Best Business Credit Cards

Running a business involves managing finances carefully, and one of the best tools at your disposal is a business credit card. These cards offer a range of benefits, from earning rewards on your spending to building your business credit score. But with so many options available, choosing the right one can feel overwhelming. This guide breaks down the best business credit cards on the market, helping you find the perfect fit for your unique needs.

Why Get a Business Credit Card?

Before diving into specific cards, let’s explore why a business credit card is a valuable asset. Unlike personal credit cards, business cards are designed specifically for business-related expenses. They offer features tailored to entrepreneurs and small business owners.

Separating Business and Personal Finances

One of the most significant advantages is the ability to separate your business and personal finances. This separation simplifies accounting, making it easier to track business expenses and prepare tax returns. It also protects your personal credit score from being directly impacted by your business spending. If your business encounters financial difficulties, your personal assets are generally shielded, depending on the business structure.

Building Business Credit

Just like personal credit, your business has a credit profile. Using a business credit card responsibly helps build a positive credit history for your company. A good business credit score is crucial for securing loans, lines of credit, and favorable terms with suppliers. It can also improve your business’s credibility and reputation.

Earning Rewards and Perks

Many business credit cards offer attractive rewards programs, allowing you to earn points, miles, or cash back on your business spending. These rewards can be redeemed for travel, merchandise, statement credits, or other valuable benefits. Some cards also offer perks like travel insurance, purchase protection, and extended warranties, further enhancing their value.

Managing Cash Flow

Business credit cards can help you manage your cash flow more effectively. They provide a line of credit that you can use to cover expenses when needed, allowing you to delay payments until the due date. This can be particularly helpful during slow periods or when dealing with unexpected costs.

Tracking Expenses

Most business credit cards offer online tools and mobile apps that make it easy to track your spending. You can categorize transactions, generate reports, and monitor your overall expenses. This can streamline your budgeting process and help you stay on top of your finances.

Types of Business Credit Cards

Business credit cards come in various forms, each catering to different needs and spending habits. Understanding the different types will help you narrow down your options.

Rewards Credit Cards

Rewards credit cards are designed to incentivize spending by offering points, miles, or cash back on purchases. These cards are ideal for businesses that have significant expenses and want to earn rewards that can be redeemed for travel, merchandise, or statement credits. Rewards rates vary depending on the card and the spending category. Some cards offer higher rewards for specific categories, such as travel, dining, or office supplies.

Cash Back Credit Cards

Cash back credit cards offer a percentage of your spending back as cash. This is a straightforward and easy-to-understand rewards system. Cash back can be redeemed as a statement credit, direct deposit, or check. Some cards offer a flat cash back rate on all purchases, while others offer tiered rates based on spending categories.

Travel Credit Cards

Travel credit cards are geared towards businesses that frequently travel for work. These cards offer rewards in the form of airline miles or hotel points, which can be redeemed for flights, hotel stays, and other travel-related expenses. They often come with perks like travel insurance, airport lounge access, and priority boarding.

0% APR Credit Cards

0% APR credit cards offer an introductory period with no interest on purchases or balance transfers. This can be a valuable tool for businesses that need to make a large purchase or transfer an existing balance. However, it’s important to be aware of the APR that will apply after the introductory period ends.

Low APR Credit Cards

Low APR credit cards offer a lower interest rate than traditional credit cards. These cards are suitable for businesses that tend to carry a balance and want to minimize interest charges.

Secured Credit Cards

Secured credit cards require a security deposit, which serves as collateral for the card. These cards are often used by businesses with limited or no credit history to build their credit score. The credit limit is typically equal to the amount of the security deposit.

Factors to Consider When Choosing a Business Credit Card

Choosing the right business credit card involves considering several factors to ensure it aligns with your business needs and financial goals.

Spending Habits

Analyze your business spending habits to determine which type of rewards program would be most beneficial. If you spend heavily on travel, a travel credit card might be the best option. If you prefer a simple and straightforward rewards system, a cash back credit card could be a better choice.

Rewards Program

Compare the rewards programs of different cards to see which one offers the most value for your spending. Consider the rewards rates, redemption options, and any limitations or restrictions.

APR and Fees

Pay attention to the APR (Annual Percentage Rate) and fees associated with the card. A high APR can quickly negate the benefits of a rewards program. Also, look for fees such as annual fees, late payment fees, and foreign transaction fees.

Credit Limit

Ensure that the credit limit offered by the card is sufficient to meet your business needs. A higher credit limit provides more flexibility and purchasing power.

Perks and Benefits

Consider any additional perks and benefits offered by the card, such as travel insurance, purchase protection, extended warranties, and access to business tools and resources.

Credit Score Requirements

Check the credit score requirements for the card before applying. Most business credit cards require a good to excellent credit score.

Top Business Credit Cards in 2024

Here’s a rundown of some of the best business credit cards currently available, categorized by their strengths:

Best Overall: Chase Ink Business Preferred® Credit Card

The Chase Ink Business Preferred® Credit Card is widely regarded as one of the best overall business credit cards. It offers a generous rewards program, a valuable signup bonus, and a range of travel and purchase protections.

Key Features:

• Earns 3 points per $1 on the first $150,000 spent in combined purchases on travel, shipping purchases, internet, cable and phone services, and advertising purchases made with social media sites and search engines each account anniversary year.
• 1 point per $1 on all other purchases.
• Points are worth 25% more when redeemed for travel through Chase Ultimate Rewards®.
• Signup Bonus: Earn 100,000 bonus points after you spend $8,000 on purchases in the first 3 months from account opening. That’s $1,000 cash back or $1,250 toward travel when you redeem through Chase Ultimate Rewards®.
• Annual Fee: $95

Why it’s great:

The Chase Ink Business Preferred® Credit Card is a great option for businesses that spend heavily on travel, advertising, and other common business expenses. The points are valuable and the signup bonus is one of the most generous on the market. The travel and purchase protections offer added peace of mind.

Best for Cash Back: American Express Blue Business Cash™ Card

The American Express Blue Business Cash™ Card is a solid choice for businesses seeking a straightforward cash back rewards program with no annual fee.

Key Features:

• Earn 2% cash back on all eligible purchases on up to $50,000 per calendar year, then 1% cash back.
• Expanded Buying Power: The ability to spend beyond your credit limit. The amount you can spend above your credit limit is not unlimited. It adjusts with your use of the Card, your payment history, credit record and other factors.
• No Annual Fee

Why it’s great:

The American Express Blue Business Cash™ Card simplifies rewards with a flat 2% cash back on all eligible purchases up to a certain amount annually. The no annual fee makes it a budget-friendly choice for small businesses looking to maximize cash back earnings without extra costs. Its expanded buying power offers added flexibility.

Best for Travel: Capital One Venture X Business

The Capital One Venture X Business is a premium travel card that offers a rich suite of benefits and rewards designed for frequent business travelers.

Key Features:

• Earn 10X miles on hotels and rental cars booked through Capital One Travel.
• Earn 5X miles on flights booked through Capital One Travel.
• Earn 2X miles on all other purchases.
• Receive a 10,000-mile anniversary bonus each year.
• Access to Capital One Lounges and Priority Pass lounges.
• $300 annual travel credit for bookings through Capital One Travel.
• Hertz President’s Circle status.
• Annual Fee: $395

Why it’s great:

The Capital One Venture X Business Card shines as a premium travel solution, offering substantial rewards on travel bookings, lounge access, and annual bonuses. While its $395 annual fee is higher, the $300 travel credit and other perks can offset the cost for frequent travelers.

Best for Flexible Redemption: Chase Ink Business Unlimited® Credit Card

The Chase Ink Business Unlimited® Credit Card provides a simple and rewarding experience with its flat-rate cash back and flexible redemption options.

Key Features:

• Earn 1.5% cash back on all purchases.
• Signup Bonus: Earn $750 bonus cash back after you spend $6,000 on purchases in the first 3 months from account opening.
• No Annual Fee

Why it’s great:

The Chase Ink Business Unlimited® Card is ideal for those seeking straightforward cash back rewards. With its 1.5% cash back on all purchases and no annual fee, it provides simple and reliable benefits. The generous signup bonus enhances its appeal for new cardholders.

Best for Building Credit: Discover it® Business Secured

The Discover it® Business Secured card is designed to help businesses establish or improve their credit score. This secured card requires a security deposit, which serves as collateral and determines the credit limit.

Key Features:

• Earn 2% cash back on up to $1,000 in combined purchases each quarter at gas stations and restaurants.
• Earn 1% cash back on all other purchases.
• Reports to all three major credit bureaus.
• No Annual Fee

Why it’s great:

The Discover it® Business Secured card is perfect for businesses seeking to build or rebuild their credit. With cash back rewards on eligible purchases and reporting to major credit bureaus, it helps cardholders establish a positive credit history without incurring annual fees.

How to Apply for a Business Credit Card

Applying for a business credit card is similar to applying for a personal credit card. Here’s a step-by-step guide:

1. Check Your Credit Score

Before applying, check your personal and business credit scores. This will give you an idea of your approval chances and the types of cards you’re likely to qualify for. You can obtain your credit reports from the three major credit bureaus: Experian, Equifax, and TransUnion.

2. Gather Your Business Information

You’ll need to provide information about your business, such as its legal name, address, industry, annual revenue, and Employer Identification Number (EIN). If you’re a sole proprietor, you may be able to use your Social Security number instead of an EIN.

3. Compare Card Options

Research different business credit cards and compare their features, rewards programs, APRs, and fees. Choose a card that aligns with your business needs and financial goals.

4. Complete the Application

Fill out the online or paper application accurately and completely. Be prepared to provide personal information, such as your name, address, and Social Security number, as well as business information.

5. Submit the Application

Review your application carefully before submitting it. Once you’re satisfied that all the information is correct, submit the application online or mail it to the issuer.

6. Wait for a Decision

The issuer will review your application and make a decision. This process can take anywhere from a few days to a few weeks. If approved, you’ll receive your credit card and a welcome packet with important information about your account.

Tips for Using a Business Credit Card Responsibly

Using a business credit card responsibly is essential for building a positive credit history and avoiding debt. Here are some tips to help you manage your card effectively:

Pay Your Bills on Time

Always pay your bills on time to avoid late payment fees and negative impacts on your credit score. Set up automatic payments to ensure that you never miss a due date.

Keep Your Credit Utilization Low

Credit utilization is the amount of credit you’re using compared to your credit limit. Aim to keep your credit utilization below 30% to maintain a healthy credit score.

Monitor Your Spending

Track your spending regularly to stay on top of your finances and avoid overspending. Use online tools and mobile apps to monitor your transactions and generate reports.

Avoid Cash Advances

Cash advances typically come with high interest rates and fees. Avoid using your business credit card for cash advances unless absolutely necessary.

Review Your Statements

Carefully review your monthly statements to identify any unauthorized transactions or errors. Report any discrepancies to the issuer immediately.

Use Your Card for Business Expenses Only

Keep your business and personal expenses separate. Only use your business credit card for business-related purchases.

Business Credit Card Alternatives

While business credit cards offer numerous advantages, they’re not the only financing option available to small businesses. Here are some alternatives to consider:

Business Loans

Business loans provide a lump sum of capital that can be used for various purposes, such as expanding your business, purchasing equipment, or managing cash flow. Business loans typically have fixed interest rates and repayment terms.

Lines of Credit

A line of credit is a flexible financing option that allows you to borrow funds as needed, up to a certain limit. You only pay interest on the amount you borrow. Lines of credit can be useful for managing short-term cash flow needs.

Invoice Factoring

Invoice factoring involves selling your accounts receivable to a factoring company at a discount. The factoring company then collects payments from your customers. This can provide immediate cash flow for your business.

Equipment Financing

Equipment financing is specifically designed to help businesses purchase equipment. The equipment serves as collateral for the loan. This can be a good option if you need to acquire expensive equipment without tying up your cash flow.

Grants

Business grants are a form of funding that doesn’t need to be repaid. Grants are typically awarded to businesses that meet specific criteria, such as those in certain industries or those that serve a particular community.

Frequently Asked Questions (FAQs)

What is the difference between a business credit card and a personal credit card?

Business credit cards are designed for business-related expenses and offer features tailored to entrepreneurs. They help separate business and personal finances, build business credit, and offer rewards and perks specific to business spending. Personal credit cards are for personal expenses and don’t typically offer the same benefits for business owners.

Do I need an EIN to apply for a business credit card?

Not always. If you’re a sole proprietor, you can often use your Social Security number instead of an EIN. However, having an EIN can make it easier to establish business credit and may be required by some issuers.

How does a business credit card affect my personal credit score?

Some business credit card issuers report account activity to both personal and business credit bureaus, while others only report to business credit bureaus. If the issuer reports to personal credit bureaus, your payment history and credit utilization can impact your personal credit score.

Can I use a business credit card for personal expenses?

While it’s technically possible to use a business credit card for personal expenses, it’s generally not recommended. It can complicate accounting, blur the lines between business and personal finances, and potentially raise red flags with the IRS.

What happens if I default on a business credit card?

If you default on a business credit card, the issuer may take legal action to recover the debt. This can include suing your business and potentially seizing assets. If the issuer reports to personal credit bureaus, your default can also negatively impact your personal credit score.

What is a good credit score for a business credit card?

Most business credit cards require a good to excellent credit score, typically ranging from 670 to 850. However, some secured business credit cards are available for businesses with limited or no credit history.

How can I improve my chances of getting approved for a business credit card?

To improve your chances of getting approved, make sure your credit score is in good standing, have a stable business income, and provide accurate and complete information on your application. Also, consider applying for a secured business credit card if you have limited or no credit history.

Conclusion

Choosing the right business credit card is a crucial decision that can significantly impact your business finances. By carefully considering your spending habits, rewards preferences, APRs, and fees, you can find a card that aligns with your needs and helps you achieve your financial goals. Remember to use your card responsibly by paying your bills on time, keeping your credit utilization low, and monitoring your spending. With the right business credit card, you can unlock a range of benefits and take your business to the next level.