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The best business credit cards serve as essential financial tools, significantly influencing cash flow, expense tracking, rewards accrual, and the establishment of a robust business credit profile. Finding the right card for your business delivers a powerful financial asset with benefits such as superior cash flow control, efficient expense tracking, rewarding reward systems, and the facilitation of a robust business credit profile. From burgeoning startups to established enterprises, identifying and leveraging the unique advantages of these premier business credit cards can be a game-changer, significantly enhancing financial stability and fostering growth.
Best Business Credit Cards in August 2023
The right business credit card card can elevate a business's financial operations, providing benefits from improved cash flow to robust reward programs. Emerging startups and established corporations can tap into these top-tier business credit cards to revolutionize their financial landscape, driving stability and promoting growth. Here are MoneyGeek's picks for the best business credit cards.
Why You Can Trust Our List
- The Blue Business® Plus Credit Card from American Express
Best for 0% APR on purchases
- up to 2X Membership Rewards® pointsRewards Rate
- 18.49% – 26.49% VariableAPR
- $0Annual Fee
- Good–ExcellentRecommended Credit
- American Express Blue Business Cash™ Card
Best for 2% cash back with no annual fee
- 1–2% Cash Back*Rewards Rate
- 18.49% – 26.49% VariableAPR
- $0Annual Fee
- Good–ExcellentRecommended Credit
- Capital One Spark Miles for Business
Best for entry-level rewards on travel
- 2 Miles per $1Rewards Rate
- 26.24% VariableAPR
- $95 ($0 first year)Annual Fee
- Good–ExcellentRecommended Credit
- Capital One Spark Cash Plus
Best charge card with cash back
- 2% Cash BackRewards Rate
- None (charge card)APR
- $150Annual Fee
- ExcellentRecommended Credit
- Ink Business Unlimited® Credit Card
Best welcome offer with no annual fee
- 1.5% Cash BackRewards Rate
- 18.49% – 24.49% VariableAPR
- $0Annual Fee
- Good–ExcellentRecommended Credit
- The Business Platinum Card® from American Express
Best for premium travel
- 1–5 Points per $1*Rewards Rate
- 19.49% – 27.49% VariableAPR
- $695Annual Fee
- Good–ExcellentRecommended Credit
- Marriott Bonvoy Business® American Express® Card
Best for Marriott Bonvoy loyalists
- 2–6 Points per $1*Rewards Rate
- 20.99% – 29.99% VariableAPR
- $125Annual Fee
- Good–ExcellentRecommended Credit
- Ink Business Cash® Credit Card
Best for rewards on office supplies
- 1–5% Cash Back*Rewards Rate
- 18.49% – 24.49% VariableAPR
- $0Annual Fee
- Good–ExcellentRecommended Credit
- American Express® Business Gold Card
Best for customized rewards categories
- 1–4 Points per $1Rewards Rate
- 19.49% – 27.49% VariableAPR
- $295Annual Fee
- Good–ExcellentRecommended Credit
- The Hilton Honors American Express Business Card
Best for Hilton loyalists
- 3–12 Points per $1*Rewards Rate
- 20.99% – 29.99% VariableAPR
- $95Annual Fee
- Good–ExcellentRecommended Credit
- United℠ Business Card
Solid travel card for United fans
- 1–2 Miles per $1*Rewards Rate
- 21.74%–28.74% VariableAPR
- $99 ($0 intro annual fee for the first year)Annual Fee
- Good–ExcellentRecommended Credit
- World of Hyatt Business Credit Card
Lucrative rewards for World of Hyatt members
- 1–9 PointsRewards Rate
- 21.49% – 28.49% VariableAPR
- $199Annual Fee
- Good–ExcellentRecommended Credit
- Ink Business Preferred® Credit Card
Great for big welcome offer and ongoing rewards
- 1–3 Points per $1Rewards Rate
- 21.24% – 26.24% VariableAPR
- $95Annual Fee
- Good–ExcellentRecommended Credit
What Is a Business Credit Card?
A business credit card is a financing tool designed specifically for business use. It functions much like a personal credit card, allowing users to make purchases up to a specified limit. However, it comes with features and benefits tailored to meet the needs of businesses, such as higher credit limits, business-focused rewards programs, and expense management tools.
You can use a business credit card to manage cash flow, track expenses, earn rewards, and even build a business credit profile. They are typically issued in the business's name and, in many cases, require a personal guarantee from the business owner or principal.
Business Credit Cards vs. Personal Credit Cards
Next, let's differentiate business credit cards from personal credit cards to understand the unique advantages they offer to businesses. While business and personal credit cards function similarly, there are key differences:
- Usage: Business credit cards are intended solely for business expenses, whereas personal credit cards are for personal expenses. Keeping these expenses separate simplifies bookkeeping and tax preparation.
- Credit Limit: Business credit cards generally have higher credit limits than personal cards, accommodating the higher expenses that businesses typically incur.
- Rewards and Benefits: The rewards and benefits of business credit cards are often geared towards common business expenses (like travel or office supplies). They also often include tools for tracking and categorizing expenses, something rarely found on personal cards.
- Credit Reporting: Business credit card activity is usually reported to business credit bureaus, and responsible usage can help build a business credit profile. However, in some cases, especially if the card requires a personal guarantee, this activity can also be reported to personal credit bureaus.
- Liability: In most cases, the business is the primary debtor for a business credit card. However, many cards require a personal guarantee, meaning the individual providing that guarantee can also be held personally responsible for the debt.
MONEYGEEK EXPERT TIP
Your business's credit score plays a significant role in securing future financing and is built through consistent, responsible credit use. Even when you can afford to pay for a purchase upfront, consider using your business credit card and then settling the bill promptly. This approach helps establish a positive payment history, which is beneficial for credit building.
Benefits of Business Credit Cards
Business credit cards provide a myriad of benefits for business owners, from cash flow management to building business credit. Here are some primary benefits:
Cash Flow Management
Business credit cards can be an effective tool to manage cash flow. They allow businesses to make necessary purchases or pay for services immediately and pay off the debt later, thus providing flexibility in managing income and expenditure. This is particularly beneficial during periods when revenue might be slower to come in, but expenses still need to be paid. The grace period between when purchases are made and when the payment is due can act as a short-term, interest-free loan for your business.
Expense Tracking
These cards often come with expense management tools that allow business owners to categorize and track spending. This makes managing budgets and preparing for tax filing easier, as the account provides a consolidated record of business expenses. Most business credit cards also provide year-end summaries that break down your spending by category, making reviewing and managing your expenses even easier.
Reward Programs
Many business credit cards offer reward programs, which might include cash back, points, or travel miles. This provides additional value to businesses. For example, you could use these rewards to offset business travel costs or reinvest them into your business to purchase supplies or other necessities. Some cards even offer specific rewards for business-related categories such as office supply stores or telecommunications services.
Building Business Credit
Regular, responsible use of a business credit card can help establish and improve a business's credit profile. This can prove beneficial for securing larger loans or lines of credit in the future. A good business credit score can lead to lower insurance premiums, better terms with suppliers, and more favorable credit terms.
Drawbacks of Business Credit Cards
Despite their benefits, business credit cards do come with potential drawbacks. This section discusses a few of those:
High Interest Rates
Business credit cards can have high interest rates, especially for businesses with a short credit history or lower credit scores. If the balance is not paid off promptly, these interest rates can translate into significant costs.
Complex Fee Structures
Some cards come with complex fee structures that can include annual fees, late payment fees, foreign transaction fees, and cash advance fees, among others. It's important to read the fine print and understand all potential costs associated with the card.
Potential Impact on Personal Credit
Depending on the card issuer's policies, your business credit card usage could impact your personal credit report. This is especially true if you provide a personal guarantee when you apply. For instance, if the business fails to make payments, this could affect your personal credit score, making it harder for you to secure credit in the future.
MONEYGEEK EXPERT TIP
Businesses need to fully understand the true cost of using a business credit card. High-interest rates and complex fee structures can quickly offset any benefits gained from reward programs. It's crucial to examine all terms and conditions thoroughly. If the costs are beyond the business's financial capacity, it might be best to explore other financing options.
Applying for a Business Credit Card
Here are some steps to consider when applying for a business credit card, from understanding your needs to responsible usage.
1
Evaluate Your Needs
If you’ve already been in business for a while, go through statements from your business checking account or other credit cards to see which expenses regularly come up and how much you usually spend each month. This can help you choose a rewards program to maximize those expenses. If your business has employees, you may want to give them access to the line of credit so they can make business-related purchases and earn rewards for the account. Check whether the credit card issuer offers employees cards, charges a fee for them or allows you to set spending limits on each card.
2
Compare Offers
Look at different card offers, comparing interest rates, rewards programs, and fee structures. Make sure to consider the card's terms and conditions. Look for other fees you might have to pay and any features that come with the card. Then consider how it will impact your business. For example, a card that charges foreign transaction fees may be a poor choice if you frequently travel overseas or make purchases with foreign suppliers. Many business credit cards come with sign-up bonuses, but you might need to spend a certain amount to earn them. Make sure you can receive the bonus without overspending.
3
Application Process
Most business credit cards require an Employer Identification Number (EIN), but sole proprietors can often apply with their Social Security number. Be prepared to provide business and personal financial information. This may include your business's revenue and profit numbers as well as your personal income. Once you submit an application, you might find out right away whether you’ve been approved or declined. If approved, you’ll receive a copy of the credit card in the mail within a week or two. The process might slow down if the card issuer requests extra documentation or asks questions about the information you provided.
4
Use Your Card Responsibly
Once approved, start using your card for business expenses. Aim to pay off the balance in full each month to avoid interest charges and build your business credit history.
Should You Get a Business Credit Card?
Business credit cards are not a one-size-fits-all solution, and their worth can fluctuate between different businesses. Thus, understanding the specifics of each card offer and your business needs is key to making the most of this financial tool.
Business credit cards are a powerful ally in a company's financial arsenal, offering benefits ranging from efficient cash flow management to seamless expense tracking, generous rewards programs, and business credit profile building. However, their value isn't universal. For many, the decision rests on their business's financial health, spending habits, and long-term goals. A card's worth extends beyond its face value and hinges on the extent to which its advantages can be exploited.
Who Should Consider a Business Credit Card?
- You want to separate personal and business finances: Using a business credit card can simplify record-keeping and provide a clearer picture of business expenses.
- You spend a lot on travel or specific spending categories: If your business spends heavily in specific areas, such as travel or office supplies, selecting a card with rewards in these categories can provide significant benefits.
- You want to build business credit: A business credit card can be an effective tool for new businesses or those looking to build their credit profile. Each time you use your card responsibly and pay your bills on time, this information is reported to business credit bureaus, helping to build your credit score.
Who Should Avoid a Business Credit Card?
- You can't pay off the balance each month: The high interest rates on business credit cards can quickly accumulate, making them an expensive option for long-term borrowing.
- You have poor personal credit: If your personal credit is poor, it may be difficult to secure a business credit card, and the terms may not be favorable.
- You want to avoid a personal guarantee: Many business credit cards (although not all) require a personal guarantee, which could put your personal assets at risk.
Alternatives to a Business Credit Card
If a business credit card isn't the right fit, there are other financial instruments that can meet your business needs. Here are a few alternatives:
Business Loans: A business loan may be a better option for larger, long-term financing needs. Interest rates can be lower, and loan terms are often longer. However, business loans may require more paperwork and have stricter approval processes than business credit cards.
Invoice Factoring: Businesses that invoice their clients might consider invoice factoring. This is a way to receive immediate payment for outstanding invoices at a discounted rate. However, the discount rates and fees can sometimes make this a costly option.
Trade Credit: Trade credit can be an effective tool for managing cash flow without using credit cards or loans. This is essentially a credit agreement between businesses where goods or services are provided in return for payment at a later date.
Business Lines of Credit: A business line of credit offers flexibility that a regular business loan doesn't. You can draw from your line of credit as needed, up to the limit, and you only pay interest on the amount you've borrowed.
Equipment Leasing: If a large portion of your expenses goes towards equipment, leasing could be a more cost-effective alternative than purchasing outright or financing through a credit card.
Personal Credit Cards: For small businesses and sole proprietors, using a personal credit card might make sense, especially if the business credit card offers are not attractive. But remember that it may be harder to separate business and personal expenses when tax time comes.
Summary
In the world of commerce, financial agility and strategic decision-making often dictate a business's success trajectory. To this end, financial tools like business credit cards are pivotal in navigating the commercial landscape. A business credit card is not just a method of payment but a robust financial instrument that offers advantages such as cash flow management, expense tracking, rewards, and the building of a solid business credit profile.
Expert Advice & FAQs About Business Credit Cards
We’ve got answers to some of the most critical questions about business credit and using business credit cards:
Tips From The Pros: Finding & Using the Right Business Credit Card
- With fewer protections and higher interest rates than consumer cards, is it truly worth it for a small business to have and use a business card versus a personal one for business expenses?
- Should all small business owners or self-employed individuals have a business credit card for expenses? If not, which businesses benefit most from having a business card?
- What are some ways business owners can appropriately use their credit cards to build credit and stay out of debt?
- When does it make sense to get a travel business credit card with a steep annual fee?
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*Rates, fees or bonuses may vary or include specific stipulations. The content on this page is accurate as of the posting/last updated date; however, some of the offers mentioned may have expired. We recommend visiting the card issuer’s website for the most up-to-date information available.
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Advertiser Disclosure: MoneyGeek has partnered with CardRatings.com and CreditCards.com for our coverage of credit card products. MoneyGeek, CardRatings and CreditCards.com may receive a commission from card issuers. To ensure thorough comparisons and reviews, MoneyGeek features products from both paid partners and unaffiliated card issuers that are not paid partners.