The Best
Small Business
Credit Cards
Most of the credit cards in your wallet are for personal use — like buying a new TV you haven’t saved enough cash for but want.
Business credit cards are different. Here are the main things to know:
- Charge cards and credit cards are the two main types of business cards. While business credit cards work more like typical personal credit cards, charge cards are more like debit cards linked to your checking account. You do not have a spending limit but you are required to pay your bill in full each month.
- While you’ll likely enjoy more spending power with a business credit card, you may also encounter higher interest rates and larger fees.
- You may be held personally liable for charges on a business card that you don’t pay.
- Unpaid balances and late payments may ding your credit score.
Organizations of all sizes can benefit from a business credit card. Such cards mean you don’t have to apply for a loan from a bank or tap into your accounts. Depending on how you use it, and if you can pay the balance off monthly, the right card may even help you reduce your expenses and increase your profit.
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How to Choose a Business Credit Card
Because business credit cards are such a valuable asset, it’s crucial to find one that works well for your organization’s needs. Compare more business credit cards here.
Learn About Business Credit Cards
Business credit cards share similarities with personal credit cards, but there are several fundamental differences:
- Business credit cards still have a credit score, but the range differs. Your business credit score may be reported to one of the three consumer bureaus or a different agency entirely.
- Charge cards and credit cards are the two main types of business cards. While business credit cards are more like a typical personal card, charge cards do not have a spending limit and require you to pay your bill in full each month.
- Business cards do not report to the major credit bureaus in the same ways as personal credit cards.
- They also do not offer the same level of consumer protection.
- While you’ll likely enjoy more spending power, you may also encounter higher interest rates and larger fees.
- You may be held liable for charges on a business card; if your organization is unable to pay off the balance, you may have to use personal funds.
You may realize you aren’t ready for a business credit card — or that you don’t need one — after doing some research. The more you can learn about business credit cards, the better off you’ll be.
Consider Your Plans for the Card
Do you need to make some hefty upfront investments for your business? If so, you may want to look for a card with a 0% intro APR, so you don’t accrue high-interest charges.
However, if you know you’ll likely carry a balance each month, it may be better to find a card with a lower overall APR.
On the other hand, if you plan to use this card to track small amounts of employee spending or to avoid the hassle of reimbursement, you should probably look for a card that offers additional employee cards and plenty of account management tools.
Consider what you plan to use this card for, as this will help you decide which card to apply for. If you don’t consider your plans for a business card, it could end up costing you in the long run.
Examine Your Business Finances
Next, look at your business finances. Consider your existing spending habits, as well as your biggest expenses, to determine what spending limit you need or what kind of rewards program would be best.
For instance, if you travel by air frequently, you may need a card that offers rewards on flights or hotels. If your business travel typically happens by car, you may get more out of a card with a gas rewards program. If you make a variety of different kinds of purchases or are just starting your business, you may want to get a card with a flat cash-back or rewards program until you discover your largest expenses.
Weigh the Cost of Annual Fees
Some business cards charge an annual fee, while others don’t. It may be tempting to spring for a card with no annual fee, but these cards often have basic rewards programs. Cards that charge an annual fee tend to have more comprehensive rewards programs and better signup bonuses.
Depending on how much you spend and how many rewards you earn, paying an annual fee may be worth your while. If you don’t earn as many rewards, you may do just fine with a simpler rewards program that doesn’t require an annual fee.
Factor in Additional Benefits
Finally, factor in any additional card benefits that interest you. These benefits could include:
- Special financing and promotional offers;
- Access to an online account or mobile app;
- Employee cards at no extra cost;
- Business management tools;
- Data organization and reporting;
- Fraud prevention tools;
- Travel perks;
- Additional discounts, coupons, or offers.
These benefits may not be the primary reason you’re interested in a certain credit card, but they can still be nice for you and your employees to have. If you’re interested in two cards that have similar rewards programs but different perks, those perks could be the deciding factor. Further, knowing exactly what you want from your business credit card will help enjoy your card to the fullest extent once you do find the right one.
