In today's business landscape, credit cards have evolved into indispensable tools for businesses of all sizes. They provide the convenience of managing purchases and cash flow, often accompanied by a range of advantages that can enhance savings and streamline operations for business owners.
Business credit cards play a crucial role for small business proprietors, offering a spectrum of rewards, benefits, and perks that aid in financial management and business expansion. Among the most popular options today are the Chase Ink Business Preferred and the American Express Business Gold Card. In this article, we will closely examine the distinct features, advantages, and potential drawbacks of each, empowering you to select the one that aligns best with your business's needs.
Nevertheless, not all credit cards are equal, and discerning which ones provide the optimal value for your business can be challenging. In this blog post, we will showcase some of the top business credit cards currently available, along with their respective features and benefits.
Best Business Credit Cards
1. Chase Ink Business Preferred
The Chase Ink Business Preferred card stands as a favored choice among business proprietors, owing to its robust rewards program and valuable perks. Cardholders accumulate three points per dollar on the first $150,000 spent annually on travel, shipping, internet, cable and phone services, as well as advertising purchases made through social media platforms and search engines. All other purchases earn one point per dollar. These points can be redeemed for travel, cashback, gift cards, or transferred to participating travel loyalty programs at a 1:1 ratio.
This card also offers an array of travel and purchase protection benefits, encompassing trip cancellation/interruption insurance, primary car rental insurance, and purchase protection for up to 120 days post-purchase.
The Chase Ink Business Preferred caters to small business owners aiming to maximize rewards and spending. Here are some key features and benefits:
Rewards: The card provides 3x points per dollar on travel, shipping, internet, cable, and phone services, as well as advertising purchases on social media sites and search engines, up to a maximum of $150,000 in combined purchases annually. All other purchases earn 1x points per dollar. Points can be redeemed for travel, cash back, or transferred to partner airline and hotel loyalty programs.
Sign-up bonus: An impressive sign-up bonus of 100,000 points awaits after spending $15,000 on purchases within the first 3 months of account opening, one of the most substantial bonuses available on a business credit card.
Annual fee: The annual fee for the Chase Ink Business Preferred is $95.
Additional benefits: The card encompasses supplementary advantages, including travel and purchase protection, employee cards with individual spending limits, and no foreign transaction fees.
Drawbacks: The primary drawback of the Chase Ink Business Preferred is the $95 annual fee, which might present a barrier for some small business owners. Additionally, the 3x points categories may not align with the spending habits of all businesses.
2. American Express Business Gold Card
The American Express Business Gold Card offers a premium option for business owners seeking rewards across a spectrum of purchases. Cardholders earn 4 Membership Rewards points per $1 spent on the two categories where the business spends the most each billing cycle (up to the first $150,000 in combined purchases each calendar year), and 1 point per $1 spent on all other purchases.
This card also extends a welcome offer of 70,000 Membership Rewards points following $10,000 in spending within the initial 3 months of account opening. Additionally, up to $300 in statement credits each year is available for eligible purchases at Dell Technologies, DocuSign, and FedEx.
Though the card carries a $295 annual fee, this can often be offset by the benefits offered. Cardholders gain access to the American Express Global Lounge Collection, which encompasses over 1,200 airport lounges worldwide. Additionally, a $100 airline fee credit per calendar year is granted for incidental fees like baggage and in-flight purchases. Lastly, employee cards can be added without charge.
3. Capital One Spark Cash for Business
The Capital One Spark Cash for Business card is an excellent choice for businesses seeking a simple, straightforward rewards program. Cardholders earn unlimited 2% cash back on all purchases, simplifying the process of earning rewards without the need to track spending in specific categories.
In addition to the cash back rewards, the card extends a range of valuable benefits, including complimentary employee cards, purchase protection, and extended warranty coverage. The American Express Business Gold Card is another premium business credit card that offers a variety of rewards and benefits. Here are some of the key features and benefits of this card:
Rewards: The American Express Business Gold Card offers 4x points per dollar spent on the two categories where your business spends the most each billing cycle, up to a maximum of $150,000 in combined purchases per year. You'll earn 1x points per dollar spent on all other purchases. Points can be redeemed for travel, cash back, or transferred to partner airline and hotel loyalty programs.
Sign-up bonus: The American Express Business Gold Card offers a sign-up bonus of 70,000 Membership Rewards points after you spend $10,000 on purchases in the first 3 months from account opening.
Annual fee: The annual fee for the American Express Business Gold Card is $295.
Additional benefits: This card also comes with additional benefits, including travel and purchase protection, employee cards with individual spending limits, and no foreign transaction fees.
Drawbacks: The main drawback of the American Express Business Gold Card is the high annual fee, which may be a barrier for some small business owners. Additionally, the 4x points categories may not be the most relevant for all businesses, depending on their spending habits.
4. Bank of America Business Advantage Cash Rewards Mastercard
The Bank of America Business Advantage Cash Rewards Mastercard presents a compelling option for business proprietors seeking cash back on their purchases. This card offers 3% cash back in a chosen category, including gas stations, office supply stores, travel, TV/telecom & wireless, computer services or business consulting services. Additionally, you earn 2% cash back at restaurants and 1% cash back on all other purchases. There's no limit on the cash back you can earn, and the rewards never expire.
In addition to the cash back rewards, this card extends a $300 statement credit when you make at least $3,000 in purchases within the first 90 days of opening your account. There is no annual fee for this card, and you can add employee cards for free.
5. CitiBusiness AAdvantage Platinum Select Mastercard
For business owners frequently on the move for work, the CitiBusiness AAdvantage Platinum Select Mastercard may be the ideal choice. This card offers 2 AAdvantage miles for every $1 spent on American Airlines purchases and on purchases at telecommunications merchants, cable and satellite providers, car rental merchants, and gas stations. You also earn 1 AAdvantage mile for every $1 spent on all other purchases. Additionally, you can earn a bonus of 70,000 AAdvantage miles after spending $4,000 within the first 4 months of opening your account.
This card comes with a $99 annual fee, but it can be offset by the benefits you receive. You get your first checked bag free for you and up to four companions traveling on the same reservation, preferred boarding, and a 25% discount on in-flight purchases.
Types of Business Cards
Business credit cards are tailored for business owners, providing a range of features and advantages to assist in expense management and rewards accumulation. Various types of business credit cards are available, each with its distinct set of features and benefits. This article will delve into some of the most prevalent categories of business credit cards.
Business Cashback Credit Cards
Cashback credit cards enable you to earn cashback rewards on your business expenditures. Typically, a percentage of your spending is returned to you as cashback rewards, which can be redeemed for statement credits, cash, or other incentives. These cards often offer enhanced cashback rewards for specific spending categories, such as office supplies, fuel, or travel.
Business Rewards Credit Cards
Rewards credit cards allow you to accumulate points or miles on your business purchases. These points or miles can be redeemed for travel, merchandise, gift cards, or other rewards. Some rewards credit cards provide higher earning rates for particular spending categories, such as dining or travel.
Business Travel Credit Cards
Designed for business owners who frequently travel for work, travel credit cards typically offer rewards points or miles that can be used for travel-related expenses like flights, hotel accommodations, and rental cars. They often come with travel-related perks such as priority boarding, complimentary checked bags, and access to airport lounges.
Business Balance Transfer Credit Cards
Balance transfer credit cards enable you to move existing high-interest credit card balances to a new card with a lower interest rate. This can help you save on interest charges and expedite the payoff of your balance. Some balance transfer cards also offer rewards or cashback programs.
Business Low-Interest Credit Cards
Low-interest credit cards provide a lower interest rate on purchases compared to other credit cards. This can be especially beneficial if you anticipate carrying a balance from month to month. Some low-interest credit cards also offer rewards or cashback programs.
Business Secured Credit Cards
Secured credit cards necessitate a security deposit, usually equivalent to your credit limit. This can be a suitable option if you have limited credit history or a low credit score. Your credit limit is typically determined by the amount of your security deposit. Secured credit cards can aid in building credit and enhancing your credit score.
Business Charge Cards
Similar to credit cards, charge cards require you to settle your balance in full each month. This can be a wise choice if you want to avoid interest charges while establishing credit. Some charge cards also offer rewards or cashback programs.
Best Business Credit Cards
Here are some notable business credit cards categorized by their strengths and benefits:
- Best Overall, Best for Travel Rewards: Ink Business Preferred Credit Card
- Best Business Hotel Card: Marriott Bonvoy Business American Express Card
- Best Business Airline Card: United Business Card
- Best for American Airlines: CitiBusiness / Advantage Platinum Select Mastercard
- Best No Annual Fee Business Card: WellsFargo Business Platinum Credit Card
- Best for Office Supply Purchases: Ink Business Cash Credit Card
- Best for Airport Lounge Access: The Business Platinum Card from American Express
- Best for Amazon Business / AWS Cloud Hosting: Amazon Business Prime American Express Card
Best Brands of Business Credit Cards
As businesses increasingly turn to credit cards for expense management and rewards, selecting the right card can be a crucial decision. This blog post will explore four popular business credit cards: Ink Business Preferred℠ Credit Card, Marriott Bonvoy Business™ American Express® Card, United℠ Business Card, and CitiBusiness® / AAdvantage Platinum Select Mastercard.
1. Ink Business Preferred℠ Credit Card Details:
The Ink Business Preferred℠ Credit Card is a popular choice for small businesses. It offers a sign-up bonus of 100,000 points after spending $15,000 in the first 3 months of account opening, which is worth $1,250 when redeemed for travel through Chase Ultimate Rewards. The card also offers 3 points per $1 on the first $150,000 spent on travel, shipping purchases, internet, cable, and phone services, and advertising purchases made with social media sites and search engines.
One of the standout features of the Ink Business Preferred℠ Credit Card is its travel and purchase protection benefits. These include trip cancellation/interruption insurance, primary rental car insurance, and purchase protection against damage or theft for up to 120 days from the date of purchase.
2. Marriott Bonvoy Business™ American Express® Card Details:
The Marriott Bonvoy Business™ American Express® Card is an excellent option for businesses that frequently stay at Marriott hotels. The card offers a sign-up bonus of 100,000 Marriott Bonvoy points after spending $5,000 in the first 3 months of account opening. Cardholders earn 6 Marriott Bonvoy points for every $1 spent at participating Marriott Bonvoy hotels, and 4 Marriott Bonvoy points per $1 spent at U.S. restaurants, U.S. gas stations, wireless telephone services purchased directly from U.S. service providers, and on U.S. purchases for shipping.
The Marriott Bonvoy Business™ American Express® Card also offers a range of benefits that can help businesses save money on travel expenses. These include a free night award every year after your account anniversary, complimentary Marriott Bonvoy Silver Elite status, and automatic Gold Elite status when you spend $35,000 on eligible purchases in a calendar year.
3. United℠ Business Card Details:
The United℠ Business Card is a great option for businesses that frequently fly with United Airlines. The card offers a sign-up bonus of 75,000 bonus miles after spending $5,000 on purchases in the first 3 months from account opening. Cardholders earn 2 miles per $1 spent on United purchases, at gas stations, office supply stores, and restaurants. They also earn 1 mile per $1 spent on all other purchases.
One of the key benefits of the United℠ Business Card is that it offers two one-time United Club℠ passes every year. Cardholders also receive a free checked bag for themselves and one companion on United-operated flights, priority boarding, and 25% back on United in-flight purchases.
4. CitiBusiness® / AAdvantage Platinum Select Mastercard Details:
The CitiBusiness® / AAdvantage Platinum Select Mastercard is a great option for businesses that frequently fly with American Airlines. The card offers a sign-up bonus of 70,000 AAdvantage bonus miles after spending $4,000 in purchases within the first 4 months of account opening. Cardholders earn 2 AAdvantage miles for every $1 spent on eligible American Airlines purchases, telecommunications merchants, cable and satellite providers, car rental merchants, and gas stations. They also earn 1 AAdvantage mile per $1 spent on all other purchases.
The CitiBusiness® / AAdvantage Platinum Select Mastercard also offers a range of benefits that can help businesses save money on travel expenses. These include a free checked bag for the cardholder and up to four companions on the same reservation, priority boarding, and a $99 American Airlines Companion Certificate after spending $30,000 or more in a calendar year and renewing the card.
Additionally, cardholders can earn 5% AAdvantage mileage bonus on their annual spending, up to a maximum of 10,000 AAdvantage bonus miles per year. The card also comes with travel and purchase protection benefits, such as trip cancellation and interruption coverage, car rental insurance, and purchase protection against damage or theft.
5. Comparing the Four Business Credit Cards
All four of these business credit cards offer valuable rewards and benefits, but the right one for your business will depend on your specific needs and spending habits. If your business spends a lot on travel, the Ink Business Preferred℠ Credit Card and United℠ Business Card offer great rewards and travel benefits.
However, if you frequently stay at Marriott hotels or fly with American Airlines, the Marriott Bonvoy Business™ American Express® Card and CitiBusiness® / AAdvantage Platinum Select Mastercard respectively may be the better choice for you.
When it comes to sign-up bonuses, the Ink Business Preferred℠ Credit Card offers the largest bonus with 100,000 points, while the other three cards offer bonuses of 70,000 to 100,000 miles or points.
The annual fees for these cards vary, with the Marriott Bonvoy Business™ American Express® Card having the highest annual fee of $125, followed by the Ink Business Preferred℠ Credit Card with an annual fee of $95. The United℠ Business Card and CitiBusiness® / AAdvantage Platinum Select Mastercard have annual fees of $99 and $99 respectively, but the CitiBusiness® / AAdvantage Platinum Select Mastercard's annual fee is waived for the first year.
See Also: Top Small Business Loan Options for Individuals with Challenged Credit
How to Choose the Best Business Travel Rewards Credit Card
When choosing a business travel rewards credit card, there are several factors to consider to ensure you get the best value for your spending. Here are some key things to keep in mind:
Rewards Program: Look for a card that offers rewards points or cashback on business-related expenses such as travel, dining, and office supplies. Make sure to compare the rewards rates offered by different cards to see which one will give you the most rewards for your spending.
Sign-up Bonus: Many travel credit cards offer a sign-up bonus when you spend a certain amount within the first few months of opening the account. This can be a great way to earn extra rewards quickly, so make sure to consider the bonus offers when comparing cards.
Annual Fee: Some travel credit cards come with an annual fee, so make sure to compare the fees to see if the rewards and benefits offered by the card justify the cost.
Travel Perks: Look for a card that offers travel perks such as airport lounge access, free checked bags, and travel insurance. These perks can save you money and make your travel experience more comfortable.
Foreign Transaction Fees: If you travel internationally for business, make sure to choose a card that doesn't charge foreign transaction fees. These fees can add up quickly and eat into your rewards.
Credit Score Considerations
It is imperative to note that travel credit cards typically necessitate applicants to have a good to excellent credit score. Prior to applying for a card, ensure that you meet the eligibility criteria by checking your credit score.
Factors for Choosing the Right Business Travel Rewards Credit Card
In order to select a card that aligns with your preferences and maximizes rewards, it is crucial to:
Review Redemption Options: Evaluate the avenues available for redeeming rewards earned through the credit card. Some cards provide flexibility in redemption, offering options like cashback, gift cards, travel bookings, or merchandise. Opt for a card that offers redemption choices that suit your specific travel requirements and preferences.
Explore Partner Programs: Certain business travel rewards credit cards feature partner programs that allow users to accumulate extra rewards or benefits when using the card with specific hotels, airlines, or other businesses. Evaluate whether these partner programs complement your travel needs and preferences.
Assess Customer Support: Prioritize cards that offer robust customer support, especially for travel-related concerns. Verify that the card provides round-the-clock customer service and assistance for travel-related emergencies such as lost luggage or trip cancellations.
Leverage Budgeting and Expense Management Tools: Some business travel rewards credit cards come equipped with budgeting and expense management tools designed to assist in tracking spending and efficiently managing expenses. Consider these tools as a means to stay on top of your financials and optimize rewards.
In Summary
When selecting a business travel rewards credit card, take into account the rewards program, sign-up bonus, annual fee, travel perks, foreign transaction fees, credit score requirements, redemption options, partner programs, customer support, and budgeting tools. By factoring in these elements, you can identify the ideal card to cater to your business travel needs and derive the utmost benefits from your expenditures.
Important Considerations Before Applying for a Business Credit Card
Before proceeding with the application for a business credit card, it is imperative to take the following factors into consideration:
- Credit Score: Your credit score holds significant weight in the approval process for a credit card. Ensure that you check your credit score beforehand to meet the card's prerequisites. A favorable credit score can also lead to more favorable terms and lower interest rates.
- Rewards Program: Delve into the rewards program offered by the card, encompassing rewards rates, redemption options, as well as any bonuses or perks extended. Select a card whose rewards align with your business spending and travel requisites.
- Fees and Interest Rates: Opt for a card with reasonable fees and interest rates. Pay close attention to the annual fee, foreign transaction fees, late payment charges, and other associated costs. Choose a card with a nominal or zero annual fee and strive to avoid carrying a balance to minimize interest expenses.
- Credit Limit: Evaluate the credit limit offered by the card and ensure it meets your business requirements. Exercise responsible use of the credit limit and refrain from maxing out the card, as this can negatively impact your credit score.
- Credit Card Issuer: Take into account the reputation of the credit card issuer and its track record for customer service. Seek out a card issued by a reputable bank with a strong customer support system and robust online account management tools.
- Business Expenses: Scrutinize your business expenses and assess your ability to settle them in full each month. It is vital to responsibly utilize the credit card, refraining from carrying a balance or utilizing it for personal expenses.
By weighing these factors, you can select a business credit card that is in sync with your business needs, allowing you to maximize rewards while minimizing fees and interest charges. Additionally, it is imperative to thoroughly review the card's terms and conditions prior to applying, ensuring a comprehensive understanding of the card's fees, rewards structure, and other features.
Building Business Credit: Key Steps
Establishing business credit is a pivotal endeavor for any small business owner. Here are some critical steps to take in order to establish and build business credit:
Incorporate Your Business: Incorporating your business as an LLC or corporation can serve to segregate your personal credit from your business credit. This distinction safeguards your personal assets and facilitates the establishment of business credit.
Attain an Employer Identification Number (EIN): An EIN is a distinctive tax ID number that identifies your business. You can acquire an EIN from the IRS at no cost, and it is requisite for opening a business bank account and applying for credit.
Initiate a Business Bank Account: Opening a business checking account in the name of your business is pivotal for building a banking relationship and establishing credit history.
Punctual Payment of Bills: Ensuring that your bills are paid in a timely manner and in full is essential for establishing a positive payment history. This practice aids in building your business credit score, making it easier to qualify for credit in the future.
Apply for Business Credit Cards: The application for a business credit card can serve as a catalyst for establishing credit history and earning rewards for business expenses. Select a card with reasonable fees and interest rates, and be diligent in paying your bills punctually.
Secure Trade Credit: Trade credit entails credit extended by vendors or suppliers to assist in financing your business purchases. Forge relationships with vendors and suppliers, and make sure to honor your financial obligations in a timely manner to build your trade credit history.
Monitor Your Credit Report: Regularly reviewing your business credit report is imperative to ensure its accuracy and currency. Any discrepancies or inaccuracies should be promptly addressed to enhance your credit score.
By adhering to these steps, you can progressively establish and bolster your business credit. Remember to exercise patience and consistency in your efforts, as the process of building credit requires time and dedication.
How to Apply for a Business Credit Card:
Check Your Credit Score: Before applying for a business credit card, it's important to review your credit score to ensure you meet the card's requirements. Business credit cards typically require a good to excellent credit score, often falling within the range of 680 to 750.
Research Business Credit Cards: Conduct thorough research on various business credit cards, comparing their features including rewards programs, interest rates, fees, and credit limits. Select a card that aligns best with your business needs and credit profile.
Gather Business Information: Collect all necessary information required to complete the credit card application. This includes details like your business name, legal structure, tax ID number, and annual revenue. Additionally, you may need to provide personal information such as your name, address, and social security number.
Complete the Application: Fill out the credit card application, either online or in person, ensuring all required information is provided. It's crucial to thoroughly read the terms and conditions before submitting the application.
Wait for Approval: After submitting your application, patiently wait for the credit card issuer to review and make a decision. The processing time may range from several days to a few weeks, depending on the issuer.
Activate Your Card: Once you receive the credit card in the mail, activate it by either calling the phone number provided on the card or following the instructions provided. Subsequently, you can commence using your business credit card for purchases and earning rewards.
Remember to exercise responsible usage of your business credit card by consistently paying bills on time and in full, refraining from carrying a balance, and restricting its use solely for business-related expenses. By employing your business credit card judiciously, you can establish credit history, earn rewards, and enhance your cash flow.
Can Business Credit Cards Be Used for Personal Expenses?
While it may be tempting to utilize a business credit card for personal expenses, it's essential to maintain a clear separation between business and personal finances. Here are a few key reasons why:
Tax Deductibility: Business expenses incurred using a business credit card are generally tax deductible. However, if the card is used for personal expenses, it may not be possible to deduct those expenditures on your taxes.
Bookkeeping: Mixing business and personal expenses can complicate and prolong the bookkeeping process. Maintaining a distinction between business and personal expenditures facilitates easier expense tracking and financial statement preparation.
Liability: In cases of an audit or legal proceedings, using a business credit card for personal expenses may hinder the ability to prove which expenses were legitimately business-related. This could lead to higher tax liabilities or increased legal fees.
Although there may be exceptions, such as emergencies or instances where travel serves both personal and business purposes, it is crucial to minimize personal expenses charged to a business credit card and to meticulously document them. Generally, it is advisable to reserve personal expenses for a personal credit card, and to exclusively utilize a business credit card for business-related expenditures.
Can a Personal Credit Card Be Used for a Business?
Technically, a personal credit card can be employed for business expenses, but this practice is generally discouraged. Here are a few compelling reasons why:
Liability: If a personal credit card is used for business expenses and financial difficulties arise, the individual cardholder bears full responsibility for the debt. This means that the individual's personal credit score may be adversely affected if they are unable to settle the bill.
Tax Implications: Using a personal credit card for business expenses can complicate the process of tracking business expenditures for tax purposes. This complexity may hinder the ability to claim tax deductions or provide accurate financial records for the business.
Bookkeeping: Employing a personal credit card for business expenses can lead to more complex bookkeeping, especially if a large number of transactions are involved. Keeping business and personal expenses distinct can simplify accounting and reduce the risk of errors.
Credit Limits: Personal credit cards generally have lower credit limits compared to business credit cards. If a substantial number of business expenses are incurred, the personal credit card may be maxed out, potentially hindering essential purchases.
For small business owners, it is generally advisable to apply for a business credit card exclusively designated for business expenses. Business credit cards serve to establish a separate line of credit for the business, maintain a clear delineation between personal and business finances, and often provide benefits and rewards tailored specifically for business owners.
Distinguishing Between Business and Consumer Credit Cards
Business and consumer credit cards possess distinct characteristics. Here are some key differentiators:
Credit Limit: Business credit cards typically offer higher credit limits compared to consumer credit cards. This is because businesses often have greater expenses and require more purchasing power.
Rewards Programs: Business credit cards frequently feature rewards programs customized to cater to the requirements of business owners. For example, a business credit card may offer bonus rewards for office supply purchases or travel-related expenses.
Fees: Business credit cards may entail higher fees in comparison to consumer credit cards, such as annual fees or charges for additional cards. Nevertheless, some business credit cards may waive these fees or provide other perks, like free employee cards or expense management tools.
Liability: With consumer credit cards, the individual is generally held liable for the debt. Conversely, with business credit cards, the business entity is typically held responsible for the debt. This safeguard ensures that the business owner's personal assets are generally shielded from business-related debt.
Credit Reporting: Business credit cards typically report to business credit bureaus, while consumer credit cards report to personal credit bureaus. This means that responsible use of a business credit card can contribute to the establishment of business credit history and an enhancement of the business's credit score.
Approval Criteria: Business credit cards may have different approval criteria compared to consumer credit cards. For instance, the credit card issuer may consider factors like the business's revenue and credit history, as well as the personal credit history of the business owner.
In essence, business credit cards are designed to cater to the unique needs of business owners, offering higher credit limits, tailored rewards programs, and other features to help businesses manage expenses and establish credit history.
In conclusion, choosing the right business credit card for your organization requires careful consideration of your specific needs and spending patterns. Take the time to evaluate the features, benefits, and any additional perks offered by each card, and make sure to use your chosen card responsibly to maximize its value for your business. With the appropriate business credit card in your possession, you can streamline your operations, accumulate rewards, and build a solid credit history, all while supporting the growth and success of your business.