If you run a business and need funding, then you should consider applying for a business credit card. Whether you simply want to pay day-to-day expenses or require financing for a big purchase, a business credit card can be the perfect solution. Business credit cards offer a number of great benefits specifically designed for businesses, from high credit limits to rewards points, huge sign up bonuses, and discounts on helpful products and services.
Business Credit Cards
Business credit cards are similar to personal credit cards in many ways but offer unique benefits for business owners. Currently, approximately 67 percent of small business owners have business credit cards, making them a popular choice of financing for business owners.¹ With a business credit card you can get the funding you need when you need it and pay it back over time. Business credit cards are not too difficult to qualify for and have many advantages that can lift the pressure off of your business and give you room to grow.²
Advantages of Business Credit Cards
One of the great advantages of business credit cards is that they’re often easy to apply for. Most cards have quick online application forms and there are relatively few stipulations. Generally, the business owner or manager should apply and be 18 or 21+ years old depending on the jurisdiction. Depending on the size of the business, the owner’s personal credit score may be evaluated during the application process.
Another huge advantage of using a business credit card is the reward point programs and other perks. If you spend a lot of money in your business, putting the money on a credit card can offer huge benefits. Generally, reward points are worth anywhere from 1-2% of what you spend in cash back or travel perks. For example, if you spend $1,000 on a business credit card, you’ll most likely earn $10-20 in cash back or travel credits. There are some exceptions. If you’re booking business or first-class flights, you can often get as high as 5% in value back on your spend!
A number of credit cards also offer business-specific perks. For example, American Express offers free extra cards for employees, airport lounge access, no foreign transaction fees, and car rental benefits on some of their cards.³
Finally, many business cards offer huge sign up bonuses for new cardholders. It’s not uncommon to receive $500-$1,000 in perks for signing up for a new business card, as long as you spend a few thousand within the first several months.⁴ That’s a huge amount of money for simply using a new credit card!
Consider Annual Fees & APRs
Unlike some cards which include an annual fee, some business credit cards are fee-free and have a low APR. Consider cards like the Chase Ink Business Cash card, the American Express Blue Business Cash Card or the Capital One Spark Cash Select for Business card, all of which have 0 percent introductory APR, no fees and low APR once the regular rates kick in.⁵
More to Consider
In addition to annual fees and interest rates, it’s also important to think about what credit limit you require and how often you plan to use the card. If you will not be using it much, it is best to choose a card with a lower credit limit, no or minimal annual fee and lots of side perks such as airport lounge access.
If you plan to use the business card a lot and need a high limit, it’s best to look for a card with the best rewards points program. High spending can lead to accumulating lots of rewards points which can really add up.
Even if you are self-employed or a freelancer, a business credit card can have many advantages for your financial well-being.⁶ As always, it’s good to do your own online research. There are a number of great cards out there. Comparing the different credit cards on the market will help you find the card that is best suited to your business.
[1] https://www.creditcards.com/credit-card-news/business-credit-card-statistics.php
[2] https://www.creditcards.com/credit-card-news/help/7-things-know-business-credit-cards-6000.php
[3] https://www.americanexpress.com/us/credit-cards/business/business-credit-cards/american-express-business-gold-card-amex/45094?linknav=US-Acq-GCP-BusinessCards-ViewAllCards-LearnMore-Gold
[4] https://upgradedpoints.com/reasons-to-get-a-business-credit-card/
[5] https://www.creditcards.com/credit-card-news/best-0-apr-business-credit-cards/
[6] https://www.cardratings.com/small-business-credit-cards/self-employed-reasons-you-need-a-small-business-credit-card.html
