One of the many decisions you have to make about your company is if, and how, to choose among the best small business credit cards. When used wisely, they can be a useful strategic financial tool.
I've investigated the top credit cards for small business and beyond in order to help you sort out the best offers.
Business credit cards can help keep your personal and business expenses separate, which is important for many reasons including organizing your taxes each year. Also, business cards don't affect your personal credit score and help establish your business's own credit history.
Best Small Business Credit Cards: What to Consider
Best Small Business Credit Cards
Choosing the right card depends on what kind of business you have, what your spending habits are and what kind of rewards you want. Here are some things to think about when you are looking at different cards.
- Consider how you typically spend and pay your bills. Do you pay in full at the end of each month? Do you pay over time and use credit?
- What expenses do you have? Compare the savings of travel reward miles or cash back.
- Pay attention to annual percentage rates. They often change so researching this and asking the credit card company yourself is the best way to get an accurate number.
- A card that allows you to pay your bill with the cash you earn is preferable. If you have to use it to buy something, you miss out on earning more cash on the purchase.
Business credit cards often have excellent perks, sometimes more so than a personal credit card. Choosing the right card for your particular business can really help you streamline your finances and it can get you cash, travel miles or other perks that may be ideal for your business.
What Is the Best Small Business Credit Card?
The answer to this question will differ for every company. In fact, there's such a range of benefits among the various top rated business credit cards that the Better Business Bureau recommends considering having more than one for different uses. Overall, however, the main factor in your decision will be how large your company is and where your main spending occurs. Keep the following in mind:
- Do you have a large annual expense budget? Choosing a card that only rewards you up to a certain amount in purchases might not be better than unlimited earning at a lower rate, even if you're paying no annual fee or getting a long introductory APR.
- Do you need to be able to limit employees' spending power? Not every card allows individual spending limits.
- Is travel crucial to your company? Choose a card with the most lucrative hotel and airline affiliations. Some cards let you boost rewards by combining programs.
There are offers in my business credit card comparison to meet the needs of virtually any size and type of enterprise.
Best Practices for the Best Business Credit Card
The best business credit cards are useful tools for a business of any size to streamline purchasing, track expenses and manage cash flow. As with any tool, there are best practices for use of a business credit card. With an overview of these best practices, along with the selection of a card with the right features, business owners and managers use them to build and maintain a successful operation.
"Don't be afraid to (politely) let the card company representative know you will take your business to the competition if necessary."
Use the Card for Business Only
Do not use a business credit card for personal purchases, it confuses business expense tracking and tax planning. The IRS does not want to see your personal entertainment or vacation expenses listed as business expenses. According to Entrepreneur Magazine, differentiating the two can be a fine line.
Pay the Balance Monthly
Nasdaq reports that half of small business owners carry a balance on their cards each month. As with personal credit cards, it is easy to run up a balance and hard to pay it down. Think of purchases as coming out of cash, not as credit purchases. Buy only the goods and services necessary to the ongoing needs of daily operation. Avoid taking cash advances, as there are additional fees incurred on top of interest charges.
Get a Card that Works for Your Business
Shop for features that work best for your business. Compare interest rates, annual fees, grace periods, and reward features.
The Best Small Business Credit Cards
Chase Ink Cash
- No annual membership fee
- Competitive cash back program
- Introductory bonus
- 0% APR for the first year
- Travel and emergency insurance benefits
- High cash back rates are limited to the first $25,000
- Foreign transaction fees
The Chase Ink Cash Business card offer several attractive incentives. In addition to a solid rewards program, spending $3,000 in the first 3 months will net you an extra $300 cash back. If you plan on using this as the main card for your business, this is a nice perk.
The cash back rewards system is fairly competitive. Each year the first $25,000 you spend on business needs like office supplies, mobile phones, landline service and even cable TV and internet will earn you 5% cash back. You can also earn 2% on the first $25,000 each year in purchases made at restaurants and gas stations and 1% on all other purchases. If your business expenses are represented in this rewards program, the Ink Cash card makes it worth your consideration.
Although the rewards program offers competitive cash back rates, the limitation of $25,000 a year before your 5% on office supplies drops to 1% is a bit of a drawback. If your business spends money in a variety of areas or spends moderately in the areas that are covered by the rewards program, then it still may be worth it. Plus, other factors like 0% APR for the first year and the fact there is no annual membership fee may entice you. However, if your company spends a lot in those areas each year, it may be better to look at another card.
Ink Cash Business card is an excellent choice for small to medium sized companies which can take advantage of their rewards program. Large companies with significant annual spending on things like office supplies or phone bills may want to look for a program with higher limits or none at all.
- Sign-up bonus: Spend $3000 in the first 90 days and get $300 cash back.
- Key fees: There is no annual fee. Other fees are as follows: cash advance - 5% or $15, whichever is higher, balance transfer - 5% or $5, returned payment - $39, late payment - $15-$39, foreign transactions - 3%.
- Introductory APR: 0% for 12 billing cycles - this applies to both new purchases and balance transfers.
- APR: The APR for balance transfers and purchases, following the intro APR, ranges from 13.49% to 19.49%, dependent upon creditworthiness. Cash advance APR is 25.24%. All Chase Ink Cash APRs are variable according to the Prime Rate.
- Other perks: Chase Ink Cash provides an extended one-year warranty on purchases with a warranty of three years or less. The Purchase Protection Plan protects against theft or damage for up to 120 days, at a rate of $10,000 per claim and a maximum of $50,000 per card account. Other travel benefits include emergency assistance, rental car protection, and lost luggage reimbursement. Extra employee cards are free.
Chase Ink Plus Business
- Comprehensive rewards program
- Points bonus for spending $5000 in the first three months
- Points worth 25% more if spent on travel rewards
- No foreign transaction fees
- Ability to set individual employee spending limits
- $95 annual fee
- No introductory APR
Chase Ink Business Preferred is the successor to the Chase Ink Plus Business. This card offers multiple advantages, particularly for larger business with considerable expenditures. One of the best features of this card compared to other versions in my review is the generous rewards program.
You'll earn 3x points on purchases in eligible business categories like internet, shipping, travel, and phone services. This three-times multiplier is active up to $150,000 in purchases. After that, you earn one point per dollar spent, just as on all purchases. The one-point rewards tier has no maximum earning limit. In addition, you'll get 80,000 bonus points for spending $5000 within your first three months of card ownership.
Where the Chase Ink Business Preferred really shines is in the area of travel. Not only do your travel expenses earn at the 3x points level, but when you redeem your points for travel-related expenses you get a 25% boost in their value. In other words, 100,000 points becomes either $1000 in cash or $1250 in travel money.
While there is a hefty annual fee for this card, my analysis found it to be one of the most outstanding options for medium to large businesses due to the rewards program and travel benefits.
- Sign-up bonus: Once you spend $5000 in your first three months, you'll get 80,000 bonus points. That's equivalent to $800 in cash or gift cards, or $1000 in travel expenses via Chase Ultimate Rewards.
- Key fees: The annual fee is $95. Other fees include cash advances at the higher of 5% or $15, late payments between $15 and $39 depending upon balance, and returned payment at $39. Balance transfers are quoted at the greater of $5 or 5%, however the terms state that this type of account may not be eligible for balance transfers so you should check directly with Chase for more information.
- Introductory APR: This card does not offer an introductory APR.
- APR: The Chase Ink Business Preferred APR is 16.24% - 21.24% at the time of this review, with a cash advance APR of 25.24%. These are variable and subject to change.
- Other perks: There are no foreign transaction fees, and there are four different ways to redeem your bonus points. In addition, you'll get travel perks like roadside dispatch, extended warranties, and cell phone protection for up to $600 per claim against theft or damage (you must pay your cell phone bill with your card to be eligible).
- No annual fee
- 0% APR for nine months
- Comprehensive rewards program
- Choose your cashback category
- Ability to set employee card spending limits
- Foreign transaction fees
- No balance transfer
SimplyCash Plus is a top business credit card offering from American Express. This card spares you an annual fee, plus allows you to earn customizable cashback rewards via a three-tier earning system.
You get 5% on purchases from office supply stores and wireless phone services from U.S. providers, up to $50,000 in purchases. The 3% cashback tier allows you to choose a category from a list including gas, restaurants, airlines, hotels, and more. The 3% earnings level is also available up to $50,000 in purchases. You earn 1% on everything else, and on the two higher tiers once you hit the $50,000 limit.
One of the most attractive features of this card is the ability to make larger purchases above your credit limit. The amount you spend above your limit is due on top of your monthly minimum payment - you cannot carry a balance on your overage. In my research of the best credit cards for business use, this is the only card which allows you that option. This alone helps to put SimplyCash Plus on my list of the five best top rated business credit cards.
- Sign-up bonus: SimplyCash Plus offers one of the most modest bonuses in my analysis, at $250 for spending $5000 in your first six months.
- Key fees: You'll pay 3% or $5, whichever is higher, for cash advances. Foreign transactions are charged at 2.7%, and late or returned payments fall in at $38.
- Introductory APR: You'll get a 0% APR on the SImplyCash Plus for the first nine months of account opening.
- APR: Your regular APR will be 12.49%, 17.49%, or 19.49%, dependent upon your credit rating.
- Other perks: There's no annual fee, no overlimit penalty, and you receive a full complement of benefits like baggage insurance, purchase protection, roadside assistance, extended warranties, and more.
Capital One Spark
- Unlimited 2x miles on purchases
- Generous sign-up bonus
- Annual fee waived the first year
- No category restrictions
- No foreign transaction fees
- Cash back option redeemed at lower value
Capital One Spark Miles for Business is a solid performer if you're in search of the best business travel credit card. This contender in the top business credit cards segment excels at precisely what it's designed for - rewarding you for business purchases while reducing the pain of travel costs.
The most attractive features of the Spark Miles card are the unlimited 2x miles awarded for any of your business purchases, with no categories to worry about tracking, and the zero minimum redemption requirement. This means that even if you only have $200 available in reward points and book a $500 airline reservation, you can still apply that partial amount to your travel expense.
In addition to the lucrative, straightforward rewards program, you'll get 50,000 bonus miles as soon as you spend $4500 in the first three months of card ownership. You also get the first year free of the annual fee.
- Sign-up bonus: 50,000 miles ($500 in travel money) once you spend $4500 on your card within the first three months of account opening.
- Key fees: After the first year you'll pay a $59 annual fee. There is a fee of up to $39 for late payments, and a cash advance fee of the higher of 3% or $10.
- Introductory APR: There is no introductory APR for the Capital One Spark Miles for Business.
- APR: The APR is 17.24%, with a cash advance APR of 23.24%. The penalty APR stands at 29.65% at the time of this review. These are subject to variation with the Prime Rate.
- Other perks: Capital One never charges foreign transaction fees, and your rewards never expire as long as your account is open. You also get a full suite of Visa Business perks like purchase protection, auto rental coverage, and emergency travel services.
Capital One Spark
- 2% cash back on everything
- No fee for adding cards
- Easy to earn signing bonus
- Unlimited rewards
- No annual fee for the first year
- $59 annual fee after first year
- No extra cash back for specific purchases
If your business has more offbeat expenses than typical office supplies and phone bills, then it is a good idea to find a card with a higher cash back rate for all purchases. The Capital One Spark Cash card offers 2% cash back on all purchases, which is preferable to the 1% that many other cards offer. There is no perk that allows you to earn extra cash on specific purchases, but for companies with unique expenses 2% on everything may be better.
The Spark Cash card has a few other benefits that make it great for business. You can add cards to your account at no additional cost. This lets you give company cards to your employees.
There is an annual fee of $59 after the first year, but this is comparatively low. If you find the card's benefits appealing they may be worth the fee.
The Spark Cash card from Capital One has a variety of perks that are designed around business. There is an annual fee and no high cash back rates for specific purchases, however the unlimited reward earnings make this a favorable option if you're looking for the best business rewards credit card.
- Sign-up bonus: You'll get a $500 statement bonus after spending $4500 within the first three months.
- Key fees: After the first year there is a $59 annual fee. Cash advances cost the greater of $10 or 3%, and late payments carry a fee of up to $39.
- Introductory APR: There is no introductory APR for the Capital One Spark Cash for Business card at the time of this review.
- APR: The APR for new purchases and balance transfers is 17.24%. The cash advance APR is 23.24%, and the penalty APR is 29.65%.
- Other perks: You'll get quarterly and year-end itemized reports of your spending in order to assist in budgeting and at tax time. There are no foreign transaction fees, and you'll receive the standard Visa Business benefits of rental car collision insurance, purchase protection, as well as extended warranties which double the manufacturer's warranties.
Best Business Credit Cards APR Strategies
While it's best not to carry a balance, it's likely to happen at some point. Obviously the most effective way to combat hefty charges is to compare interest rates when shopping for a business credit card. The following are additional steps you can take to make sure you're protecting your bottom line:
- Check every statement to insure the interest rate has not increased.
- If you notice a change in APR, call the card issuer and request a return to the old rate, or a reduction in the rate.
- Don't be afraid to (politely) let the card company representative know you will take your business to the competition if necessary. Sometimes a little motivation is all that's needed to give you more favorable terms.
- As a last resort, change to a card with a lower rate.
The better your creditworthiness, the more leverage you have to negotiate a good APR on your business credit card. If you do manage to get your issuer to agree to lower your rate, I recommend requesting the change in writing.
Best Business Credit Cards Balance Strategy
Businesses offering payment terms (such as net 30), maintaining a retail inventory, and with seasonal lows may need to borrow funds to finance cash flow. As I mentioned above, the best practice is to avoid running a balance on your card at all. If you do, however, there are some guidelines you should follow.
Borrow only within proven cash flow, realistic sales projections, or to finance accounts receivables. Account for the cost of interest in profit projections. Pay the balance promptly when the expected funds come in. Cash advances on business credit cards typically come at painfully steep interest rates, so consider other forms of finance with low interest rates. Options include a business line of credit or an asset based equity loan.
Best Small Business Credit Cards Recap
Choosing a business credit card has a lot to do with the way you spend your money. Choose a rewards program that best suits your company. Also, if travel miles are more appealing to you than cash, many of the top cash cards have mile earning counterparts.
The right credit card isn't the only financial tool you need for your business to run smoothly. Check out the best small business loans to find the best deal on your next loan. In addition to getting the most competitive rates on your own cards, your company may also be looking for the best credit card processing companies.