Business Credit Cards
Business credit cards can be a useful tool for the small business owner and in fact are often the first form of financing pursued by many small businesses. Types of business credit cards tend to fall into two buckets – those that offer various forms of rewards tied to traditional business expenses and spending habits, and those business credit cards that offer fewer rewards but come with comparatively lower interest rates.
In both instances, business credit cards serve the important function of separating business expenses from personal expenses while also laying the groundwork for a more efficient experience when it comes time to file taxes. The specific needs and spending patterns associated with a particular small business will dictate which type of business credit card that business should pursue. Let’s take a closer look.
Business Credit Cards - Generous Rewards or Low Interest Rate?
If a small business is relying upon its business credit card line of credit for working capital purposes, then it will make sense to lean in the direction of a card with a lower interest rate, regardless of the rewards perks that will be foregone. The simple reality that the card will be used for financing and working capital rather than general purpose spending indicates that there will be an ongoing debit balance, so it only makes sense to reduce the interest expense associated with the usage of the card over time by pursuing a business credit card with a low interest rate.
Conversely, when a small business has a well-defined spending pattern on office supplies, travel, and the occasional large ticket item, it can make tremendous sense to seek out the business credit card with rewards that are most closely aligned with those spending habits. Business credit cards with generous cash-back and travel rewards programs, for example, can make tremendous sense for the small business owner who can earn cash back and associated perks without altering an existing expense pattern.
Who Should Apply for a Business Credit Card?
Any business owner – large or small – can reap the benefits associated with the usage of a business credit card. A more obvious candidate may be a small business owner who spends significant amounts on office supplies, but sales consultants who travel frequently, as well as independent consultants who entertain clientele, are also viable candidates.
Doctors, dentists and physical therapists who run their own practices and have predictable expense patterns can benefit. Even freelancers, who at times are subject to their clients’ inability to pay for services in a timely manner, can benefit from the security associated with a business credit card, knowing that their own expenses will be manageable when cash flow hits a short-term bottleneck.
Finally, the large business owner who wants to purchase an expensive piece of equipment can look to a high-limit low-introductory rate APR business credit card to finance a big-ticket purchase over many months in lieu of pursuing a small business loan that would likely prove more expensive.
Do Your Own Research
Before applying for a business credit card, it is important to conduct proper research for the card that best suits your needs. The three most important elements to evaluate when considering a business credit card are the quality of the rewards program, the annual APR, and the annual fee associated with the card. Rewards vary from card to card and take the form of points redeemable for goods and services or a fixed percentage of cash back (as high as 5%) on purchases.
Most annual APRs will be 12% or higher, though there are more than a few introductory 0% and low-interest rate promotional business credit cards that are worth pursuing for big-ticket purchases in the range of $50,000 and up. Meantime, annual fees as high as $500 can pose a surprising deal-breaker in some cases, and it is important to evaluate whether the rewards and benefits gained through usage of the card can justify applying for a card with a significant annual fee.
Three Business Credit Cards Worth Investigating
The Chase Ink Business Cash Card offers several advantages, including a 0% promotional APR for 12 months, along with $500 cash back when a cardholder spends $3,000 within the first three months from the date of opening the account. Furthermore, the card has no annual fee and offers 5% cash back at office supply stores as well as on internet, phone and cable services, as well as 2% back from gas stations and restaurants and 1% back on all other purchases.
For small business owners, the SimplyCash Small Business Credit Card from American Express offers a 0% introductory APR for 15 months, has no annual fee, and offers 5% cash back at office supply stores and on U.S. wireless service, as well as 3% cash back on the category of your choice including airlines, hotels, gas stations, restaurants, etc.
For larger businesses with larger expenditures, The Business Platinum Card from American Express can be an excellent fit. Though this card comes with a $450 annual fee, the rewards potential is substantially enhanced for those who travel frequently and spend between $10,000-$20,000 within the first three months of issuance. Rewards points can be quickly and easily redeemed for business class and first class airfares, hotel stays, and access to over 1,200 American Express Lounges located in airports in over 130 countries.
Are you in debt? we can help
Dealing with high interest auto loan debt was difficult for me and my wife
Dealing with high interest auto loan debt was difficult for me and my wife. We thought we got a good deal, but it actually was a horrible loan. So, we reached out to United Settlement, and they got to work...
No one really wants to go bankrupt, and neither did my family
No one really wants to go bankrupt, and neither did my family. But fortunately, we did not have to go that route. It was our last resort, but United Settlement helped us figure out a way around bankruptcy...
I had been through about 5 different credit counseling agencies before I found United Settlement
I had been through about 5 different credit counseling agencies before I found United Settlement. I had read through their reviews and made the decision to move forward with them. I also was so impressed...
As a business facing some unwanted financial difficulties
As a business facing some unwanted financial difficulties, we were at a loss for what to do next when our debt started to soar. We took a closer look at our financial situation by contacting United Settlement....
I had no clue how to create a debt management plan
I had no clue how to create a debt management plan and in fact, I didn't even know what a debt management plan was. Fortunately, I reached out to United Settlement before I had too much debt to tackle....
Being burdened by debt is one of the biggest struggles we faced as a family
Being burdened by debt is one of the biggest struggles we faced as a family. But these people at United Settlement were very helpful in deciphering the different debts we had and then coming up with a debt...
Student loan debt was my worst enemy before I ran into United Settlement
Student loan debt was my worst enemy before I ran into United Settlement. I really thought I would just have terrible credit for the rest of my life because I will never get out from underneath it. It was...
I never thought about settling our credit and auto loan debts
I never thought about settling our credit and auto loan debts. I honestly thought the only way out of our situation was to go bankrupt. But that all changed when we reached out to United Settlement. We...
We were dealing with extremely high-interest rates on debt
We were dealing with extremely high-interest rates on debt. That made it difficult to make improvements in what we owed. We were pretty much devastated. By our debt because we really wanted to buy a house...
Auto loans are my family’s biggest problem
Auto loans are my family’s biggest problem. Sure, having them is a necessary evil in our modern era. We spent years trying to pay our auto loans off. But the problem was, we never could make headway....
Bankruptcy was not an option I wanted to use
Bankruptcy was not an option I really wanted to use. I wanted to find an alternative to this process that would enable me to get rid of my debt for good without having a bad mark on my credit history. That...
United Settlement was there for me when I could not be there for myself
United Settlement was there for me when I could not be there for myself. I was not sure how to move forward when I had a massive amount of debt. I could not figure out how to get out from under the seemingly...
I had no idea that I could reorganize my utility builds or residential leases
I had no idea that I could reorganize my utility builds or residential leases. But United Settlement helped me see that I could. They were very friendly in telling us about what our options were as a family...
Everybody knows how ridiculous student loans are
Everybody knows how ridiculous student loans are, and that was not lost on me when I chose to take out hundreds of thousands in student loan debt. Relieving a measure of pressure for my student loans was...
Restructuring business debt is not an easy thing to do
Restructuring business debt is not an easy thing to do. But United Settlement was great at helping me figure that out. Understanding financial situations and goals was what I really wanted, and they did...
I had no clue that I was paying more than 100% APR on my small business loan
When I reached out to United Settlement, I had no clue that I was paying more than 100% APR on my small business loan. I could not believe it! But I was paying that much which meant I could not ever get...
Handling my business debt was not something I looked forward to
Handling my business debt was not something I looked forward to. But United Settlement was so patient with my questions and helped me figure out how to handle my debt as a small business owner. I qualified...
I didn't even know what type of interest rates there were and how those affected my debt overall
When I contacted United Settlement, I didn't even know what type of interest rates there were and how those affected my debt overall. So, when I went to go buy a new house, I was shocked to find out that...
Debt settlement is what we signed up for when we were interested in using United Settlement
Debt settlement is what we signed up for when we were interested in using United Settlement. We needed a company to negotiate on our behalf to help us reduce the total amount of debt we owed, and we were...
I had no idea that I could lower my credit card interest rates. But when I contacted United Settlement, they explained to me that I could negotiate my interest rates down lower along with my payoff balance....