When Should You Consider a Business Credit Card?
When it comes to credit cards, it can be very confusing to figure out what the point of a business card is. Banks and credit card issuers often offer business cards that seem nearly identical to personal credit cards. But business credit cards are unique products designed specifically for the needs of small business owners.
Qualifying For a Business Credit Card
Many people are unclear if they are able to qualify for a business credit card. Small business credit cards are offered to any type of business regardless of its size or its legal standing. For example, you can qualify for a small business credit card as a sole proprietor before incorporating your business. Therefore, you can open a small business credit card account if you make money buying and selling items on Ebay, walking dogs, or selling crafts online.
When applying for a small business credit card, there will be a place on the application to provide your Employer Identification Number (EIN). If your business has not incorporated yet and doesn't have an EIN then you can supply your Social Security number instead. In either case, you will qualify for the card based on your personal income and credit history and you will be personally responsible for repayment of charges regardless of the success or failure of your small business.
What Small Business Credit Cards Offer
At the bare minimum, a small business credit card offers you the ability to separate your personal expenses from your company expenses. As a result, you will have a much easier time keeping your books and filing your taxes. In addition, many business credit cards offer features that are tailored to the needs of small business owners.
For example, some business credit card issuers offer customers a mobile app that allows them to tag purchases electronically, organize them, and even take pictures of receipts. In other cases, small business credit cards allow the primary cardholder to set alerts and spending limits on individual employee credit cards.
And while both business and personal credit cards can offer rewards in the form of valuable points, miles, and cash back, many small business credit cards offer additional rewards for common business purchases such as those from office supply stores, telecommunications service providers, and shipping companies.
When You Need a Business Credit Card
As your business grows, you will be faced with the challenge of keeping track of expenses and filing tax statements. A small business credit card can be a vital tool for this purpose, especially if you have been making purchases with your personal credit card.
Furthermore, small business owners can leverage their business expenditures to earn valuable rewards. For example, you can earn cash back to defray your costs or earn points and miles towards travel rewards for yourself or your employees.
While some business owners may have been in operation for some time, you don't even have to have your business up and running to apply for a small business credit card. Business credit cards can be a great help for those who are about to start a new business as they can be used to track expenses from day one.
Small Business Credit Cards to Consider
Best for Cash Back: Capital One® Spark® Cash for Business
The Capital One® Spark® Cash for Business card offers one of the highest rates of cash back rewards of any credit card. New cardmembers can receive $500 in cash back after making $4,500 in purchases within 3 months from account opening. Cardholders also receive a fantastic 2% cash back on all purchases with no limits and no minimum to redeem. Business features include quarterly and year-end summaries and free employee cards that earn you rewards. There is a $95 annual fee for this card that's waived the first year, and no foreign transaction fees.
Best for Airline: CitiBusiness® / AAdvantage® Platinum Select® World Mastercard®
The CitiBusiness® / AAdvantage® Platinum Select® World Mastercard® from Citi, a Credit Cards House advertiser, offers business travelers tremendous perks and benefits in addition to frequent flyer miles. For a limited time, new applicants earn 70,000 bonus miles after making $4,000 in purchases within 4 months of account opening, which is enough for two round-trip flights in the contigious United States, Canada, Alaska, the Caribbean or Central America, assuming you redeem at the MileSAAver redemption tier.
This card also offers benefits when flying American Airlines including preferred boarding, a first bag checked free, and 25% savings on eligible inflight food, beverage and Wi-Fi purchases when you use your card on American Airlines flights. You can also receive reduced mileage awards for up to 7,500 fewer miles, as well as a companion certificate each year you spend $30,000 or more and renew your cardmembership. There is a $99 annual fee for this card that's waived the first year, and no foreign transaction fees.
Best for Hotel: Starwood Preferred Guest® Business Credit Card from American Express
The Starwood Preferred Guest® Business Credit Card from American Express, a Credit Cards House advertiser, offers business travelers incredibly flexible rewards as well as valuable benefits when staying at Starwood and Marriott properties. American Express is currently offering a welcome offer of 100,000 bonus points after you use your new card to make $5,000 in purchases within the first 3 months. This offer end 10/31/18. Cardholders earn 6 points per dollar spent at Starwood/Marriott hotels, which include Westins, Sheratons, and other brands. Cardholders earn 4 points for purchase at U.S restaurants, U.S. gas stations, U.S. wireless telephone service providers and on U.S. shipping. For all other purchases cardholders earn 2 point.
Points can be redeemed for free night stays at Starwood/Marriott properties, and when you redeem four consecutive award nights, you get a fifth night free. Points can also be transferred to airline miles with over 40 different frequent flyer programs, and when you transfer 60,000 points at once, you receive a 15,000 point bonus.
Coming in 2019, cardholders will get credit for 15 nights each year toward the next Elite status level and automatic Gold Elite status after spending $35,000 on their card in a calendar year (the current spend is $30,000). Other benefits include free in-room premium Internet service and complimentary, unlimited Boingo Wi-Fi on up to four devices at more than 1,000,000 Boingo hotspots worldwide. Finally, Starwood business cardholders receive free access to the Sheraton Club lounges as well as easier booking with ReceiptMatch and Connect to QuickBooks. There is a $95 annual fee for this card that's waived the first year, and no foreign transaction fees.
Best for Business Perks: The Business Platinum® Card from American Express OPEN
The Business Platinum® Card from American Express OPEN, a Credit Cards House advertiser, offers dozens of perks for business users and frequent travelers. For example, you get access to the Delta SkyClub, Priority Pass Select and American Express Centurion airport lounges. Cardholders also receive an annual $200 airline fee credit and a one-time credit of $100 towards the Global Entry program, which offers expedited entry to the United States as well as access to the TSA PreCheck program. Cardholders also receive Gold status with both the combined Marriott-Starwood program and the Hilton Honors program, as well as elite status with Avis, Hertz and National car rentals.
Business specific benefits include the OPEN Savings program, which offers discounts on frequent business purchases. You can also use the ReceiptMatch feature to help you manage your expenses by adding and tagging receipts using your mobile device. Other tools include account alerts to help you monitor employee spending and the ability to designate an account manager that can do things like review statements, make payments, and dispute charges. It also comes with many other cardholder benefits such as premium roadside assistance, purchase protection, baggage insurance, and extended warranty coverage.
Welcome Offer: new applicants can earn up to 75,000 Membership Rewards® points. You’ll get 50,000 membership points after you spend $10,000, plus another 25,000 points if you spend an additional $10,000 in your first 3 months. You earn one point per dollar spent, 1.5x poings on purchases of $5,000 or more (up to 1 million points per year), and 5x points when purchasing travel reservations directly through American Express. Points are earned in the Membership Rewards program and are most valuable when transferred to airline miles and redeemed for expensive last minute travel or reservations in business or first class. There is a $450 annual fee for this card, and no foreign transaction fees.
First published , last updated
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.