Small business credit cards offer easy access to credit along with excellent rewards. The top offers come with significant signup bonuses and fraud protection. Here are the best business credit cards of 2021.
- Best Overall Business Credit Cards for 2021
- Cash Back Business Credit Cards
- Travel Rewards Business Credit Cards
- Hotel Rewards Business Credit Cards
- Airline Business Cards
- Choosing the Best Card for Your Business
- Business Credit Card FAQs
- Managing Business Expenses with a Credit Card
- Basics of Business Credit Card Rewards
- How to Apply for a Small Business Credit Card
Since launching my own small business in 2007, I’ve used a business credit card. While some entrepreneurs choose not to use a business card, I’ve always found it a good choice for several reasons.
For one thing, using a separate business credit card makes keeping my business expenses separate from my personal expenses a snap. Whether your business has loads of expenses or only a few, good bookkeeping is essential. Getting into the habit of charging all business-related expenses to a separate business credit card early on streamlines bookkeeping and makes tax time easier.
There’s an argument to be made, of course, for simply using a separate personal credit card for business expenses. And some solopreneurs go this route. The one major advantage to using a business credit card, however, is that it allows you to build your business’s credit. If there comes a point when you need a small business loan to expand, you’ll need this credit ready and waiting.
One final reason to consider using a business card is that it’s easier to share expenses safely. You can quickly give your partner or employees access to the company’s money through the card. And individual card-level expense tracking means you know who is spending money on what at any given time.
Business credit cards do have some caveats, which we’ll talk about below. But, first, let’s discuss our top business credit card picks for 2021.
Best Overall Business Credit Cards for 2021
Chase Ink Business Cash Credit Card
The Chase Ink line has been very popular among business owners, and with good reason. These cards are easy to use and offer great rewards. The Chase Ink Business Cash Credit Card is a great card for smaller businesses looking for excellent rewards with a simple cash back structure. You can also scale it up as you start spending more for your business. It offers flexible rewards, and rewards can be redeemed in a myriad of ways.
With all Chase Ink options, you can redeem rewards in several different ways. You can use cash to offset spending right away. Alternatively, you can use the Chase Ultimate Rewards program to buy travel tickets, hotel stays, gift cards, or other items.
The Chase Ink Business Cash Credit Card is an excellent card for business owners with good credit who won’t spend enough to outstrip the annual fee of the Chase Ink Business Preferred Credit Card (see below). It offers great cash back on spending categories typically used by business owners, as well.
- Signup Bonus: Earn $750 bonus cash back after you spend $7,500 on purchases in the first 3 months from account opening
- 5% Rewards: Earn 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable and phone services each account anniversary year
- 2% Rewards: Earn 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year
- 1% Rewards: Earn 1% cash back on all other card purchases with no limit to the amount you can earn
- Intro APR: 0% introductory APR for 12 months on purchases
- No Annual Fee
American Express Blue Business Cash™ Card
The American Express Blue Business Cash™ Card is one of the few 2% cash back credit cards. It does have a spending cap (see below).
- Earn 2% cash back on all eligible purchases on up to $50,000 per calendar year, then 1%.
- Cash back earned is automatically credited to your statement.
- Spend beyond your credit limit with Expanded Buying Power.
- 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, financial resources known to us and other factors.
- 0% intro APR on purchases for 12 months from the date of account opening, then 13.24% - 19.24% Variable
- No Annual Fee
- Terms Apply (See Rates & Fees)
Chase Ink Business Preferred Credit Card
As you can see, we like the Chase Ink line here at allCards. The Chase Ink Business Preferred Credit Card is a bit different from the Chase Ink Business Cash Credit Card above, but offers some excellent rewards. This can be a good card if you’re a big spender for your business, especially in certain categories. This card does have an annual fee, but it makes up for that fee with great rewards.
The card gives you a variety of options for redeeming points, including travel, cash back, gift cards, and more. If you have great credit and spend big for your business, this is a great card to consider. Although it has a $95 annual fee, the welcome bonus alone is worth $1,250 in travel. That bonus makes the Chase Ink Business Preferred Credit Card one of the most lucrative rewards cards available today.
- Signup Bonus: Earn 100,000 bonus points after spending $15,000 within your first 3 months.
- Bonus Points worth $1,250 toward travel redeemed through Chase Ultimate Rewards®
- 3X Points Reward: Earn 3 points per $1 on the first $150,000 spent on travel and select business categories each account anniversary year
- 1X Points Reward: Earn 1 point per $1 on all other purchases with no limit to the amount you can earn
- Points are worth 25% more when you redeem for travel through Chase Ultimate Rewards Redeem points for travel, cash back, gift cards and more
- No foreign transaction fees
- Employee cards at no additional cost
- $95 Annual Fee
Brex for Small Businesses
- Earn 25,000 in Brex Rewards points upon signup and waived card fees for life (equal to $250+ value)*
- Sign up in minutes for a business credit card with higher limits and no personal guarantee or security deposit
- 10-20x higher limits than traditional business credit cards while keeping your personal credit protected. 30-day payment cycle.
- Built-in expense management, automatic receipt-matching, and instant virtual cards for your team.
- QuickBooks, Xero, NetSuite, Concur, and Expensify integrations.
- To get approved you need $50,000 in your bank account if professionally invested, if not $100,000
- Classic rewards: 7x Rideshare, 4x Brex Travel, 3x Restaurants, 2x Recurring software, 1x Everything else
- New rewards for remote work: 7x Collaboration tools, 3x Food delivery, 2x Recurring software, 1x Everything else
- Get discounts on top services to run your company. Compared to an average of $500 in typical business credit card bonuses, Brex partner offers total $150,000 in value. Redeem anytime.
- Brex is available to corporations and other forms of non-individual liability companies. Brex underwrites with Employer Identification Numbers (EINs), not Social Security Numbers, so consumers, sole proprietors, and other unregistered businesses are ineligible. Only companies organized and registered in the United States (such as C-corps, S-corps, LLCs, or LLPs) may apply for a Brex account.
Cash Back Business Credit Cards
The Blue Business® Plus Credit Card from American Express
The The Blue Business® Plus Credit Card from American Express pays 2X Membership Rewards points on every purchase (up to an annual cap). The card is ideal for those who want flexibility in how they redeem their rewards.
- Earn 2X points on everyday business purchases such as office supplies or client dinners.
- 2X applies to the first $50,000 in purchases per year, 1 point per dollar thereafter.
- 0% intro APR on purchases for 12 months, then 13.24% - 19.24% Variable
- No Annual Fee
- Terms Apply (See Rates & Fees)
Chase Ink Business Unlimited
The third Chase Ink card is the Chase Ink Business Unlimited. It’s the newest business credit card in the lineup. It offers a welcome bonus worth $750 and 1.5% cash back, all with no annual fee. The Chase Ink Business Unlimited is an excellent card for business owners looking for cash rewards without the annual fee.
- Earn $750 bonus cash back after you spend $7,500 on purchases in the first 3 months
- Earn unlimited 1.5% cash back on every purchase
- 0% introductory APR for 12 months on purchases
- No Annual Fee
Capital One Spark Cash for Business
A low-fee card with good rewards, the Capital One Spark Cash for Business is a great general-purpose credit card for your small business. It offers a flat 2% cash back across all spending categories, which makes it excellent for everyday use. You won’t have to worry about which categories are earning you a bonus, or keep track of rotating categories.
If you’re interested in using a business credit card for its overall benefits, but you don’t want to play the credit card game of netting the best cash back benefits on individual categories, this is a great option.
- 2% Cash Back: Earn 2% cash back on all purchases. This is one of the few credit cards offering 2% in rewards
- Welcome Bonus: Earn $500 cash bonus after spending $4,500 on purchases within the first 3 months
- $0 intro annual fee for the first year; $95 after that
- Rewards won’t expire for the life of the account, and you can redeem your cash back for any amount
- Get employee cards at no additional cost, and earn rewards from their business spend
The Plum Card® from American Express
You can think of the The Plum Card® from American Express as a 1.5% cash back business card. You don’t get typical cash back rewards. Instead, you get a 1.5% discount when you pay early. You can also take up to 60 days to pay with no interest.
- Early Payoff Discount: Get a 1.5% discount when you pay early, with no cap on what you can earn back.
- Take up to 60 days to pay with no interest, if you pay your minimum due.
- Additional Employee Cards at no annual fee – and an early pay discount on employee spending.
- No Foreign Transaction Fees.
- Introductory annual fee of $0 for the first year, then $250
- Terms & Restrictions Apply. (See Rates & Fees)
Capital One Spark Cash Select for Business
The Capital One Spark Cash Select for Business is ideal for small business looking for a solid cash back offer with no annual fee. Add in the welcome bonus and this is one of the best no-fee business cards available today.
- Welcome Bonus: Earn 500 bonus miles after spending $4,500 within your first 3 months.
- Earning unlimited 1.5% cash back
- Save on interest with 0% intro APR on purchases for 9 months
- No annual fee
- Rewards won’t expire for the life of the account, and you can redeem your cash back for any amount
- Get employee cards at no additional cost, and earn rewards from their business spend
Capital One Spark Classic for Business
- No annual fee
- Earn 1% cash back on every purchase
- Build business credit with responsible use
- Fraud coverage
- No foreign transaction fees
- Year-End Summaries and employee cards at no extra cost
US Bank Business Cash Rewards World Elite Mastercard
- Limited Time Offer: Earn $500 cash back after spending $3,000 in the first 90 days of opening your account
- 3% Cash Back: Earn up to 3% cash back on eligible gas station, office supply store and cell phone/service provider net purchases.
- 1% Cash Back: Earn 1% cash back on all other eligible net purchases.
25% annual bonus based on your prior year’s cash rewards, up to $250. - 0% Intro APR* on balance transfers for 12 billing cycles. After that, a variable APR currently 13.99% – 22.99%.
- No annual fee
Travel Rewards Business Credit Cards
The Business Platinum Card from American Express
The The Business Platinum Card from American Express is one of the most rewarding business credit cards. It offers a generous welcome bonus and up to 5X Membership Rewards per dollar charged to the card.
- Welcome Offer: Earn up to 120,000 Membership Rewards® points after you spend $15,000 on qualifying purchases within your first 3 months of card membership.
- Rewards:
- Get 5X Membership Rewards points on flights and prepaid hotels on amextravel.com.
- Get 1.5X Membership Rewards points on eligible purchases in select business categories, as well as on purchases of $5,000 or more everywhere else. Keep in mind that spending caps apply.
- Statement Credits: The card offers more than $1,000 in value per year for statement credits on select purchases, including purchases from Dell Technologies, Indeed, Adobe and wireless telephone purchases. Enrollment required.
- $200 Airline Fee Credit: The credit can be applied toward toward baggage fees and more at one qualifying airline.
- $179 CLEAR Credit: Use your Card and get up to $179 back per year on your CLEAR membership.
- 0% APR: 0% Intro APR for 12 months from the date of the account opening on purchases eligible for Pay Over Time. After that, your APR will be 14.24% to 22.24% (as of ) based on your credit worthiness and other factors as determined at the time of account opening.
- Airport Lounge Access: Get access to more than 1,300 airport lounges with The American Express Global Lounge Collection.
- Annual Fee: ($695 if application is received on or after 01/13/2022)
- Terms Apply (See Rates & Fees)
American Express Business Gold Card
The American Express Business Gold Card is a lower cost and lower reward option to the Platinum card. Its list of rewards and benefits, however, is still impressive. You can earn 70,000 bonus miles if you meet the required spend, and it offers up to 4X rewards.
- Welcome Offer: Earn 70,000 bonus points after spending $10,000 within your first 3 months.
- $300 Statement Credit: Good on eligible U.S. advertising and U.S. shipping purchases. Terms and cap apply.
- REWARDS: Get 4X Membership Rewards® points on the 2 select categories where your business spent the most each month (applies to the first $150,000 in combined purchases from these 2 categories each calendar year).*
- BONUS: Get 25% points back after you use points for all or part of an eligible flight booked with Amex Travel, up to 250,000 points back per calendar year.*
- A flexible payment option to help manage cash flow on purchases of $100 or more.*
- Connect to Quickbooks, access SpendManager?, receive a Year-End Summary, and more.*
- Add EMPLOYEE CARDS with a no annual fee option. Earn rewards on employee purchases and track employee expenses with spending limits, alerts, and summary reports.*
- *Terms Apply (See Rates & Fees)
Capital One Spark Miles for Business
The Capital One Spark Miles for Business offers an excellent combination of welcome bonus and ongoing rewards. You can earn 2 miles for every dollar spent on the card and a 50,000 bonus miles (see spend requirement below). These miles are worth $500 in travel.
- Welcome Bonus: Earn 50,000 bonus miles after spending $4,500 on purchases within the first 3 months
- Earn 2 miles per $1 on every purchase
- $0 intro annual fee for the first year; $95 after that
- Transfer your miles to over 15 leading travel loyalty programs
- There’s no limit to the number of miles you can earn
- Redeem miles for travel, cash back, gift cards and more
- Get one statement credit for either the $85 TSA PreCheck application fee or the $100 Global Entry application fee
- No foreign transaction fees and fly on any airline, anytime, with no blackout dates or seat restrictions
Capital One Spark Miles Select for Business
- Welcome Bonus: Earn a one-time bonus of 20,000 miles once you spend $3,000 on purchases within 3 months from account opening
- Earn 1.5 miles per $1 on every purchase
- Save on interest with 0% intro APR on purchases for 9 months
- Pay no annual fee or foreign transaction fees
- There’s no limit to the amount of miles you can earn
- Fly on any airline, anytime, with no blackout dates or seat restrictions
Hotel Rewards Business Credit Cards
Marriott Bonvoy Business™ American Express® Card
The Marriott Bonvoy Business™ American Express® Card is ideal for businesses that frequent Marriott brand hotels. The card offers an excellent welcome bonus and up to 6X in rewards.
- Limited Time Offer: Earn 125,000 bonus Marriott Bonvoy points and 2 bonus Free Night Awards after spending $5,000 within the first 3 months. Each bonus Free Night Award has a redemption level up to 50K points. Certain hotels have resort fees. Offer ends 11/3/2021.
- Earn up to $150 back in the form of statement credits on eligible purchases within the first 3 months of card membership.
- Earn 6x points at participating Marriott Bonvoy hotels
- Earn 4x points at U.S. restaurants, U.S. gas stations, U.S. purchases on shipping, and wireless telephone services purchased from U.S. service providers
- Earn 2x points on all other eligible purchases
- Receive 1 Free Night Award each year after your Card account anniversary you can use at a participating hotel.
- Enjoy complimentary Marriott Bonvoy Silver Elite status.
- Earn Gold Elite status after spending $35,000 on eligible purchases on your card in a calendar year.
- Annual fee is $125
- Terms Apply (See Rates & Fees)
Hilton Honors American Express Business Card
The Hilton Honors American Express Business Card is the business card for those who stay at Hilton brand hotels. It offers a generous welcome bonus and up to 12X in rewards on purchases.
- Welcome Offer: Earn 130,000 Hilton Honors Bonus Points after you spend $2,000 in purchases on the Card in the first 3 months of Card Membership. Plus, you can earn an additional 50,000 Hilton Honors Bonus Points after you spend a total of $10,000 in purchases on the Card in the first 6 months.
- Earn 12X at hotels and resorts in the Hilton portfolio
- Earn 6X on Select Business & Travel Purchases
- Earn 3X Everywhere Else. Terms & Limitations Apply.
- Enjoy complimentary Hilton Honors Gold status with your Hilton Honors Business Card.
- Earn a Weekend Night Reward from Hilton Honors after you spend $15,000 in purchases on your card in a calendar year.
- Earn another Weekend Night Reward from Hilton Honors after you spend an additional $45,000 in purchases on your card in the same calendar year.
- Terms apply. (See Rates & Fees)
Airline Business Cards
Southwest Airlines Business Credit Cards
There are two Southwest Airlines business credit cards:
- Southwest Rapid Rewards Premier Business Credit Card
- Southwest Rapid Rewards Performance Business Credit Card
They are both great cards. One comes with an annual fee and higher rewards, the other with no annual fees and slightly lower rewards.
Southwest Rapid Rewards Premier Business Credit Card
- Limited Time Offer: Earn 60,000 points after you spend $3,000 on purchases in the first 3 months your account is open.
- Annual Bonus: Earn 6,000 bonus points after your Cardmember anniversary.
- 2X Rewards: Earn 2 points per $1 spent on Southwest® purchases and Rapid Rewards® hotel and car rental partner purchases.
- 1X Rewards: Earn 1 point per $1 spent on all other purchases.
- Earn points on employee spending
- No blackout dates when you redeem points, no seat restrictions, bags fly free®, and no change fees
- No foreign transaction fees
Southwest Rapid Rewards Performance Business Credit Card
- Welcome Offer: Earn 80,000 points after you spend $5,000 on purchases in the first 3 months your account is open.
- Second Bonus: Earn 9,000 bonus points after your Cardmember anniversary.
- 3x Rewards: 3 points per $1 spent on Southwest Airlines® purchases.
- 2x Rewards: 2 points per $1 spent on social media and search engine advertising, Internet, cable and phone services. Perfect for online entrepreneurs.
- 1x Rewards: 1 point per $1 spent on all other purchases.
- 4 Upgraded Boardings per year when available
- Inflight WiFi Credits
- Global Entry or TSA Pre?® Fee Credit
- Employee cards at no additional cost, earn points on employee spending.
- $199 Annual Fee
Delta Airlines Business Credit Cards
Delta offers three business credit cards:
- Delta SkyMiles Gold Business American Express card
- Delta SkyMiles Platinum Business American Express Card
- Delta SkyMiles Reserve Business American Express Card
As is standard, the cards vary in annual fee and rewards–the higher the annual fee, the better the rewards.
Delta SkyMiles Gold Business American Express card
- Welcome Bonus: Earn 70,000 bonus miles and a $50 statement credit after spending $2,000 within your first 3 months.
- After you spend $10,000 in purchases on your Card in a calendar year, you will earn a $100 Delta Flight Credit to use toward future travel.
- Rewards: Earn 2 Miles on every dollar spent on eligible purchases made directly with Delta, U.S. purchases for advertising in select media, U.S. shipping purchases, and on dining at restaurants. Earn 1 mile on every eligible dollar spent on purchases.
- Enjoy Main Cabin 1 Priority Boarding
- No foreign transaction fees when you spend overseas.
- $0 introductory annual fee for the first year, then $99.
- Terms and limitations apply (See Rates & Fees)
Delta SkyMiles Platinum Business American Express Card
- Welcome Offer: Earn 90,000 bonus miles and a $100 statement credit after spending $3,000 within your first 3 months months. Offer ends 4/28/2021
- Rewards:
- Earn 3 Miles per dollar spent on purchases made directly with Delta.
- Earn 1 mile on every eligible dollar spent on purchases.
- Check your first bag for free.
- Priority Boarding.
- Miles don’t expire.
- With Status Boost, earn 10,000 Medallion(R) Qualification Miles (MQMs) after you spend $25,000 in purchases on your card in a calendar year, up to 2x per year getting you closer to Medallion Status.
- Throughout 2021 earn an additional 2,500 MQMs after making $25,000 in purchases, up to 2x. That’s in addition to the 10,000 MQMs that you would earn with Status Boost.
- $250 annual fee
- Terms and limitations apply. (See Rates & Fees)
Delta SkyMiles Reserve Business American Express Card
The Delta SkyMiles Reserve Business American Express Card offers one of the best ways to earn bonus Delta SkyMiles. If your business is a frequent Delta flyer, this card is a must.
- Earn 60,000 bonus miles, 20,000 Medallion(R) Qualification Miles (MQMs) and a $200 statement credit after you spend $4,000 in purchases on your new card in your first 3 months.
- Earn 15,000 Medallion( Qualification Miles (MQMs) after you spend $30,000 in purchases on your Card in a calendar year, up to 4x per year getting you closer to Medallion Status. Plus, throughout 2021 earn an additional 3,750 MQMs after making $30,000 in purchases, up to 4x. That’s in addition to the 15,000 MQMs that you would earn with Status Boost.
- When you purchase a Delta flight with your Delta SkyMiles Reserve Card, you will receive complimentary access to The Centurion(R) Lounge or Escape Lounge – The Centurion(R) Studio Partner.
- After you spend $150,000 on your Card in a calendar year, you earn 1.5 Miles per dollar (that’s an extra half mile per dollar) on eligible purchases the rest of the year. If your purchase qualifies for a category that has a higher mileage accelerator, only the higher accelerator will apply (ex: you would earn 3X miles on purchases made directly with Delta instead of 1.5X).
- Pay no foreign transaction fees when you spend overseas.
- Earn 3 Miles on every dollar spent on eligible purchases made directly with Delta.Terms and limitations apply. (See Rates & Fees)
United Airlines Business Credit Cards
United Business Card
The United Business Card offers United frequent flyers an excellent welcome bonus, travel credits and up to 2 miles per $1 spent on the card.
- Earn 75,000 bonus miles after spending $5,000 in the first 6 months. Here’s how it works–Earn 75,000 miles after you spend $5,000 on purchases in the first 3 months your account is open. Earn an additional 75,000 miles after you spend $20,000 total in the first 6 months.
- Earn a $100 United travel credit after 7 flight purchases of $100 or more each anniversary year.
- 5,000 mile “better together” anniversary bonus when you have two United credit cards–the United Business Card and a personal Chase United credit card
- Earn 2 miles per $1 spent on United purchases, at gas stations, dining and office supply stores, and local transit and commuting.
- Earn 1 mile per $1 spent on all other purchases.
- No foreign transaction fees
- Enjoy a free first checked bag – a savings of up to $140 per roundtrip (terms apply), 2 United ClubSM one-time passes per year, and priority boarding privileges.
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for one year with DashPass, DoorDash’s membership service. Activate by 12/31/21.
- $0 introductory annual fee for the first year, then $99.
Choosing the Best Card for Your Business
These are just the top business credit cards of 2021 as we see them. We’ve vetted most of the major players available right now, and these cards offer plenty of variety for different types of businesses. However, choosing between them can be difficult.
When you’re looking at this – or any – list of business credit card options, it’s important to consider your business’s actual spending and expected spending for the coming year. If you don’t spend enough to justify a high annual fee, cross those cards off the list. Also, if you’re looking to finance a big-ticket purchase, check out the cards with the 0% introductory APR option.
Each of these cards has unique perks and benefits. The key is to ensure that those benefits line up with your current and future business spending.
Business Credit Card FAQs
When it comes to business credit cards, you might have a few questions. Here are five that we get most frequently:
The short answer here is no. Business credit cards aren’t protected by federal laws like the Credit CARD Act of 2009, most of the time. This means that your APR can change without notice, and there are fewer limits on fees you can be charged. Fraud protection is also not as strong with business credit cards.
With that said, credit card companies want your business, so many have individual protections written into their business credit card contracts. It’s up to you to be informed about potential fees, fraud protection, and other issues with your business card. Look closely at the fine print before you sign up for a card, as protections vary from company to company.
There are two major differences between credit cards and charge cards. Charge cards, unlike credit cards, don’t have a credit limit. However, they also have to be paid in full at the end of the month, or you’ll incur a large penalty fee. With a charge card, you have to plan spending more carefully, and keep closer track of your cash flow.
Charge cards do offer some of the same cash back and travel benefits as credit cards, though many come with annual fees.
Paying off all of your credit card balances each monthis a good habit for any business owner. But the inability to carry balances over from month to month at all can be prohibitive for some. If you ever suffer a tight month and can’t pay your balance in full, you’ll already have been hit with penalty fees, even if you catch up the next month.
For many business owners, it’s better to use a credit card.
You can use your federal EIN – employer identification number – to apply for a business credit card, but you don’t have to. Many solopreneurs never get an EIN simply because they don’t need it. If you’re on your own and use your own social security number for other aspects of your business, you can just use that when applying for a business credit card.
Even if you do have an EIN, you may not be able to use it when first applying for a business card. The credit card company can only pull your business’s credit if your business has its own credit file as an entity separate from your personal credit file. If you’re just getting started, you’ll need time to build up your business’s credit file, which is part of the point of using a business credit card.
If you have an EIN but don’t have a credit file associated with it, the credit issuer will simply pull credit based on your social security number.
The answer to the above FAQ should tell you this! The answer is yes, most of the time. This is especially true at first, when your business doesn’t have its own credit file, or doesn’t have a large enough history for a credit issuer to make a decision. Again, you can enter your EIN instead of your personal social security number. But if the business doesn’t have an adequate credit file for a decision to be made, you’ll see a hard inquiry on your personal credit file.
With that said, other business card owners have noticed that after the original inquiry, the business credit card may not be counted in your personal credit file, unless there’s a major negative to report. Once the account is up and running, most of the credit-building properties will be counted towards your business’s credit, rather than your personal credit.
With all this in mind, it’s important to take care in your business transactions, just as you would your personal interactions. Though you and your business are technically separate, there’s so much interlinking in the world of financial transactions that credit issues in either sphere can impact the other.
Depending on the credit card issuer and the arrangement you sign, you may be 100% liable for the credit card’s balance. Most of the time, a credit card issuer will insist that you sign a personal guarantee. This is an agreement you make with your creditor to pay for your business’s debts if your company doesn’t. It’s almost like cosigning for yourself. If your business can’t keep up with the debts, you’ll have to pay them back personally – even if you are the sole owner and operator of the entire business.
Due to personal guarantees, creditors could go after your personal assets if you default on the loan. Even if your company is an S-corporation or Limited Liability Company, you could be on the hook personally for business credit card debts. Limited liability company and corporation classifications shield your personal assets from certain liability situations. But when you willingly enter into a credit card arrangement and willingly make spending choices, you’re still personally liable for the debt.
If you get to the point where your business is more established and has deep pockets and a long credit history, you may be able to get business loans and credit cards with commercial liability. Then, the creditor couldn’t pursue your personal assets in case of failure to pay. However, most small businesses don’t have this option, and especially not when they’re just beginning to apply for business credit.
Managing Business Expenses with a Credit Card
Managing business expenses with a credit card is similar to managing personal expenses using a credit card. But there are a few additional rules. Here are my personal rules for using a business credit card, which are easy to apply to any business model:
Rule 1: Pay the balance in full each month
To get the most out of your business credit card and keep your expenses in check, pay off the full balance of your business credit card each month. This means keeping careful track of your expenses and your cash flow to ensure you’re not overspending.
One potential exception to this rule is to use a 0% introductory APR deal to make a large purchase for your business. Only do this if it’s necessary, and if taking the time to save up for the one-off purchase would cost your business more in the long run. Then, budget carefully to ensure you can pay off the balance in full before your APR goes up.
Rule 2: Link the card to your accounting software
One of the key reasons I use a business credit card is to make tracking business expenses easier. Yes, you can do this by just looking over your credit card statements monthly. But you can also automate the process by simply linking your credit card to your favorite accounting software.
I link my business credit card to Quickbooks Online. It automatically downloads the transactions as they occur. My bookkeeper then categorizes the transactions at the end of the month.
Rule 3: Use the card only for business expenses
This is an essential rule: don’t ever use this credit card for personal expenses. This will only get you into trouble, especially if this turns into a habit. It’s much easier to keep your expenses separate and easy-to-track by using your business card only ever for business expenses.
Rule 4: Keep your receipts
Even if you have your credit card log, keeping your receipts is essential. The IRS says to keep business receipts for purchases and expenses for at least four years. Keep a file – both digital and hard copy – to keep your receipts organized by date. And if some of your receipts are for expenses that could potentially be questioned, like restaurant expenses, jot down a note on the receipt or in its digital file about the business occasion that led to the expense.
Basics of Business Credit Card Rewards
As you can see from our list of the best business cards above, many come with a variety of rewards. The most popular options, however, are cash back and miles rewards. You can also get purchase rewards, too, though, which give you access to gift cards and other useful items. Understanding rewards and how to use them is a key piece of choosing the best credit card for your business.
Rewards
One mistake business owners often make is choosing a business card that has a great rewards system, but they’re awarded in a way that they won’t use. So as you consider different credit card options for your business, take the time to understand how rewards are earned, and think through how you’d redeem those rewards.
We’ll discuss the most common options, and the best ways to use those rewards:
- Travel Rewards: Travel rewards come in various flavors. Some travel cards let you rack up points to use for any travel-related purchase–from hotel stays to airline tickets to rental cars. Others only allow you to redeem points with certain providers. If you travel often for business and don’t mind always booking with the same airline or hotel chain, a brand-specific card might work for you. But if you’d rather get the best possible deal on flights and hotels, look for a card with more flexible redemption policies.
- Purchase Rewards: Some business rewards cards offer purchase rewards options. For instance, with the Chase cards listed above, you can choose to redeem your rewards in several ways. For instance, you can purchase gift cards to various retailers, shop on Amazon.com directly with your points, or redeem rewards for special experiences. Purchase rewards can be more limited, but can be a way to buy customer and employee appreciation gifts. You can also order necessary office supplies using gift cards or Amazon.com points.
- Cash Back Rewards: Cash back rewards are perhaps the easiest to use. This is my approach. Most major credit card companies will allow you to put cash back rewards directly towards your credit card balance. Most card companies will transfer cash back rewards transferred directly to your bank account.
- Sign-Up Bonuses: When considering signing up for a new credit card, be sure you check out the sign-up bonuses. These bonuses give you extra spending power or even airline tickets right after you sign up for the new card. While you don’t want to choose a credit card based solely on a one-time bonus, it’s certainly something to take into consideration when choosing a credit card.
Interest Rates
You should consider a business credit card’s interest rate if you carry a balance. Should you need to carry a balance, the lower your interest rate, the better off you’ll be. When choosing a credit card for your business, here are three types of interest rates to consider:
- 0% Balance Transfers: Are you already trying to pay down some business debt you’ve let pile up? Look for a card with a 0% introductory interest rate on balance transfers. This is a way to save money while you pay down the debt as quickly as you can. Just be sure you don’t use a balance transfer offer to put personal debt onto your business credit card. To pay off personal debt more quickly, check out this list of 0% APR balance transfer credit cards.
- 0% on Purchases: Again, we don’t recommend regularly carrying a balance on your business credit card. However, if you need to make a one-time purchase of a big-ticket item, a 0% introductory APR may be the way to go. As long as you can pay down the balance before the 0% APR runs out, you can pay no interest on your large purchase. Just be sure you read the card’s fine print. Many will end the deal and hike up your interest rate if you’re even a day late on a single payment.
- Regular APR: You’ll find a credit card’s regular APR in the fine print. These APRs are often listed as variable. The better your credit score, the lower your APR will be. If you don’t ever carry a balance, the regular APR won’t matter much in your budget. But it’s still important to know your APR before signing up for a credit card.
How to Apply for a Small Business Credit Card
Applying for a business credit card is similar to applying for a personal credit card, with a few differences. Here’s how to get started:
- Decide whether to apply for an EIN. If you don’t already have an employer identification number (EIN), consider whether you should apply for one. It’s free to do, and is fairly simple to do online at the IRS website. If at any point you’re likely to hire employees, go ahead and apply. If you plan to keep your business to just yourself and, perhaps, your spouse, you can apply for business credit under your social security number.
- Check your business credit file. If your business has been around for a while, it may already have a credit file. You can check on that here. If your business has a credit file, skip to step four. If not, take step three first.
- Apply for a D-U-N-S number. This is a unique business identification number, separate from your EIN. You can actually apply for this number, and then add or change information in it on the Dun & Bradstreet site, linked above. When you first establish your business credit file, creditors will still pull your personal credit file first to check for creditworthiness.
- Apply for a small business credit card. Business credit card applications are similar to personal credit card applications. You’ll just need to fill out all the requested information. Even if you provide an EIN, most creditors will ask for your social security number as part of your personal guarantee. Remember, this makes you personally liable for your business’s debts, which gives you even more reason to be cautious with your credit card spending.
- Build your business’s credit. As when applying for a personal credit card, you may start off with a relatively low credit limit. You can build up your business’s credit by paying bills on time, keeping your credit card balance low, and keeping a long credit history. You can continue to visit the Dun & Bradstreet website to see your progress with your business’s credit.
- Ask for a credit limit increase, eventually. If you may need to apply for a large business loan in the future, you would do well to continue building your credit by eventually asking for a credit limit increase. Remember, a large portion of your business’s credit rating comes down to debt vs. credit. The more credit you have available, the higher your rating. Once you’ve used a credit card wisely, you can ask for a credit limit increase.
