LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
LendingTree is an advertising-supported comparison service. The site features products from our partners as well as institutions which are not advertising partners. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.
How to Choose a Business Credit Card
Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through a credit card issuer partnership.
As a small business owner, odds are there’s a lot on your plate. You have to deal with customers, employees, vendors, bills and more, to keep things up and running. Using a personal credit card for business expenses isn’t the wisest choice in the long-run and can lead to headaches come tax season.
That’s where a business credit card can be a great asset by simplifying your purchasing and bill paying. You can earn rewards, benefit from special financing and various protections and track employee spending if you choose to add employee cards.
We’ll review the basics of business credit cards and the key features you should consider before choosing one.
1. Understand how business credit cards work
Before deciding to apply for a card, you should familiarize yourself with several key characteristics of business cards:
Personal liability. In most cases, you — as the business owner — are personally liable for any charges made on your business card account. That includes charges employees make on the account.
Less protections than personal cards. Purchases you make with a business card are not protected under the laws of the CARD Act, so you may see sudden rate increases without notice or shortened grace periods. As a result, it’s very important to pay on time and in full every month.
Charge card vs. credit card. There are two types of business cards: charge cards and credit cards. A charge card has no preset spending limit (though that doesn’t mean unlimited spending) and you’re required to pay your balance in full each month. Meanwhile, a credit card has a preset spending limit, but allows you to carry a balance month-to-month, with interest. It’s also important to note business charge cards don’t offer introductory 0% APRs, while business credit cards do.
Employee cards. One of the main perks of a business card is the ability to streamline spending across your business. You can open multiple employee cards to help you track spending and avoid reimbursing them for business charges made on personal cards. Plus, most business cards provide employee cards at no additional cost. Just remember, you’re responsible for all charges employees make on your account, so have clear charging policies in place as well as procedures to review all employee card purchases.
2. Review your business’s spending habits
The next step is to evaluate your business’s spending habits. Look over your books from the past year to pinpoint common operating costs. Once you identify a repeating spending categories, you can search for a business card that will reward you for those purchases. For example:
Does my business require frequent travel? If yes, it can be a good idea to consider a card that doesn’t charge a foreign transaction fee and rewards travel spending, such as the Ink Business Preferred® Credit Card — Earn 3 points per $1 on the first $150,000 spent in combined purchases on travel, shipping purchases, Internet, cable and phone services, advertising purchases made with social media sites and search engines each account anniversary year. Earn 1 point per $1 on all other purchases—with no limit to the amount you can earn.
Do I entertain clients at restaurants? Consider a card that rewards dining purchases, such as the American Express® Business Gold Card. Get 4X Membership Rewards® points on the 2 select categories where your business spent the most each month*.
Is driving a big part of the day-to-day of my business? A card with higher rewards for gas purchases may help offset the cost, when cash back is redeemed as a statement credit. The Bank of America® Business Advantage Customized Cash Rewards Mastercard® credit card offers Earn 3% cash back in the category of your choice (for the first $50,000 in combined choice category/dining purchases each calendar year, 1% thereafter), 2% cash back on dining purchases (for the first $50,000 in combined choice category/dining purchases each calendar year, 1% thereafter) and 1% cash back on all other purchases
Do I spend on typical business purchases, such as at social media and internet advertising? Once again, the Ink Business Preferred® Credit Card offers a high cash back rate for this type of spending. Earn 3 points per $1 on the first $150,000 spent in combined purchases on travel, shipping purchases, Internet, cable and phone services, advertising purchases made with social media sites and search engines each account anniversary year. Earn 1 point per $1 on all other purchases—with no limit to the amount you can earn.
Unclear spending habits? A flat-rate cashback card may be the answer. If your business’ needs are constantly changing and you can’t find specific categories that you spend in, a business card offering a straightforward cashback program can be a good choice. The Capital One Spark Cash Plus offers 2% cash back on every purchase; 5% cash back on hotels and rental cars booked through capital one travel.
3. Consider added perks
Business cards can provide a wide range of benefits beyond streamlining business spending and earning rewards. Many of the best business cards have special financing offers, spending management tools, purchase protections and more. Here are some perks to consider when comparing business cards:
Free employee cards. It’s fairly common for a business card to offer employee cards at no additional cost, but just check the terms before you choose a card, since some premium business cards may charge a fee for employee cards.
Special financing. Many business credit cards offer intro 0% APR periods on new purchases that typically range from nine to 15 months. During this time period, you can carry a balance without incurring interest charges. If you need to make expensive purchases, such as laptops, printers or office furniture, choosing a card with a special financing period can be a great asset.
Spend management tools. Business cards often offer a suite of perks that make it easy to track spending. Some spending management tools include quarterly and year-end summaries, itemized receipts, the ability to export transactions to Excel or other accounting software and more.
Purchase protection and insurance. The additional benefits provided by business cards can provide you with added protection for unexpected events that would typically require out-of-pocket costs. Look out for business cards that offer purchase protection, extended warranty protection, travel insurance, auto rental damage collision insurance and more.
Airline fee credits. Select premium business cards offer the coveted airline fee credit, but beware that these cards typically come with steep annual fees. For example, The Business Platinum Card® from American Express offers an annual airline fee credit of up to $200 (terms apply), but has a $695 annual fee. While the added perks of this card can outweigh the annual fee, do the math to make sure.
The bottom line
Now that you’ve familiarized yourself with the basics of how business cards work and what they have to offer, you should be ready to choose a card. We’ve rounded up the best small business credit cards in several categories from travel and cashback rewards, to luxury benefits and borrowing, that can help your business streamline spending and save on everyday purchases.