Business credit cards are a type of credit card designed to serve the spending needs of a whole company. You can choose business credit cards based on the size of your business, on the amount of money your business makes each year, on the specific rewards of a credit card, and many other factors. Compare business credit cards below to choose the best credit card for your business.
What is a business credit card?
A business credit card is a standard credit card that is owned by a business rather than an individual. The best business credit cards have a lot of the same features and advantages as standard credit cards, so if you already know a bit about standard credit cards, then you know a bit about business cards.
The best business credit cards will have the right mix of
Depending on how you need to use your credit card, you can weigh these factors to determine which are the most important for your company. Most likely, you will be using your business credit card in one or both of the following ways:
Financing your company when you don’t want to take out a loan.
Covering the costs of smaller business expenses like travel and meals.
Depending on your spending habits, you will want to weigh the relative benefits of different business credit cards. For example, if you need your business credit card to pay for meals or airline miles, then you will probably want a card with good rewards. Investigate business credit cards with rewards programs to find the best business credit card for your expenses. For example, a certain business credit card may offer rebates at lots of the local restaurants in your area. This would be very useful if you needed to cover lots of office meals or client lunches. However, if you don't need rewards than a reward card with a high annual fee wouldn't be the best business credit card for you.
If you need a card with rewards, you will probably want to find a card with a low APR and low annual fee. Reward cards are more likely to have annual fees and higher APRs, so shop around before picking a card.
However, if you need to use your card for financing certain large company expenses, you may be more interested in finding a card with a low introductory APR. With a low or 0% introductory APR, you can make large purchases and take your time in paying back your debt without needing to worry about interest.
A business credit card with a low introductory APR is a good choice for any business that doesn’t need to use their credit card for frequent purchases. Low introductory APR credit cards sometimes have very high APRs later, but if you only need to use your card occasionally and you can pay back your debts immediately, then you won’t be too affected by rate changes.
When should you consider a business credit card?
Business credit cards can be a great choice if you need to make purchases or spend money on behalf of your business but you don’t want to dip into your personal funds or take out a personal or business loan.
If you have a new business, then a new business credit card can be a great way to cover the costs of your fledgling office. You will need to make a lot of one-time purchases when you start a new business. For example, you may need to buy office furniture, or you may need to put down a deposit on a rented office space. A business credit card, especially a low introductory APR credit card, can be very useful in this case.
However, if you need to borrow a lot of money for your new business, you should choose a loan instead of a business credit card because loans are more likely to have lower interest rates on large sums. A business loan will also have an easier repayment plan.
If you own a small business, then a small business credit card is a great way to manage your company expenses. Most small businesses will need to make lots of small purchases. For example, you may need to buy lots of basic office supplies like pens and notepads, or maybe your business has a kitchen and you need to buy some new cups and plates. Other potential expenses might include business lunches, travel, and repair of office equipment.
The cost of these purchases should be covered by the business itself. But without a business credit card, it can become overly complicated to buy these items or cover these expenses. Small business credit cards can greatly simplify the provision of these basic office necessities.
For these kinds of small purchases, you will probably want to get a small business credit card with a rewards program, and a low annual fee and low APR. You can choose programs with 1% to 5% rebate on most purchases, or you can get a more specific rewards program like an airline mile credit card.
Why not just use a personal credit card?
You can use a personal credit card for business expenses and get reimbursed later. The benefit of a business credit card is that there is no reimbursement required. You are also protected in the event your company goes belly-up -- you’re not on the line for any of your business-related purchases.