Best Credit Cards for Your Business
Are you a small business owner or in the process of starting one and wondering if you must get a credit card as a contingency plan? Maybe you have already made up your mind to get one but do not know what the eligibility criteria are and which credit will suit your needs.
If any of those questions have crossed your mind at some point, you are in the right place. This article will discuss what business credit cards are, where to get them, and share the top 11 business credit cards available in 2020.
A business credit card can help you run your business operations smoothly, especially when you find yourself in an unforeseen pickle of a situation. If you have a decent business credit history, you can get a credit card that will allow you to:
- Secure new orders and meet their raw material demand.
- Fulfill your in-production orders on time.
- Pay the workforce, vendors, and contractors on time.
- Pay day-to-day business expenses on time, including bills.
- Meet your payment commitments with other business partners.
The need for a business credit card has never been a big deal until the spread of the COVID-19 pandemic. Small businesses have by far taken the hardest hit because of so many restrictions, such as staying at home orders.
The 2020 COVID-19 has been nothing but a nightmare, especially if you are a business that relies on walk-in customers for sales such as retail, Taxi companies, or gym, etc.
The only question is, can a credit card be a feasible option for your small business?
Should You Get a Business Credit Card?
Did you know the Small Business Administration (SBA) has launched an Economic Injury Disaster Loan (EIDL) program? This is an effort to fund and help small businesses cope with the impact of the pandemic.
However, if you still wish to get business credit, you need a good to excellent credit score. Moreover, you get to earn more points based on your business’s day-to-day expenses, such as business lunches, office supplies, etc.
That said, you must think long-term, meaning you are not going to pile on more debt on your business by getting a credit card. Only get one if you really feel that you will be able to meet the monthly payments on time. Else, it beats the entire purpose of getting a business credit card in the first place.
How do you get a Credit Card for Business?
There are several ways you can build your business’ credit rating, and a credit card is one of the easiest of them all. However, getting a business credit card is a tad different than a personal one, and here are some steps you need to follow.
- Credit Score – Know your credit score before applying because your application’s outcome will depend on your personal credit history and credit score. In case you have a slightly low credit score, it would be best to postpone your application for a business credit card. Take your time to improve your credit score and then apply.
- Research – Myriads of options are available when it comes to credit cards for small businesses. Therefore, do thorough research to pick a card that fits your business needs and finances. For example, if your business makes many purchases, you are better at getting a card that rewards you for spending. On the other hand, if your company does not shop around much, then a reward credit card may not do much for you.
- Applying – Once you have picked a card, it is time to apply. However, you must proceed with caution and go through the stipulations, terms, and conditions. Be transparent and honest in the information regarding your business and the revenue. Making false claims can hurt your credit score.
What Credit Score Do You Need for a Credit Card for Business?
It is an understood fact that you cannot secure a credit card without a good credit history and credit score. Moreover, your business must maintain a low debt-to-income ratio.
No matter what type or size of business you are, these two pre-requisites carry the most weightage for issuers to decide whether you grant you a business credit card or not.
In most cases, small businesses need a good to excellent credit score of 700 and above. However, in some cases, you can get a business credit card with a fair credit score between 640 and 699. You have to check with the credit card company about their credit score criteria.
How to get Business Credit Cards for your LLC
Does your business have an LLC formed? You can apply for a business credit card right away. If not, forming an LLC is a pre-requisite to get a business credit card for your LLC. Getting a credit card for your LLC extends more protection than getting one in your personal name.
Several banks allow you to get a business credit card with rewards like cash back, travel rewards, and low interest. However, always check the details with credible lending banks such as American Express, Bank of America, Chase, Citi Bank, Capital One, etc.
Here is a list of information you will require to apply.
- Your Business name and LLC name
- Business address
- Contact info such as email and phone number
- (EIN)or Federal Tax ID number for your LLC
- Your personal Social Security Number (SSN)
- Your personal annual income
- Your business’ annual revenue or income
- Number of employees you have
- Years of business operation
How to Apply
Do some research when applying for a business credit card for your LLC. You can even get several options where the issuer does not charge an annual fee for using the credit card.
Plus, remember, if your business requires you to make regular purchases and get a card with a reward or cashback program, it will help you make the most by earning back as you spend.
Here is the application process in a few simple and quick steps.
- Go to the credit card company’s website, click on apply.
- Enter your business information, LLC name, business type, your Federal Tax-ID number, the number of employees, business category, annual income, and how many years have you been in business.
- Now select your title, enter your name, address, contact details, and personal annual income. Make sure you mention all income and revenue sources to improve your financial portfolio.
- You will also need to mention your date of birth, social security number, mother’s maiden name, and other information. This information may vary by each card issuer.
- Once you have completed the application, review and submit it. You can even add a cardholder to your application, such as a spouse or business partner.
- Always make sure that you understand the terms and conditions before signing the application.
- Once you submit, simply wait for the decision.
There are chances that a credit card issuer may wish to speak to you to clarify certain aspects of your business credit card application. However, mostly it is a secondary protocol to verify the information before they can make it a part of your application and issue a credit card for your business.
Moreover, you can always apply simultaneously for a different card by the same or different issuers. However, always prioritize which ones you really want. Do not worry about frequent credit checks.
It is only a myth surrounding credit cards that lots of hard inquiries can have adverse effects on your FICO credit history or score.
In fact, the inquiries on your credit score have the least impact on your overall credit history. Yes, your score may go down by 3 to 6 points with each application. However, it jumps back up and usually improves within the next couple of months of using your new business credit card.
All you need to do is use the credit card for your business wisely and keep making regular monthly payments and maintain a low due balance.
A quick tip would be to maintain a spreadsheet of all your credit card spends. It is possible and normal for you to mix up the information and perks of each card. Therefore, having them on a file for a quick review will help you maintain financial sanity.
11 Best Credit Cards for Your Business
Here are the 11 best business credit cards that you can apply for in 2020.
1. American Express’s Blue Business Plus
Looking for a business credit card that comes with 0% APR for the first 12 months from the day you open your account? This is the one for you. Moreover, this card by American Express offers an ongoing reward program.
You can get this credit card without paying an annual fee, and the issuer charges a variable APR rate of 13.24% to 19.24%. The credit score requirement for this card is between 690 and 850.
However, it is important to mention here that Blue Business plus credit card will only offer points instead of cashback with a $50,000 cap. Again, if your business has high spending requirements, this card may not be a suitable fit for your needs.
2. Blue Business Cash Card by American Express
First thing first, this credit card for small business comes without any annual fee. Additionally, you will get an introductory offer of 0% APR on all your purchases for the first 12 months of opening your account.
American Express charges regular variable APR rates of 13.24% to 19.24% and ask for a credit score of 690 to 850. Moreover, you get the 2% cashback reward program, meaning earning back as you spend. However, there is a cap of $50,000 on the 2% cashback, so if you are a business with a higher expense, this card may limit your rewards.
3. Brex Card
This credit card is especially for startups and budding entrepreneurs. Therefore, anyone with a poor to excellent credit score, i.e., 300 to 850, can apply and get a Brex Card. You do not need a personal guarantee to get this credit card for your business.
Brex will determine your eligibility by gauging your business’s cash balance, investors’ portfolios, and spending patterns. There is no annual fee, no regular APRs, but you do not get an introductory offer either.
The only requirement is that your business account must have $100,000 in balance. Remember, this is more of a charge card than a credit card meaning you will have to clear your balance in full in each billing cycle.
4. Citi Bank’s AAdvantage Platinum Select
Are you a frequent flying entrepreneur? You can earn 2 miles per dollar spent on all U.S. airlines. You can also earn 2x points for each dollar spent at U.S. cable, telecommunication, satellite services, gas stations, and car rentals.
Additionally, you get to earn 1 mile per dollar spent on other daily purchases. Spend $4,000 in the first four months, and you will unlock the intro bonus of 65,000 miles. There is no annual fee for the first year, and then you pay $99.
Citibank charges a variable APR rate of 15.99 to 24.99%, and you need an excellent credit score of 740 to 850 to apply for this business credit card.
5. Costco Anywhere Visa By Citi
If you have an excellent credit score of 740 to 850 and want a business credit card with maximum rewards, Costco it is. You will get cashback rewards at the gas stations, travel purchases, shopping at Costco, and other purchases.
There is no associated annual fee, and Citi charges a variable APR rate of 15.24%.
6. Delta SkyMiles by American Express
This is an ideal card for frequent flying entrepreneurs and business owners. Not only do you get good deals and discounts on your travels, but you get to earn miles on every dollar you spend. For instance, you will get 3 miles for direct purchase with Delta and 1.5 miles for any other eligible purchases of up to$5,000.
Moreover, you can earn 1 mile per dollar on regular purchases. There is an annual of $250, and American Express charges variable APR between 15.74 and 24.74%. Spend $3,000 within the first year and unlock the bonus of 45,000 fly miles.
7. Ink Business Cash by Chase
Chase offers this credit card for your business with no annual fee and a variable APR rate of variable APR rates of 13.24% to 19.24%. Moreover, Chase also gives you an introductory offer of 0% APR on all your business expenditures and purchases for the first 12 months.
You will require a good to excellent credit score of 690 to 850 to grab this one. This card is the perfect solution to buy your office supplies, pay your business utilities.
You will get 5% cashback on any expenses up to $25,000 at office supply stores and telecommunication services. Moreover, you can avail yourself of 2% cashback on spending at restaurants and gas stations.
8. American Express’ Business Platinum Card
If your business requires you to travel or fly a lot, the Business Platinum credit card is a perfect fit for you. However, the card comes with a hefty annual fee of $595 but get extensive benefits such as 5x points on prepaid hotels and airline ticket purchases.
You also get access to over 1200 airport lounges globally and an annual $200 credit towards incidental airline fees. Moreover, you enjoy elite status at Hilton and Marriott hotels. There are no introductory offers, and American Express charges a variable APR rate of 14.24 to 22.24%
You need a credit score of 690 to 850 to apply for this business credit card.
9. Marriott Bonvoy Business by American Express
If the previous card’s annual fee was a bit too much for your wallet, this credit card charges only a $125 annual fee. There are no introductory offers, and you have to pay regular variable APR rates between 15.74% and 24.74%.
The credit score requirements stand at 690 to 850. The best perk is you get an automatic free night stay every year at Marriott hotels. Moreover, this card offers generous rewards, sign up bonuses, elite status, and much more.
You earn 6 points for each dollar spent at Marriott Bonvoy hotels and 4 points for shopping at U.S. gas stations, restaurants, and telecommunication services.
10. The Plum Card by American Express
It’s the plum card option when it comes to credit cards for your business. This card charges no regular or variable APRs, and there is no annual fee for the first 12 months. After completion of the first year, you will be paying a $250 annual fee.
You can pay your balance early to get a discount or benefit from a 60-days interest-free service. There are no introductory bonuses or offers, and you need a credit score of 690 to 850 to apply. That said, the card is only suitable if you are a business with high spending needs.
11. Spark Cash by Capital One
You will need a credit score of 670 to 850 to apply for a Spark Cash credit card for your business. You can earn unlimited 2% cash back on your everyday business purchases. Spend $4,500 in the first 90 days of getting your card, and you will get an introductory bonus of $500.
Capital One charges a variable APR rate of 20.99% without any annual fee for the first year; after that, you pay $95 per year. There are no foreign transaction charges, and your rewards never expire.
So that is all you needed to know about business credit cards and which ones are the best you can get. However, always be cautious, do some research, and read the terms and conditions before applying for a credit card for your business.
Cary Silverman is a consummate entrepreneur having sold multiple companies during his 20 years of business experience in the financial industry, but for him, it isn’t about the money. His success is rooted in his passion to focus on doing something better today than it was done yesterday. These days, he’s the CEO of Waldo General, Inc. that oversees the operation of King of Kash.