Pricing and Costs of Small Business Credit Cards

Small business credit card costs and charges explained for business owners

Small business credit cards are a fixture in most business financial reports. In order to utilize these cards successfully, the business owner needs to take into consideration the costs of using them. 

The benefits of using a small business credit card are numerous, including easy management of monthly expenses and giving employees a line of credit for business related expenses. The benefits must outweigh the cost of the line of credit, though. Take the following into consideration when investigating the pricing and costs of small business credit cards:

1. Ensure that the business credit is high enough to qualify for the lowest interest rates possible, reducing expenses and costs.

2. Plan to use credit cards for business solely, as mixing personal and business expenses are a tax problem.

3. Maintain all company credit cards and statements for tax purposes at the end of the year.

Choose business credit cards with low interest rates

A business credit card can be expensive when interest rates on the line of credit are high. Locate the most affordable credit lender offering the most flexible interest rates to ensure the business is not paying more than it should. Interest rates for businesses are dependent on the lender and on the business's creditworthiness.

Expect to pay between 3% and 18% annually, depending on the company. To minimize finance charges, pay the balance in full within the card's grace period. 

Determine the expense of fees on corporate credit cards

In some situations, small business credit companies charge fees for using their service. Fees may be membership fees or fees for multiple credit cards on the same account. Fees may also be charged to reward credit cards, including mile fees and cash back fees. Fees range in cost from $39 to $200 per year, depending on the line of credit. A statement of fees must be made available to the small business owner prior to applying for the line of credit. 

Manage credit cards for small business to avoid excessive costs

When a small business has credit cards, small business management must maintain the credit lines effectively to reduce any charges that are not necessary. To maintain expenses, make payments on time. Keep credit card balances as low as possible to avoid over limit fees. Maintain the business' creditworthiness to ensure the business qualifies for low rate cards whenever possible.

The cost of late fees and over-the-limit fees will range from state to state, with averages being between $25 and $39 per month, per overage. 

  • Choose the best business credit card based on a combination of each of these items. Locating the most affordable card can help a business save thousands of dollars each year on credit usage.