Small business credit cards help to separate a business owners’ personal and company finances and help to cover unexpected business expenses and to close financial gaps whenever necessary. More importantly, a small business credit card can help new businesses to establish a new credit history from scratch.
Business credit cards are similar to consumer credit cards as they mostly rely on the owner’s personal credit history and some will post all account events on their personal credit report.
Generally, business credit cards rewards rates, sign up bonuses and cash back offers are more generous than those offered by consumer cards. The main reason for this being that business card expenditures are, on average, much larger in volume than those that personal cards tend to incur
Have a look at our editor’s top picks. as well as some advice on business cards for new and established business below.
$0 first-year annual fee, $59 after
earn 2% on all purchases, get up to $300 sign up bonus by spending and signing up employees
With a 2% cash back flat rate on all purchases, this card is a leader in its category. The sign-up bonus is $500 after you spend $4,500 on the card within the first three months of opening the account. As a standard, Capital One doesn't charge any foreign transaction fee.
no annual fee
up to 5% cash back
With the Chase Ink Cash credit card, you will get 5% cash back on office supplies and telecom services, 2% cash back for gas and on dining and 1% cash back on purchases and dining you will get 2% back, and on all other purchases.
Extra cards for employees are offered for free, with the option to set spending limits readily available. A sign-up bonus of$200 is offered after you spend $3000 on the card in the first three months. This card also offers 12 months of 0% APR and a low 13.24% ongoing variable APR.
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$95 annual fee
20% bonus on your points when redeemed for travel
redeem for travel, cash or gift cards
This card offers 60,000 bonus points as a sign-up bonus after you spend $5,000 in the first three months after opening the account.
Rewards are five points for every dollar spent on office supplies and telecom purchases, two points on gas and hotel reservations, and one point for all other purchases. Ultimate Rewards Points are highly valued at 1.25 cents each and can be redeemed for travel or transferred to popular loyalty programs at a 1:1 ratio.
$0 first-year annual fee, $59 after
Earn 2% No Hassle Miles on all purchases. Up to 50,000 sign up bonus
With Spark Miles for Business, you get 50,000 miles sign-up bonus after you spend $4,500 on the card, a flat rewards rate of 2 miles per dollar applies for all purchases.
You also can order free additional cards for your employees.
Like consumer credit cards, business credit cards often feature various rewards programs. The general consensus is that programs that offer maximum rewards for office supplies purchases and business telecommunication purchases are preferable. Most banks offer those types of rewards for small business, however, large purchases, such us computers, phones, and other equipment, are typically excluded from the maximum rewards categories.
Extra rewards on gas and travel expenses are sometimes beneficial if your business requires traveling. However, each company should consider its own spending patterns before choosing a given rewards program in order to maximize rewards.
Typically redeeming business credit card rewards is reserved for the company's owner. Go for a travel rewards card if you feel as though a good vacation is needed. However if you prefer hard cash, cahs bakc programs are the way to go.
If you find it difficult to apply for a credit card because of your personal credit problems or a low credit score, you can take advantage of options similar to individual cards – secured business credit cards and pre-paid business cards.
However if your credit is Fair or Average - there is a perfect solution for you.
Best business credit card for fair credit is Capital One Spark Classic
This card is 1% cashback earner with no annual fee. The best part is that it is available for people with fair or average credit.
If your credit isn't the greatest, your best choice for a business credit card is a secured card. These cards are not instant approval, but it is a far easier to get approval for a secured card than for a regular one. We selected two secured cards for small business for you - both of them offer reward programs, additional employee cards and credit lines up to $25,000 depending on your security deposit size.
The overwhelming majority of applicants will need to sign a personal guarantee with the application. Typically, banks are unwilling to extend unsecured credit to small or new companies without a personal guarantee. However, medium to large companies with an established credit and more than 2 year old history and having more than $1mm in annual sales can avoid the guarantee. Still, most small business owners should assume the personal guarantee as a requirement.
Same applies to reporting on an owner’s personal credit.
Be aware that if you draw a large sum from your small business card, your personal score will take a hit because the debt to credit limit utilization will change.
The CARD Act doesn't cover business credit cards. For that reason, these credit cards lack owners’ protection given to consumers by the Act. Rate increases and other account changes occur more often with business cards, but business and personal credit cards share a great number of similarities today.
Many banks and financial institutions voluntarily extend personal card protections to business credit cards.
Each business owner should read the fine print before applying for a given card because sometimes fees and terms can be less transparent than those for consumer cards. Terms and conditions should spell out how much notice banks will provide before changing an account's terms and how interest rate increases work.