What are business credit cards?
The term “business credit cards” refers to cards offering rewards and bonuses that appeal to business owners and employees. For the road warrior, a good business credit card would be the Ink Business Preferred℠ Credit Card. This is because it offers 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants (each account anniversary year). Then, those rewards can be redeemed for business travel purposes at most major airlines.
Why get a business credit card?
If you can get a business credit card that rewards your professional spending, why shouldn’t you get a business credit card? Business credit cards are one of the best ways for employees and business owners to earn money while spending money. An employee can put all their professional expenditures on a business credit card and, in some cases, put those rewards toward free travel (for business).
Simply put, business credit cards can help your business grow. You make the purchases you need to operate, and at the same time earn something extra.
Other reasons include:
- An easy means of divorcing personal and professional spending
- Financial flexibility on big ticket purchases
- Earning rewards you can often put toward business interests
Which business credit card is easiest to get?
The answer to this question can vary depending on the size of your business and the card provider you’re looking at. In general, small business credit cards tend to have a comparatively easier approval process. It’s important to shop around and consider all possible options to ensure you’re getting the best possible business credit card for your needs.
What is the best small business credit card?
The best small business credit card is the one that meets your professional financial goals. For instance, are you a small business owner? Then you might consider the Ink Business Cash℠ Credit Card. On the other hand, big businesses may consider The Business Platinum® Card from American Express OPEN. If you travel a lot, you may want a no-fee travel card, like the Discover it® Miles. Take a moment to think about your professional goals for the next few years and compare the best business credit cards on our list to find the right one for you.
What is a micro business credit card?
While not applicable in the United States (as of the writing of this piece), you might have heard about a micro business credit card. The term “micro business credit card” refers to a business credit card issued by the West Bengal Government of India. It is described as a card that facilitates small and medium business entrepreneurs. In some respects, it is similar to the small business credit card you can obtain in the United States.
Can I use a business credit card for personal expenses?
While it is possible for you to charge your personal expenses to a business credit card, you shouldn’t. Mainly for tax purposes, it’s best to keep your personal and professional expenses separate. This is especially true in the event that your business is audited. In that situation, it’s much easier to organize the relevant professional expenses when you limit them to a business credit card.
Can I apply for a business credit card?
The requirements for each card may vary, but in general, if you’re a business owner — large or small — then you qualify to apply for a business credit card. If you’re a small business owner, they may look into your credit profile and you may be asked to share your personal income information as well. Be honest on your application, though, because if you’re caught in a lie, you may be subject to a financial review.
Who are small business credit cards good for?
Small business credit cards are often best suited to self-employed individuals as well as freelancers and consultants. These can include doctors and dentists who run their own practices, business owners who spend heavily on office supplies, sales associates who travel frequently, and even consultants who need to entertain their clientele.
Do business credit cards affect your personal credit score?
The short answer: Maybe. Signing up for one of the best business credit cards is a great way to separate personal and business finances; however, it depends on the card whether or not it will affect your personal credit score. Almost all business credit cards require personal guarantees, but, some will only report activity to commercial credit bureaus, not consumer credit bureaus that handle your personal credit score. You may need to call your card’s customer service representative to find out which bureaus they report to.
How can I check my business credit?
Similar to how you check your personal credit report, you can request a business credit report from the three major commercial credit bureaus — Dun & Bradstreet, Equifax and Experian. A fourth credit bureau, FICO® Small Business Scoring Service (SBSS), specializes in small businesses. With your business credit report, you’ll be able to easily check and monitor your business credit score, background information, risk factors, banking, trade and collection history, liens and bankruptcies, and more. Unlike your personal credit report, you may be charged a fee to access your business credit report.
As mentioned above, some credit card companies will report your business credit card information to the consumer credit bureaus as well, meaning it’s still important to check your personal credit report once a year (or more often) as a small business owner. With both reports, you’ll want to check for any discrepancies and, if found, take steps to dispute them.
How to use a business credit card to manage cash flow
Managing cash flow is crucial to the longevity of your business, big or small. Whether you sit at the head of a large corporation or freelance, it pays to keep track of your cash flow. A business credit card can help, and we’ve put together a handy list of real-life examples that illustrate the impact the right business credit card can have.
Real life example #1
Sometimes a self-employed freelancer will find themselves in that awkward interval waiting to receive payments from various clients. During this period, everyday expenses on office supplies, internet service, and more can pile up. Normally, this freelancer might be out of luck until those payments arrive. However, with a business credit card, those necessary business purchases could be charged temporarily and then paid off once client payments trickle in.
Real life example #2
An owner of a small business (10-12 employees) wraps up a huge project for a client, but payment is forthcoming. Payroll sends an email saying that there are not enough funds in the current budget to maintain business operations and pay the employees. With a business card, all the day-to-day business expenses could be temporarily charged, while freeing up funds to pay the employees on time. And after the client’s payment is received, the company owner could pay off the balance before it accrues interest.
Real life example #3
The CEO of a large business has determined that a purchase of $50,000 worth of equipment is necessary. However, he wants to be able to pay this off over several months without taking out a large loan. In lieu of a loan, the business could utilize a high-limit business credit card. Many cards offer 0% intro APR on purchases, which would function like an interest-free loan if paid in full before the end of the intro period. Plus, the business could earn cash back through the card’s rewards program!
Are business credit cards really worth it?
That all depends on the size of your business and your professional spending habits. Feasibly, there’s enough variety in business credit cards and the perks offered to warrant a card for enterprises of all sizes and types. We’ve profiled a several business credit cards that would be worth getting for businesses both large and small.
If your business makes a lot of purchases, it might be worth getting a business credit card so you can earn some rewards on those expenses. As we have covered, with The Business Platinum® Card from American Express OPEN, it’s easy to turn your everyday spending into rewards redeemed for free travel. Since a lot of successful business requires the occasional trip, it would certainly be worth looking into a business credit card that pays for your travels while you pay for your professional costs.
The following list outlines a few other reasons why business credit cards are worth it:
- They can make recordkeeping much easier come tax season
- They help build business credit, which can impact your business insurance
- Some offer business-specific perks like deals on advertising
As a business owner, you could be making a sound investment by choosing one of the best business credit cards on our list. The rewards you could earn on business-related charges can more than make up for any annual fee. Additionally, having a business credit card helps you to draw a line between personal and professional when it comes to expenses and tax returns. If one of these cards sounds right for your business, apply online today to start earning valuable rewards!
Research the 25 best business credit cards
We’ve put together an objective comparison of business credit cards to help you find the right one. This analysis includes annual fees, foreign transaction fees, rewards, signup bonuses, perks, and other characteristics you might find of interest.
Take a moment to sort, filter, or search for what matters most to you in a business credit card.
Perks Tier Level
Sign up Bonus Tier Level
Rewards Tier Level
Great Signup Bonus
Great Ongoing Rewards
No Annual Fee
No Foreign Transaction Fee
Best business credit cards for 2018
- The Business Platinum® Card from American Express OPEN : Best for big businesses
- Ink Business Preferred℠ Credit Card : Best business card signup bonus
- Bank of America® Business Advantage Cash Rewards Mastercard®: Best for domestic business travel
- Bank of America® Business Advantage Travel Rewards World Mastercard®: Best for international business travel
- Ink Business Cash℠ Credit Card : Best for small business
- Starwood Preferred Guest® Business Credit Card from American Express : Best hotel card for business owners
- The Business Gold Rewards Card from American Express OPEN : Choose your own rewards category
- SimplyCash® Plus Business Credit Card from American Express : Best for low maintenance rewards
- Discover it® Miles : Best no-fee travel card