A business credit card buffers your exposure to receivables, tracks spending and lets you separate business finances from your personal finances.
Every small business owner knows firsthand how hard it is to run a business. The demands on your personal time as well as your finances feel burdensome and never ending. Whether you're an entrepreneur, just launching a business or have run a business for a few years now but have used your personal credit card, a prudent financial move is to open a business credit card.
A business credit card buffers your exposure to receivables, tracks spending and lets you separate business finances from your personal finances. They come with other benefits too. Business credit cards often have rewards programs that appeal to the needs of business owners, and you can issue cards to employees to streamline business-expense processes.
Business credit cards are not the same thing as consumer credit cards. For that reason, we offer several suggestions to help you find the best credit card for your business. Three credit cards that you can consider are the American Express OPEN for Business, AT&T Universal Business Rewards Card and the CitiBusiness AAdvantage Card.-
Best Convenience Features or Rewards
Small business credit cards often include business-related features so you can spend less time managing your business's finances and more time doing what you love: running your business. For example, some business credit cards track expenses online, so you can quickly and easily create expense reports. Some cards integrate with QuickBooks. Others let you file receipts digitally using a mobile app.
The Business Platinum Card has an annual fee. The grace period is 20 days, and the balance is due in full each month. There are no foreign transaction fees, and there is also no preset spending limit. There is a penalty for late and returned payments.
American Express's Gold Rewards Card allows cardholders to quickly accumulate rewards points. Because it doesn't have the same perks as the Platinum Card, you pay less for it. The Business Gold Rewards Card finds a happy middle ground where you can enjoy excellent perks without having to pay an exorbitant annual fee. This business credit card might be more suitable for smaller companies than the Platinum Card.
The annual fee for the Gold card is waived for 12 months, but after that, there is an annual charge. All purchases must be paid in full. There are no transaction fees. There is, however, a penalty for late and returned payments.
American Express's third business credit card is the Plum Card, which gives cardholders flexible payment options. As part of the Open Savings Program, cardholders can qualify for lower prices and benefits with affiliate airlines, hotels and delivery services.
The Plum version has no annual fee for the first year, but there is an annual fee for subsequent years. You can take up to 60 days to pay your bill without interest, though there is a percentage discount if you pay the bill within 10 days of the statement's due date. There is a fee for late and returned payments.
American Express offers expanded and personalized customer service for its Open members. Accounts can be accessed, managed, monitored and set up to receive notifications online and through mobile devices. Business Platinum cardholders get an exclusive phone extension for direct contact with AE's customer service representatives.
The American Express Open credit cards are a good option for qualifying businesses. Businesses that qualify receive a wide array of useful options and benefits that extend to travel savings, accumulating rewards points and flexible payment options.
Best for Small Business Rewards
Some business credit cards enroll you in office-supply and business-related savings or rewards programs. Some also provide various protections against identity theft, fraud and employee misuse.
Business cards generally offer rewards programs and member benefits of some sort, but sometimes those benefits don't align with actual business needs. AT&T's Universal Business Rewards Card offers benefits designed to help small businesses.
On eligible AT&T purchases, cardholders receive five rewards points for every dollar spent. Select purchases on gas, professional services and office supplies net cardholders three points for every dollar. Employee spending can also increase rewards point accrual.
The Personal Business Assistant, a service that comes with the cards, puts cardholders in touch with marketing and administrative services, and it helps with management needs, travel arrangements, and hotel and entertainment reservations.
The AT&T Universal Business Rewards Card line also offers optional Smith Barney business accounts, giving business owners additional aid in managing immediate finances plus short and long-term investments. This is a unique feature not found with other business credit cards.
As an AT&T Universal Business Rewards cardholder, members have access to a variety of rewards programs. These programs give you discounts on prescriptions and provide some dental and health benefits. Cardholders also receive travel accident insurance for all plane, train and bus tickets purchased using the card. In addition, it offers automatic car rental insurance and travel and emergency assistance. Many cards offer one or two of these services, but it is rare to find one that includes so many.
AT&T Universal Business Rewards Card clients can access and manage accounts online. Cardholders can bypass phone trees and speak directly to a customer service representative.
The AT&T Universal Business Rewards Card line has a rewards accrual system in which members can quickly accumulate and use rewards with immediate benefit for them: office supplies, travel, hotel reservations and entertainment and other outlets. It also includes useful services that are not found on most business credit cards.
Best with No Annual Fee
Another item to check is your annual fee, and it gets complex here. Some credit card companies don't charge an annual fee at all, like the AT&T Universal Business Rewards Card, whereas others do. Others have an upfront fee but do not charge for the ensuing years. And some cards may not charge an annual fee for the first year but then may charge a fee the following years.
Bank of America offers business credit cards with a relatively low annual percentage rate (APR) and useful account features. You can get extra cards and issue them to employees, and you can establish the credit limits for each employee card.
With Bank of America business credit cards, you can download your credit transactions into QuickBooks. If you would like overdraft protection, you can link your credit card to a business checking account.
Bank of America offers an introductory APR during the first seven months, after which the interest rate varies. There is no annual fee.
If you have employees that make charges on behalf of your company, one of the features with Bank of America's business cards is that you can issue cards to employees at no cost to you. You can also set the credit limit for each employee's card. If any employee misuses the card, you have liability protection with some cards, such as with the Platinum Plus for Business MasterCard.
The WorldPoints Rewards for Business Visa Card is geared toward emerging and growing businesses that either lack a well-established credit history or the necessary credit score required by some higher-tier business credit cards. Points with this card can be redeemed for cash, gift cards and travel.
Bank of America provides travel and emergency services with several of its cards. For example, travel accident insurance and auto rental insurance cover rental cars if they are stolen or damaged. Bank of America also provides emergency ticket replacement, lost-baggage assistance and emergency translation services to its clients.
Bank of America provides toll-free customer support to business credit card account holders 8 a.m. to 9 p.m. Eastern time. There is also a toll-free number for lost or stolen credit cards within the U.S. and a collect-call number for calls outside the U.S. You can access your account online at any time to pay your bill,
The Bank of America business credit cards carries no annual fee and offers a low APR. They come with travel and emergency services benefits. If you think you will carry a balance, Bank of America offers some different options for business credit cards.
Best Employee Credit Cards
Another useful feature for business cards is the ability to have separate cards for employees, like the CitiBusiness AAdvantage Card. Many business credit card companies let you set spending limits for employees. This can help ensure that your budget stays intact. Be sure to check on fees, though. Some card companies charge for extra cards while others offer them for free.
After signing up, a new cardholder is offered 30,000 American Airlines bonus miles after spending $1,000 in purchases within the first three months of opening an account. Cardholders receive credit for two miles for every dollar spent on trips with American Airlines. For purchases on telecommunications, car rental, and at gas stations, customers receive two miles for every dollar spent. For other purchases, cardholders receive one mile for every dollar spent. There is no limit to how many miles you can accumulate with card.
There is a one-time annual fee for Citi's business credit cards. You pay the fee the first year, but then Citi drops the fee the following years. Citi charges additional fees, such as if you need a cash advance or you transfer the balance. Citi does not charge foreign transaction fees with its line of business credit cards.
One feature that Citi offers cardholders is its personal business assistant. Cardholders can get help with travel, hotel and dining arrangements. In addition, CitiBusiness AAdvantage customer service has an online help page, many online services and an online number cardholders can call for assistance.
CitiBusiness AAdvantage business credit cards are designed to offer perks for travelers. There is no cap on mileage, and you can save on in-flight purchases and receive free tickets, which can save small businesses a lot of money each year.
More Business Cards
Capital One Spark for Business is a line of business credit cards that lets you choose the rewards that make the most sense for your business. Each card has its own set of rewards, though, so if you change your mind about the rewards you would like, you can't change your plan.
The Cash and Miles cards come in two membership levels, Classic and Select. The Classic card is designed for customers with average credit while the Select Cash and Miles cards are aimed at those with excellent credit. The Select cards offer different terms and more features. There is no annual fee after the first year with the Classic card. Select cards have no annual fee. In addition, Select cards offer cash bonuses when you spend a certain amount using the card.
If you provide your employees with a business credit card, there is no charge for additional cards. You are also covered from fraud. Each card comes with $0 fraud liability if your card is lost or stolen. Cardholders are alerted in real time via text, email or phone of any fraud attempts so the situation can be cleared up quickly.
You can contact Capital One through email and by phone, or you can check your account and pay your bill online.
Capital One Spark for Business Cards have several specialized rewards cards to choose from. If you like flexibility in the type of rewards you receive, these may not be the best choice for you because they only offer miles or cash, depending on the card you choose. On the other hand, if you have a certain type of reward you're looking for, one of these cards can help you accrue points quickly.
Ink by Chase is a line of credit cards for businesses that provides different benefits – cash back or points – depending on the benefits you'd prefer to receive. Ink Cash offers cash back while Ink Plus allows you to earn points for travel. These cards allow you to gain benefits quickly, but there are limitations.
Ink Cash works similarly: For every $25,000 you spend in combined, qualifying purchases, you earn a certain percentage of cash back. On all other purchases, you earn a lower percentage cash back with no limit to the amount you can earn. The rewards on these cards don't expire as long as you have your account with Chase.
In addition to rewards, there are some additional features and benefits: You can set individual spending limits on employee cards, for example. You can also use Ink's app to take a photo of receipts for business expenses and digitally file them. Instant alerts on your mobile phone also help you know when purchases have been made so you can track spending.
Ink also covers your purchases against damage or theft up to $10,000 per claim and $50,000 per account. It offers extended warranty protection for an additional year. This additional year is only for eligible warranties, though. Rentals made with some of these cards are also covered.
The Ink line of business credit cards by Chase provide different types of benefits to business owners, depending on their preference: cash back on purchases or reward points that can be used for cash back, travel, etc. You are limited on the rewards you can accrue, depending on the type of items you purchase.
Pay Attention to the Terms And Conditions Agreement
As any small business owner can attest to, credit cards can be a safety valve if you experience cash-flow crunches, and they do happen.
For those business owners considering getting a new business credit card, there are dozens of options to choose from, with lots of incentives and attractive options. However, you'll want to ask for and carefully look over the terms of service before agreeing to sign up for a new card. Here's what you need to consider:
Teaser, Introductory Rates
Don't get teased into an attractive introductory interest rate while the actual rate lurks in the wings to make an unannounced appearance. Check the terms and conditions of service to see what your rate will be and if it will change after a certain time period. Another item to watch for is whether the rate is fixed or variable. A varying rate can skyrocket, leaving you paying much more interest than you planned, especially if you plan to carry a balance.
Late & Over-Limit Fees
When reviewing the terms of service, take a look at what your late fees and over-limit fee may be. Late fees fluctuate depending on the card. Some cards don't have an over-limit fee, which can be good for those times in your business cycle when spending is high or if you lose track of your balance and overspend.
Foreign Transaction Fees
If you travel a lot, see if there is a fee for using your card overseas. Foreign transaction fees can add up when you are abroad and leave you with an unpleasant surprise on your statement.
The Truth in Lending Act and the Credit CARD Act of 2009 does not apply to business credit cards. That means issuers can legally charge you late fees. It is also well within their right to raise the interest rate on previously accumulated balances.
Features to Look For - Choosing Your Benefits
Some banks reward your use of their card by giving you points that you can redeem for goods, airline miles, services or cash. Select business credit cards also offer statement credits as a reward.
If the card doesn't come at too high a price in terms of annual fees or high interest rates, you might be attracted to benefits that can include auto rental, baggage loss-and-damage insurance, or purchase protection in case of loss, fire, theft, damages, or price depreciation. Some providers offer advanced benefits such as access to exclusive events, hotel amenities and air travel upgrades.
When choosing a card for its benefits, be sure to take a look at the limitations. While the benefits may look good on the surface, limitations may render them nearly useless in reality. For example, some benefits may expire after a certain time while other card issuers require that you use the card for a certain period of time before you're eligible to use the rewards. Some cards also have rules about what types of purchases count toward points or cash-back rewards. Others have caps on how many points or rewards you can accrue in a certain amount of time.
Customer Service Options
When you have a question or an unexpected emergency (your card is stolen), being able to reach the credit card company quickly is paramount. You should have online access to manage your account.
In addition, you want to be sure you can quickly reach a customer service representative over the phone. Also check to see whether the company offers online live chat. This can be helpful when you don't want to wait on hold or you have a quick question.
Company credit cards are a convenient way to separate your personal finances from your business finances. This move will also help you each April when you prepare your tax returns. Your CPA will thank you for separating out your personal and business finances.
The benefits and rewards associated with business credit cards are intended to be helpful for business owners. However, the legal protections afforded by the Truth in Lending Act and the Credit CARD Act of 2009 do not apply to corporate credit cards. Bottom line: shop wisely.
Ready to choose your business credit card? Here's a breakdown of our complete coverage:
- Give Yourself Credit in Properly Managing Small Business Credit Cards
- Employee business credit cards
- Can a Business Credit Card Lower Your Stress
- What To Know About Business Credit Cards
- Refinancing Business Credit Card Debt
- Considering a Business Credit Card
- The Best and Worst Business Credit Card Issuers