Best Business Credit Cards for Small Business
As a small business owner it can be quite a challenge deciding what the best business credit card is to obtain with over 500 corporate credit cards to choose from in the marketplace.
In addition, there are various types of cards that each serves a unique purpose for your business. Such as tracking business expenses, controlling spending, managing employee spending, etc.
Before you select a card it is important to first obtain copies of your personal and business credit reports with scores. This allows you to determine which cards you can potentially qualify for.
Next, when searching for the best business credit cards for small business there are three main factors to consider:
- Card type
- Terms and conditions
- Card benefits and rewards
First, let’s review the four major card types you have to choose from
- Business Debit Card – This card works like a business checkbook because the limit is the amount of funds you currently have available in your business checking account. Every time you use it to make a purchase the amount charged is deducted right from your account.
- Prepaid Business Card – A convenient alternative to carrying cash and works just like a credit card. You add funds to your account and whatever amount you add is available to use for purchases. You never overdraw on this account and it also allows you to track your company expenses like a business check card. Some business owners issue these cards and pay their employees via direct deposit which saves the company money in issuing standard paper checks.
- Secured Business Credit Card – These types of credit cards are specifically designed for businesses with no credit or less than perfect credit history. An initial security deposit is required which establishes your card’s credit limit. In most cases a minimum deposit of $500 is required and once you begin making purchases you will receive invoices like a regular credit card.
- Unsecured Business Credit Card – Credit limits are based upon many factors depending on the issuer and can range from personal credit and/or business credit ratings, years in business, annual revenues and so on. These credit cards give your business the opportunity to earn perks and rewards.
- Business Charge Card – This card has all the convenience of a credit card without the high price of interest. When using this card you’ll have to pay your balance in full each billing cycle. Because you can’t carry a balance, a charge card doesn’t have a periodic or annual percentage rate, so there is no rate for a charge card issuer to disclose.
If you plan on paying your balance off each month, a card offering travel mile rewards or cash back bonuses may be the best business credit cards; however, if you plan on maintaining an ongoing balance, a low introductory or standard APR might be a better option.
Secondly, just because a card issuer offers all kinds of perks and rewards doesn’t mean it’s necessarily the best card. Always read the fine print so you completely understand the terms and conditions and fees associated with the card.
Finally, it’s important to note that even though business credit cards are not covered under the new CARD Act certain issuers are extending the CARD Act protections to its card holders. This is just another factor to consider when applying for a business credit card for your business.
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About the author
Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for AllBusiness, a subsidiary of Dun and Bradstreet and author of “Eight Steps to Ultimate Business Credit” and “How to Build Business Credit with No Personal Guarantee.” His articles and blogs have also been featured in American Express Small Business, Business Week, The Washington Post, The San Francisco Tribune, Scotsman Guide, Alltop, Entrepreneur Connect, and Active Rain.