How to Pick the Right Business Credit Card

How to pick the right business credit card

According to the Small Business Administration (SBA), “65% of all small businesses use credit cards on a regular basis, but less than 50% of those cards are actually in the business name.” There are dozens of business credit cards available for small business owners to own in the name of their company, and—if you make the right choice—they can help you free up capital, earn valuable rewards, and track expenses more efficiently. With so many choices, however, how does a discerning company settle on just one? Here are a few of the ways savvy businesses decide which will work best. No matter your industry or financial goals, they can be used to help you cut through the noise and marketing overwhelm.

1. Consider Qualifications

While we may all have dreams of owning a “black” card or other prestige credit account, smart businesses apply for just the cards that will approve them. You can’t always know for sure if you’ll get in, but reading the descriptions of cards and using their credit-worthiness rankings should help. If a card needs you have “excellent” credit, you might reconsider applying if your business credit score isn’t up to par. Likewise, those excellent cards usually come with better perks; those with a stellar credit rating and a history of on-time payments (as well as the revenue to back it up), should aim high and look for cards that reward your responsible credit use.

2. Analyze Intro Offers

What’s an intro offer? It’s a special window at the beginning of card ownership that gets you superior perks, like double miles or zero-percent interest. While you should look at how a card will benefit you for the long-term, an attractive intro offer can help you choose between two very similar cards. Cards are continually upgrading their offers to remain competitive in the marketplace, so if you don’t see an offer that appeals to you now, a better one may be around the corner. Likewise, if there is an incredible buzz surrounding a card, it may be wise to jump on it while you can. The more unbelievable intro terms only come around once every couple of years.

3. Know Your Spending Patterns

The best way to get good value from a business credit card is to take advantage of the many reward programs. Even the best intro offer won’t hold much weight if you can’t find a way to maximize spending to earn cash, miles, or reduce your statement balance. To discover how a card will fit into your overall financial plan, look at your spending for the past year, and categorize charged expenses. Do you spend the most on travel? Do you have significant fuel costs? Are you loyal to one supplier, wholesaler, or airline? By looking for patterns in purchases, it is easier to see where you can earn the most in rewards with the right card.

4. Understand Unadvertised Perks

For most of the top business credit cards on the market, their intro offers, annual fees, and rewards programs are the biggest selling points. This doesn’t mean you shouldn’t research other ways to get good value. Some of the best business cards have unadvertised benefits that are contained in their cardholder terms but may not be prominently featured on their landing pages. Extras such as purchase protection, extended warranty, TSA-precheck credits, or rental car coverage are commonly contained in the member guides of cards but not always actively promoted. Don’t judge a card by its cover; do a little digging to see what other goodies are available for cardholder before you choose.

5. Skip the Fees

Annual fees are starting to diminish in popularity, and many prominent business cards don’t charge them at all. Others are willing to skip them the first year to help you get acquainted and overcome your objections to card ownership. With most business card fees ranging from $95 – 125, they are on par with some of the top consumer cards available today. If you really love the benefits of a card but hate the idea of paying fees, try it out for a year (with the fee waiver) and see if you earn your money back. Most will, and it’s also possible to call your card customer service rep near your renewal date and ask for a fee waiver a second year. (They won’t always give it to you, but not many ask; it’s sometimes a small price for card companies to pay to keep your business.)

6. There’s No One Card to Rule Them All

Finally, it’s a bit naïve to think that you should run your entire business with just one card. While many small companies do start out with a single card (especially if they are building credit and can only qualify for one at the time), owning multiple cards has a place. If you love American Express, for example, but know that not everyone takes them, it’s smart to double up with a solid VISA or MasterCard. If you fly often, an airline mileage business credit card makes sense, but only when you can use your warehouse retailer card for those office supply purchases. There’s no reason to limit yourself to what just one card has to offer. Explore your options and—even if you’re completely satisfied with the card you already own—know what’s available. Adding a card to your arsenal for certain purchases just makes sense. Often, the first step to picking a card is to know your bargaining power. The better your business and personal credit scores, the more advantageous a position you’ll be in when selecting cards. If you’re on the edge of getting an approval for a premium card, consider waiting a few months until you can bump up your score. There are some things you can do to raise your credit profile; doing even a few of them can put you into a pool of qualified applicants for the best business credit cards with the most competitive offers and reward systems.


By Linsey Knerl

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