits, from earning rewards and building business credit to streamlining expenses and gaining access to exclusive perks. But with so many options available, it can be challenging to determine which card is right for your specific needs.
Choosing the right business credit card is crucial for maximizing your business’s financial potential. By understanding the various types of cards, factors to consider, and top providers, you can make an informed decision that aligns with your goals and spending habits.
Understanding Business Credit Cards
Business credit cards are financial tools designed to help business owners manage expenses, build credit, and access rewards and benefits. They function similarly to personal credit cards but are specifically tailored for business use, offering unique features and advantages.
Key Differences Between Personal and Business Credit Cards
Personal and business credit cards differ in several key aspects:
- Credit Reporting: Business credit card activity is reported to business credit bureaus, such as Dun & Bradstreet and Experian, while personal credit card activity is reported to personal credit bureaus, such as Equifax, Experian, and TransUnion.
- Eligibility Requirements: Business credit cards often have stricter eligibility requirements than personal credit cards, requiring a strong business credit history, revenue, and financial stability.
- Spending Limits: Business credit cards typically have higher spending limits than personal credit cards, allowing businesses to manage larger expenses.
- Rewards and Benefits: Business credit cards often offer unique rewards and benefits tailored to business needs, such as travel points, cash back on business expenses, and extended warranties.
- Statement Reporting: Business credit card statements typically provide detailed expense reports, making it easier for businesses to track spending and manage finances.
Types of Business Credit Cards
Business credit cards come in various types, each offering distinct benefits and features:
- Cash Back Cards: These cards offer cash back rewards on purchases, allowing businesses to earn money back on everyday expenses. Examples include the Chase Ink Business Cash Credit Card and the Capital One Spark Cash for Business.
- Rewards Cards: These cards offer points or miles that can be redeemed for travel, merchandise, or other rewards. Examples include the Chase Ink Business Preferred Credit Card and the American Express Business Platinum Card.
- Travel Cards: These cards offer travel-related benefits, such as airport lounge access, travel insurance, and bonus miles on flights and hotels. Examples include the Capital One Venture X Rewards Credit Card and the United MileagePlus® Business Card.
- Business Expense Management Cards: These cards are designed to simplify expense tracking and reporting, offering features like expense categorization, online receipt management, and integrated accounting software. Examples include the Expensify Card and the Divvy Card.
Factors to Consider When Choosing a Business Credit Card
Choosing the right business credit card is crucial for your business’s financial health. It can help you manage expenses, build credit, and earn rewards. However, with so many options available, it’s essential to carefully consider various factors before making a decision.
Credit Limit
A credit limit is the maximum amount you can charge on your card. A higher credit limit offers more flexibility, but it also increases your debt potential. When choosing a credit limit, consider your business’s typical monthly expenses and future financial needs. Aim for a limit that comfortably accommodates your business’s regular spending while providing room for unexpected expenses or large purchases.
Annual Fees
Many business credit cards come with annual fees. These fees can range from a few dollars to hundreds of dollars per year. Before applying for a card, consider the annual fee and weigh it against the card’s benefits. Some cards offer substantial rewards or perks that can outweigh the annual fee, while others may not justify the cost. If you’re on a tight budget, opt for a card with a low or no annual fee.
Interest Rates
Interest rates are the cost of borrowing money. When you carry a balance on your business credit card, you’ll be charged interest. A lower interest rate will save you money on interest charges. While it’s best to pay your balance in full each month to avoid interest charges, it’s crucial to compare interest rates and choose a card with a competitive rate if you anticipate carrying a balance.
Rewards Programs
Business credit cards offer various rewards programs, including cash back, travel points, or merchandise. These programs can provide valuable incentives for using your card. Choose a rewards program that aligns with your business’s spending habits. For example, if your business travels frequently, a travel rewards program might be beneficial.
Perks
Some business credit cards offer additional perks, such as travel insurance, purchase protection, or extended warranties. These perks can provide valuable protection and benefits for your business. Evaluate the perks offered by each card and choose one that aligns with your business’s needs and priorities.
Credit Score
Your business credit score is a numerical representation of your business’s creditworthiness. A higher credit score indicates a lower risk to lenders, making you eligible for more favorable credit card terms, such as lower interest rates and higher credit limits. Maintaining a good credit score is crucial for securing favorable credit card offers.
Spending Habits
Consider your business’s typical spending patterns and choose a card that aligns with your needs. If you frequently make large purchases, a card with a high credit limit and generous rewards program might be suitable. If you make smaller, more frequent purchases, a card with a lower credit limit and a rewards program that rewards everyday spending might be more appropriate.
Business Needs
Your business’s specific needs will influence your choice of a business credit card. For example, if you’re a small business owner, you might prioritize a card with a low annual fee and a rewards program that rewards everyday spending. If you’re a larger business with significant travel expenses, a card with a travel rewards program and purchase protection might be more beneficial.
Top Business Credit Card Providers: What Are The Best Business Credit Cards To Get
Choosing the right business credit card can be a significant decision for any business owner. With a wide array of options available, it’s essential to compare different providers and their offerings to find the best fit for your specific needs. Here, we’ll delve into some of the top business credit card providers, examining their key features and benefits.
Top Business Credit Card Providers
The following table provides a comprehensive overview of some of the top business credit card providers, including major banks, credit unions, and specialized business card issuers:
| Provider Name | Card Name | Annual Fee | Interest Rate | Rewards Program | Key Features |
|---|---|---|---|---|---|
| American Express | American Express Business Platinum Card | $595 | 16.99% – 22.99% | Membership Rewards points | Travel perks, statement credits, access to airport lounges |
| Chase | Ink Business Preferred Credit Card | $95 | 16.99% – 22.99% | Ultimate Rewards points | Bonus points on spending in specific categories, travel and dining rewards |
| Capital One | Spark Miles for Business | $95 | 16.99% – 22.99% | Miles | Unlimited miles on all purchases, travel rewards |
| Bank of America | Business Advantage Unlimited Rewards Credit Card | $0 | 16.99% – 22.99% | Points | Unlimited 1.25% cash back on all purchases, travel rewards |
| U.S. Bank | U.S. Bank Business Cash Rewards Card | $0 | 16.99% – 22.99% | Cash back | 2% cash back on purchases in select categories, 1% cash back on all other purchases |
It’s crucial to note that interest rates and rewards programs can vary based on creditworthiness and other factors.
It’s always a good practice to review the terms and conditions of each card carefully before applying.
Best Business Credit Cards for Specific Needs
Choosing the right business credit card can be a game-changer for your company. Different cards cater to specific business needs and industries, offering advantages that can streamline your finances and maximize your rewards. Let’s explore some of the best business credit cards tailored for specific industries and needs.
Best for Small Businesses
Small businesses often require credit cards that offer flexible rewards, cash back options, and manageable spending limits. These cards can help manage daily expenses, build business credit, and earn valuable rewards.
- Chase Ink Business Preferred Credit Card: This card offers 3 points per $1 spent on travel, dining, and other select categories, making it ideal for businesses with high spending in these areas. It also offers a generous sign-up bonus and valuable travel perks.
- Capital One Spark Cash Select for Business: This card offers 2% cash back on all purchases, making it a solid choice for businesses that want simplicity and consistent rewards. It also features no annual fee and an easy-to-use rewards program.
- American Express Blue Business Plus Credit Card: This card offers 2 points per $1 spent on the first $50,000 in purchases each year, making it a good option for businesses with high initial spending. It also offers a generous sign-up bonus and access to exclusive Amex Offers.
Best for Startups
Startups often need cards with high credit limits, flexible rewards, and benefits that support business growth. These cards can help manage initial expenses, build credit history, and access valuable resources.
- Brex Card: Brex offers a range of business credit cards designed specifically for startups. They offer high credit limits, flexible spending options, and valuable perks like travel insurance and rewards programs. They also have a strong focus on providing resources and support to growing businesses.
- U.S. Bank Business Leverage Visa Signature Card: This card offers a generous sign-up bonus, a high credit limit, and valuable perks like travel insurance and purchase protection. It’s a good choice for startups that need to build credit and manage initial expenses.
- The Business Platinum Card® from American Express: This card offers a high credit limit, valuable travel perks, and access to exclusive Amex Offers. It’s a good choice for startups that need to manage expenses, build credit, and access premium benefits.
Best for Freelancers and Contractors
Freelancers and contractors need credit cards that offer flexible rewards, low annual fees, and manageable spending limits. These cards can help manage project expenses, build credit, and earn rewards for their work.
- Chase Ink Business Cash Credit Card: This card offers 5% cash back on the first $25,000 spent in combined purchases each account anniversary year on office supplies, internet, cable, and phone services, making it ideal for freelancers and contractors who spend heavily on these categories. It also offers a generous sign-up bonus and no annual fee.
- Capital One Spark Miles for Business: This card offers 2 miles per $1 spent on all purchases, which can be redeemed for travel rewards. It also features no annual fee and an easy-to-use rewards program, making it a good option for freelancers and contractors who travel frequently.
- American Express SimplyCash® Business Card: This card offers 1.5 points per $1 spent on all purchases, which can be redeemed for cash back. It also features no annual fee and a simple rewards program, making it a good choice for freelancers and contractors who want straightforward rewards.
Best for Travel and Hospitality, What are the best business credit cards to get
Businesses in the travel and hospitality industry often need credit cards that offer travel rewards, airline miles, and hotel points. These cards can help manage travel expenses, earn valuable rewards, and enhance customer experiences.
- The Platinum Card® from American Express: This card offers a generous sign-up bonus, a high credit limit, and access to exclusive travel benefits like airport lounge access and travel insurance. It’s a good choice for businesses in the travel and hospitality industry that want to maximize their rewards and enhance their customer experience.
- Chase Sapphire Preferred® Card: This card offers 2 points per $1 spent on travel and dining, making it a good option for businesses that spend heavily in these categories. It also offers valuable travel perks and a generous sign-up bonus.
- United MileagePlus® Business Card: This card offers miles for spending on travel and other purchases, which can be redeemed for flights on United Airlines. It also offers travel perks like priority boarding and free checked bags, making it a good choice for businesses that frequently travel on United Airlines.
Best for High-Volume Spending
Businesses with high-volume spending often need credit cards that offer generous rewards, high credit limits, and valuable perks. These cards can help manage large expenses, earn significant rewards, and streamline financial operations.
- Chase Ink Business Unlimited® Credit Card: This card offers 1.5 points per $1 spent on all purchases, making it a good choice for businesses with high-volume spending. It also offers a generous sign-up bonus and no annual fee.
- Capital One Spark Cash Plus for Business: This card offers 2% cash back on all purchases, with an additional 1% cash back on the first $50,000 spent each anniversary year, making it a good option for businesses with high-volume spending. It also features no annual fee and an easy-to-use rewards program.
- American Express Business Platinum Card®: This card offers a high credit limit, valuable travel perks, and access to exclusive Amex Offers. It’s a good choice for businesses with high-volume spending that need to manage expenses, earn rewards, and access premium benefits.
Responsible Business Credit Card Use
Just like personal credit cards, responsible use of business credit cards is crucial for maintaining a healthy financial standing and building a strong credit history for your business. By employing smart strategies and avoiding common pitfalls, you can maximize the benefits of business credit cards while minimizing potential risks.
Setting Spending Limits and Tracking Expenses
Setting spending limits for your business credit card is essential for managing your finances effectively. This helps prevent overspending and ensures that you can comfortably make your monthly payments. To set a spending limit, consider your business’s average monthly expenses and projected revenue. A good rule of thumb is to allocate a spending limit that allows you to comfortably cover your monthly expenses while leaving some room for unexpected costs.
Once you’ve established a spending limit, it’s important to track your expenses diligently. Regularly reviewing your credit card statement helps you identify any unnecessary spending and ensure that your expenses are within your budget.
Paying Bills on Time
Paying your credit card bills on time is crucial for maintaining a good credit score. Late payments can negatively impact your credit history and make it more challenging to secure loans or lines of credit in the future. To avoid late payments, set up automatic payments or reminders to ensure that your bill is paid by the due date.
Monitoring Credit Utilization
Credit utilization refers to the amount of credit you’re using compared to your total available credit. A high credit utilization ratio can negatively impact your credit score. Aim for a credit utilization ratio of 30% or lower. Regularly monitoring your credit utilization helps you identify any potential issues and take steps to improve your credit score.
Building a Strong Credit History
Building a strong credit history for your business is essential for securing financing, obtaining favorable loan terms, and establishing credibility with suppliers and vendors. To build a strong credit history, follow these tips:
- Use your business credit card responsibly: Pay your bills on time, keep your credit utilization ratio low, and avoid maxing out your card.
- Establish business credit accounts: In addition to business credit cards, consider opening other business credit accounts, such as lines of credit or business loans.
- Monitor your credit reports: Regularly review your business credit reports for any errors or inaccuracies. You can obtain a free credit report from each of the three major credit bureaus: Experian, Equifax, and TransUnion.
Avoiding Common Credit Card Pitfalls
Avoid these common pitfalls to ensure responsible credit card use:
- Overspending: Stick to your spending limit and avoid using your credit card for unnecessary purchases. It’s tempting to use credit cards for business expenses, but overspending can lead to debt and financial strain.
- Ignoring fees: Be aware of the fees associated with your business credit card, such as annual fees, balance transfer fees, and cash advance fees. Choose a card with low or no fees to minimize costs.
- Carrying a balance: Try to pay off your balance in full each month to avoid accumulating interest charges. Carrying a balance can significantly increase your overall costs and put a strain on your business’s finances.
- Using your card for personal expenses: Keep your business credit card separate from your personal credit cards. Using your business card for personal expenses can confuse your finances and potentially lead to tax implications.
Last Point
Ultimately, the best business credit card for you will depend on your unique business needs and spending patterns. By carefully considering your options, researching different providers, and comparing features and benefits, you can find a card that empowers your business to thrive. Remember to prioritize responsible credit card use to build a strong credit history and maximize the benefits of your chosen card.
Frequently Asked Questions
What is the difference between a business credit card and a personal credit card?
A business credit card is designed for business expenses and is separate from your personal credit. It helps build business credit, which can be used to secure loans and other financing for your business.
How do I know if I qualify for a business credit card?
Credit card issuers have different eligibility criteria. Generally, you’ll need a good personal credit score and a business with a proven track record.
What are some common perks offered by business credit cards?
Perks can include travel rewards, cash back, purchase protection, extended warranties, and access to travel lounges.
What are some tips for using a business credit card responsibly?
Set spending limits, pay your balance on time, and monitor your credit utilization to avoid accruing high interest charges.