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Small Business Credit Card Report 2021

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Credit cards can be an indispensable part of starting and running a successful small business.

A recent report from the Federal Reserve Bank of New York found that credit cards are the second most common form of financing for small businesses, behind only loans and lines of credit. Visa estimates that 68% of small businesses use a credit card for business expenses.

However, as with personal cards, there are countless options to choose from and it can be hard to know what is or is not a good deal when you apply for a business credit card.

With that in mind, LendingTree reviewed the small business credit cards on offer from 16 of the biggest card issuers in America. We reviewed interest rates, fees, sign-up bonuses and other terms and conditions to get a sense of what types of deals are available for small business credit cards today.

What we found was largely good news. Interest rates for small business credit cards are typically lower than those of other types of cards. There are also plenty of no-annual-fee options available, as well as short-term 0% purchase offers. Plus, there’s a wide variety of rewards options to choose from, depending on the specific needs of your company.

However, it’s still important to do your homework before you apply for a business credit card. Rates can vary widely, as can fees, rewards and other facets of these cards. And, of course, it is important to remember that the best small business credit card is that best meets the specific needs of your business.

Small business credit card overview

Key findings

  • Lower APRs than consumer credit cards. The average APR on a new small-business credit card is 17.82%. That’s a little bit lower than the average for new consumer credit cards, which is more than 19%.
  • Most come with sign-up bonuses. All but three reviewed cards offered rewards, and nearly 75% of those came with a sign-up bonus. The biggest cash bonus? $750.
  • Annual fees are common. Just under half of the small business cards we reviewed come with an annual fee. The median annual fee is $99.
  • Introductory 0% interest offers can be had. 16 of 50 cards came with a short-term offer of 0% APR on purchases. The most common intro-period length was 12 months.
  • Points and miles are more common than cash back. 25 small business rewards cards offered cardholders points and miles, while 18 came with cashback rewards and four others allowed the cardholders to choose between the two.
  • Most cards have set limits on spending but not on rewards earnings. Just 6 of 50 reviewed cards said they had no preset spending limits or that it was possible to spend over your allotted limit. Meanwhile, just 8 of the 47 rewards cards surveyed capped the rewards you can earn on the card each year.
  • Travel was the most common featured category. The most common small business credit card rewards were for travel, dining and gas purchases. However, many cards gave bonus points for spending with office supply stores, cable/internet/wireless companies and even advertising spend, including search advertising.

What’s the average annual percentage rate on a small business credit card?

17.82%. The good news for small business owners is that rate is lower than the average rate for consumer credit cards (19.39%).

Of course, that doesn’t mean you’ll get your best rate when you apply. Like consumer credit cards, most small business credit cards come with a range of rates based on the applicant’s creditworthiness. The average minimum APR is 14.31%, while the average maximum APR is 21.34%.

What’s the average annual fee on a small business credit card?

$170. However, the median annual fee is $99. That’s a truer representation of the state of small-business credit card annual fees, as the average is skewed by the fact that one card we reviewed had an annual fee of $595.

A little over half of small business credit cards had no annual fee — this means that if you’re dead set against paying one, you wouldn’t have to. However, as with consumer cards, it’s important to understand that the cards with the better rate of return on rewards might come with an annual fee.

What’s the average sign-up bonus on a small business credit card?

It depends on the type of rewards being offered:

  • For a cash back card, the average is $398.
  • For a points and miles card, the average is 68,000 points.

And while that 68,000-point average bonus may sound great, remember that all points and miles are not created equal — 68,000 miles may get you a lot in return from a particular airline or hotel chain, but it may not amount to much from another.

Before you apply, look into what those miles or points will get you. Card issuers will often give you an example of either the dollar value of those points or the type of flight or room you could get with the points. That’s important to know — otherwise you could wind up disappointed.

Do small business credit cards come with 0% APR introductory offers on purchases and balance transfers?

Some absolutely do.

About a third of the reviewed cards came with an introductory 0% APR offer on purchases, but fewer than 1 in 10 cards came with a 0% APR offer on balance transfers.

For purchases, the most common duration was 12 months and offers ranged from six to 15 months. For balance transfers, every card had a different introductory period, ranging from nine to 15 months.

Which type of rewards are more common with small business credit cards: Cash back or points and miles?

Points and miles rewards were more common than cashback rewards on small business credit cards.

Of the 47 cards that offered rewards, 25 offered points exclusively and 18 offered cash back exclusively, while four more gave the cardholder the option to choose.

Of course, many of those points cards will allow you to redeem those points for cash. However, the cards are primarily marketed as being points cards, so that’s how we categorized them for this report.

What rewards categories earn the most points with small business credit cards?

Travel, dining and gas, with travel being the most common.

Office supply purchases was a popular category, too, as was spending on cable, internet or wireless. Plus, several cards offered extra rewards for spending on advertising.

Are there usually limits on how many rewards you can earn on a small business credit card?

No. Just eight of the 47 rewards cards we reviewed advertised some level of cap on rewards earning.

Typically, these caps set limits on how many extra points or cash-back dollars can be earned at a higher earnings rate before reverting to a lower rate. For example, you might earn 2% cash back on purchases up to $50,000 of combined spending in certain categories; for all spending beyond $50,000, the earnings rate drops to 1%.

Do small business credit cards come with preset spending limits?

Typically, yes, but not always.

Six of the 50 small business credit cards we reviewed advertised either that they had no preset spending limit or that cardholders could have the flexibility to spend over the limit on their card, though not an unlimited amount.

What major credit card issuer offers the most small business credit card options?

American Express, by a mile.

We reviewed websites from 16 major credit card issuers. Twelve offered small business cards, while just four did not.

American Express listed 14 small business cards on their website, twice the amount offered by the issuer with the second-highest number of that we reviewed (Capital One, with seven).

Methodology

LendingTree reviewed 50 small business credit cards from 16 of the nation’s largest issuers. We looked at the card information available to the public on their issuers’ websites and determined averages and median numbers based on our findings. The data involved is up to date as of May 4, 2021.