Americans are an entrepreneurial people, with over 30 million small businesses according to the US Small Business Administration. When you’re starting a small business, there are a lot of responsibilities that you have to keep track of, and a credit card could be a vital tool for making company purchases.
The right small-business credit card can offer you an easy way to make purchases, useful benefits, and valuable rewards. Small-business credit cards also usually come with helpful expense tracking and reporting features. Finally, your small-business credit card could be a tool for short term financing of needed business expenses. You won’t want to fund a significant portion of your business with a credit card, which will have higher interest rates than most small-business loans. But you could use it to bridge the gap between your expenses and your accounts receivable.
How small-business credit cards are different from consumer cards
Most credit card issuers offer cards specifically designed for small-business users. But the differences between these cards and consumer cards aren’t as great as you might think. For example, you apply for a small-business credit card with your personal credit history and credit score. And when you’re opening an account, you’re personally guaranteeing repayment of your purchases.
Small-business credit cards are exempt from many of the consumer protection provisions of the CARD Act of 2009, but most major card issuers have chosen to voluntarily have their small-business cards comply with the law. Beyond that, a small-business credit card can offer rewards on the kinds of purchases that small businesses are more likely to make, such as office supplies and telecommunications services. A small-business card could also come with expense tracking and reporting features that you won’t find on your personal cards.
What to look for in a small-business credit card
There are several reasons why a small-business owner may want a credit card, which dictate what you’ll look for. If you’re primarily looking for a means of finance, then you’ll want to consider cards that offer an interest free introductory financing offer for new purchases. But if your goal is to earn rewards, go for a card that features the most valuable points, miles, or cash back for the kind of spending you’ll do. Finally, business travelers should look for perks and benefits, such as airport business lounge access.
Best Business Credit Cards for Financing
Here are small-business credit cards that offer 0% APR introductory financing. These offers aren’t always as generous as personal credit cards, but when used well, they are low-cost way to meet your business needs.
The Blue Business℠ Plus Credit Card from American Express. This card offers 15 months of interest free financing on both new purchases and balance transfers to help you jump start your new business. It also offers 2X points on up to $50,000 a year in purchases, and one point per dollar spent after that. Best of all, there’s no annual fee for this card.
American Express® Plum Card. This is a unique small-business card that’s ideal for short-term business financing. Every time you receive your statement, you’ll have two options. First, you can pay the entire balance within 10 days and get 1.5% cash back. Alternatively, you can take up to 60 days to pay off your balance, with no interest charges. There’s a $250 annual fee for this card, but it’s waived the first year.
Discover it® Business Card. The Discover card has some raving fans on the consumer side, and it recently re-entered the small-business market. It offers small-business owners 12 months of 0% intro APR financing on new purchases, which is a great way to smooth out your finances as you get started. You could also receive 1.5% cash back on all your purchases, plus a cashback match at the end of your account’s first year. This means that you could eventually earn a total of 3% cash back on all of your purchases during the first year. There’s no annual fee for this card.
Best Business Credit Cards to Earn Rewards
Some small-business owners are focused on using credit cards to earn rewards for their spending, instead of financing.
Chase Ink Business Preferred credit card. This card starts off with a phenomenal 80,000 bonus points after spending $5,000 within three months of account opening. It also offers you 3X points on up to $150,000 each year spent on travel, shipping purchases, internet, cable and phone services, and advertising purchases made with social media sites and search engines. Redeem your points for cash back or travel reservations or transfer your rewards to airline and hotel partners. There’s a $95 annual fee for this card.
Capital One Spark Cash. Here’s a simple small-business card with fantastic cash back rates. This card allows your business to earn unlimited cash back on all purchases. No checking categories, you get cash back on everything. You could also earn a cash bonus for spending a certain amount within the dedicated timeframe of account opening. There’s a $95 annual fee for this card that’s waived the first year.
The Business Gold Card from American Express. This card offers 4X points on purchases within two categories that you select, on up to $150,000 spent each year. You also get 25% of your points back after booking a flight using pay with points. Points can be transferred to airline and hotel partners as well. There’s a $295 annual fee for this card, and new applicants could receive 35,000 bonus points after spending $5,000 within three months of account opening.
Best Small-Business Credit Cards for Benefits
Here are the cards with the best small-business perks and benefits.
The Business Platinum Card® from American Express. This card sets the standard when it comes to providing the most generous cardholder benefits. It offers you airport business lounge access in with Priority Pass Select, Delta SkyClub, and the American Express Centurion lounges. You also get elite status with Marriott and Hilton hotels as well as with National and Hertz car rentals. Other benefits include a $200 annual airline fee credit, $100 in annual credits towards Dell purchases, and a year of Platinum Global Access from WeWork shared office spaces. New applicants could also earn up to 75,000 Membership Rewards points – 50,000 after spending $10,000 and another 25,000 after spending an additional $10,000 within three months of account opening. There’s a $595 annual fee for this card, which is steep if you don’t take full advantage of the card perks.
United MileagePlus Club Business Card from Chase. This card offers a whole range of benefits when traveling with United. This includes two free checked bags, priority check-in, security, boarding, and baggage delivery. You also get a United Club airport lounge membership. When used for spending, you could receive 1.5 miles per dollar spent on most purchases, and double miles on all United purchases. You’ll also enjoy Hertz Gold Plus Rewards® President’s Circle® Elite Status. This card offers new applicants a $100 statement credit, which helps to offset it’s $450 annual fee.
By examining the features and benefits of each of these top small-business credit cards, you can choose the right one for your needs.
Depending on your usage, a small-business credit card (used responsibly) is a great tool to earn a little extra from big purchases and your everyday business expenses.