Small Business Credit Card Comparison
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|Capital One Spark Cash For Business Review||American Express OPEN Business Gold Rewards Review||Chase Ink Business Preferred Review||American Express Blue Business Plus Review||Chase Ink Business Cash Review|
|Credit Needed||Excellent||Excellent credit||Good, Excellent||Good, Excellent||Good, Excellent|
|Annual Fee||$0 first year; $95 subsequent years||$0 first year, $175 subsequent years||$95||$0||$0|
|APR||Variable, 18.74%||None - charge card||Variable, 18.24% – 23.24%||Variable, 12.99% - 20.99%||Variable, 15.49% – 21.49%|
|Introductory Rate||None||None - charge card||None||0% APR for the first 15 months||0% APR for the first 12 months|
|Rewards||2% cash back on all purchases||3 points per $1 on a category of your choosing; 2 points per $1 on the for remaining categories; 1 point per $1 on all other purchases||3 points per $1 on travel, shipping, internet/cable/phone, and internet advertising, max $150,000 per year; 1 point per $1 on all other purchases||2 points per $1 on all purchases, max $50,000; 1 point per $1 on all purchases after $50,000||5% cash back on internet/phone/cable and purchases at office supply stores, max $25,000 per year; 2% cash back at restaurants and gas stations, max $25,000 per year; 1% cash back on all other purchases|
Choosing the Best Credit Card For Your Small Business
Credit cards offer cost savings and other benefits to small businesses in a number of ways, including rewards or cash back on everyday expenses, expense tracking, deferred payments, 0% APR periods, and other shopping and travel benefits. Clearly, every business should have at least one (if not more) business credit cards in its arsenal.
However, choosing the right card can be tough — every card carries unique rewards, fees, benefits, and bonus offers. How do you choose the card that meets your business needs?
We’ve designed the comparison table above to help you out. We have spent countless hours researching business credit cards and reading the fine print to help small business owners like you save time and get matched with the best cards. The above table represents what we believe are the best credit cards for most small businesses.
Take a look at our top picks above, or read on to learn what you need to consider when choosing a business credit card.
Qualifying For A Business Credit Card
Before getting carried away with rewards values, special offers, and annual fees, it’s important to consider the kinds of business credit cards you’ll qualify for. After all, nobody wants to spend a bunch of time on credit card applications only to be rejected.
Fortunately, business credit cards tend to be easier to qualify for than other types of business financing (such as small business loans or invoice factoring). In fact, you might not even need to run a business to qualify!
The following is an overview of common business credit card requirements.
Knowing Your Credit Score
Your personal credit score is easily one of the most important factors when determining your business credit card eligibility. Card issuers rely on your credit history and score to evaluate how responsible you’ve been with money in the past, which reflects how you’re likely to perform in the future.
To qualify for a top-tier credit card, you’ll typically need a good or excellent credit score. All financial institutions have their own standards, but in general, a credit score of 670 – 750 is considered “good” to “very good,” and a score of 751 – 850 is considered “excellent.”
If your score is below that threshold, you might not qualify for the cards that offer the best rewards and highest savings values. However, that doesn’t mean you won’t qualify for any card; many credit card issuers offer cards specifically for borrowers with subprime credit scores. These cards can be used to build up your personal and business credit scores, consolidate past debt, and eventually graduate to a top-tier card.
Issuers generally note what sort of credit profile you need to qualify on their website, so you don’t have to worry about spending time applying for cards you won’t qualify for. We also note credit score requirements on our credit card reviews.
Don’t know what your credit score is? Take a look at some of our favorite sites to check your credit for free. Already know that you need to improve your credit? Check out our tips for upping your score.
Debt To Income Ratio
Another important factor in determining your eligibility is your debt-to-income (DTI) ratio. This ratio represents the relationship between a person’s debt and their income. It’s used by creditors to determine if a borrower can take on more debt and, if so, how much.
You will not have to provide your debt-to-income ratio in a credit card application. Instead, you will be required to provide information about your financials so that the issuer can calculate and evaluate your DTI.
Do you know your DTI ratio? If not, head over to our article on calculating and lowering DTI.
Do I Need A Business To Qualify For A Business Credit Card?
It may surprise you to learn that owning a business isn’t necessarily a prerequisite for receiving a business credit card, at least not in the way you might think.
If you sell goods or services outside of a traditional employment situation (on Etsy, out of your garage, etc.), you are technically considered a sole proprietor and are therefore eligible to apply for business credit cards. That means that startups, entrepreneurs, and even freelancers are free to apply for business credit cards. In most cases, you can supply a social security number in lieu of a business EIN, and your personal income in lieu of business income.
How Will You Use The Business Credit Card?
Once you know your personal credit score and debt-to-income ratio, you can start comparing cards that you’re likely to qualify for.
Do You Plan On Paying Off Your Balance Every Month Or Carrying A Balance?
If you intend to pay off your credit card expenses in full every statement period, APR doesn’t matter. However, if you plan on carrying a balance — whether it’s because you plan on using the credit card to make a large purchase, you can’t afford to pay it off in full every month, or some other reason — APR is an important consideration.
Do you want to make a large purchase? If you are interested in using the card to make a large purchase, you should know that some credit cards offer generous 0% introductory APR periods. For example, you might be able to find a card that has 0% APR for nine, 12, or even 15 months after opening an account. With such a card, you can make a large purchase and have time to pay it off without accruing any fees.
Can you afford to pay your balance off every month? If you might not be able to pay the card off every month, you will want to look for a card with a low APR. Interest on credit cards can add up fast, and you want to keep the fees as reasonable as possible.
What Does (Or Will) Your Business Spending Look Like?
Business spending is another important consideration when deciding on a credit card. The amount of expenses you plan to put on your card, the most common purchases you plan to make on your card, and how often you plan to use the card, will all influence the card that will suit your business best.
Consider these questions to decide what type of card your business should choose:
1) How much do you plan to spend?
Do you plan on putting a lot of expenses on your card? You’ll want to look for a card with a high credit limit and a strong rewards program.
If you plan on spending quite a bit, you might also want to consider looking for a card with a generous signup bonus. These bonuses are earned by spending a certain amount on your card within a certain amount of time. If you plan to spend a lot on your card anyway, you will have no trouble earning the signup bonus.
2) How often will you use the card?
If you’re keeping a card around for emergencies, rewards programs don’t matter — instead, you’ll want to look for a card with low fees and low interest.
3) What types of purchases do you make the most?
The bulk of business credit card savings come from the rewards that cardholders receive for spending money on business expenses. Credit card holders can receive a percentage of their purchase as cash back or as points that can be applied to future purchases.
Most credit cards offer a standard 1% or one point per $1 spent on the card. For example, if you spend $1,000 you will receive $10 in cash back or 1,000 points. As an extra incentive for spending, cards often carry extra points for spending on certain categories. For example, you might be able to get three points per $1 on purchases at gas stations. Categories that commonly receive extra savings include:
- Office supply stores
- Gas stations
- Internet, cable, and phone services
- Computer hardware, software, and cloud computing services
- Advertising purchases
By examining your past expenses, you will be able to pinpoint high expense categories which could earn you a high rate of rewards.
Don’t have a lot of spending in one particular category? You might benefit from a card with a flat rate. In lieu of rewards tiers, some credit cards have a flat rate of 1.5% or even 2% cash back on all purchases. Although other credit cards will offer higher rates of rewards on some spending categories, flat rate rewards can add up quickly.
At first glance, business credit cards might be confusing due to their differing rewards programs, interest rates, fees, and signup bonuses. However, by carefully considering your eligibility and spending habits, you can narrow your choices down considerably.
Additionally, remember that you are not limited to one business credit card. By combining cards and being mindful of the expenses you’re putting on each, you could dramatically increase your savings.
Ready to get started? Take a look at the chart above to begin your search.