The post Best Business Credit Cards for Startups by Suzanne Kearns appeared first on Benzinga. Visit Benzinga to get more great content like this.
Quick Look at the Best Business Credit Cards for Startups:
- Best for No Personal Guarantee: Brex 30 Card
- Best for Businesses with Employees: Ink Business Cash® Credit Card by Chase
- Best for No Preset Spending Limit: Capital One Spark 2% Cash Plus
- Best for Business Travel: The Business Platinum Card® by American Express
- Best for Miles Rewards: Capital One Spark 2X Miles
- Best for Short-Term Loans: The Blue Business® Plus Credit Card from American Express
- Best for Cash Back: Ink Business Unlimited® Credit Card by Chase
Finding the right business credit cards for startups is a crucial step when opening a business. You will need access to credit as your business grows, and one of the best things you can do as a fledgling business is to establish business credit so that when you need a loan, your credit score will enable it. Additionally, as a new business owner, you will need to do all you can to save on expenses, and the right card will help you do that.
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Benzinga has researched the best business credit cards for startups and presents the list below.
1. Best for No Personal Guarantee: Brex 30 Card
When you’re just starting a business, or running an existing one, it’s difficult to find a business credit card that doesn’t require you to sign a personal guarantee. If you sign one and your business gets into financial trouble, you will be held personally responsible to pay any outstanding bills. But when you open a Brex 30 Card, the credit card issuer does not require you to personally guarantee the debt that your business takes out. The card issuer also issues the credit cards without performing a credit check. The only drawback to this card is that to qualify, you must have a linked bank account to the card and that bank account must have a balance of at least $50,000.
2. Best for Businesses with Employees: Ink Business Cash® Credit Card
If your business is growing and you need your employees to have a credit card tied to your business, the Ink Business Cash® Credit Card is a great choice. Issued by Chase, this credit card allows business owners to give a card tied to the business to each employee that needs it – but without the typical additional card fees. Because this credit card is a rewards card, each employee that uses a card will contribute to the rewards pool, helping your business use the cash back or miles rewards to save on business expenses.
3. Best for No Preset Spending Limit: Capital One Spark 2% Cash Plus
For business owners with the need to pivot financially or have access to credit at all times, the Capital One Spark 2% Cash Plus credit card is a winner. The card issuer does not have a preset spending limit, which means the card limits will adapt to your spending habits, credit profile and payment history. Having a card like this in your business wallet can equip for those unexpected things that pop up when running a business. To qualify for this card, you must have an excellent credit score. Cardholders must pay off their balance in full each month.
4. Best for Business Travel: The Business Platinum Card® by American Express
If you plan to do a lot of traveling with your business, the right credit card can help you save on expenses with travel rewards and other perks related to travel. The Business Platinum Card® by American Express offers business owners a ton of rewards to help cut travel expenses. In addition to miles, the card offers perks that make traveling less expensive and more comfortable. The only drawback to this card is the relatively high annual fee, so be sure you plan to travel enough in your business to ensure that the annual fee is worth it.
5. Best for Miles Rewards: Capital One Spark 2X Miles
Capital One Spark 2X Miles Business Credit Card
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22.49% variable
The Capital One Spark 2X Miles Business Credit Card is a good way for businesses to earn unlimited rewards on all purchases and get travel credits. You can redeem your travel rewards with Capital One, and you can save for future travel for as long as you need. With no annual fee for the first year, you also put some cash back in your pocket when you sign up.
- Annual Fee:
$0 the first year, then $95 thereafter - Rewards:
Earn unlimited 2X miles on every purchase. - Welcome Bonus:
Earn a 50,000 miles bonus when you spend $4,500 in the first 3 months.
- $0 annual fee
- $100 travel credit
- Redeem travel rewards with Capital One
- Relatively high interest rate
If you plan to travel for your business but don’t want to pay a high annual fee, the Capital One Spark 2X Miles credit card could be right for you. As you spend money for your business on the card, you will earn miles that can be used for flights, hotels and car rentals booked through Capital One Travel. The great thing about this card is that your ability to earn miles is unlimited, so if you travel a lot, the miles can really add up quickly – and be there when you want to use them.
6. Best for Short-Term Loans: The Blue Business® Plus Credit Card from American Express
When you’re running a business, your need for cash will be greater than ever. But instead of taking out a bank or credit union loan, you can use a business card like the Blue Business® Plus Credit Card by American Express. Because the card charges no interest for the first year you own it, you can treat the card like a short-term bank loan and save your new business the expense of all that interest. Just be sure to pay off the balance before the interest kicks in to reap the rewards.
7. Best for Cash Back: Ink Business Unlimited® Credit Card by Chase
If you want a simple business credit card that allows you to earn cash back on all your business expenses, the Ink Business Unlimited® Credit Card by Chase is a great option. This credit card does not have complicated cash-back requirements or extra rules to keep up with. Instead, you can use the card for all your purchases and earn cash back. Then, you can apply the rewards to your credit card statement and save on business expenses, or you can choose to apply them toward business travel. The rewards never expire, so every time you use the card for business purchases, you can be sure that you will reap the financial rewards later.
Why You Should Use a Business Credit Card
For new business owners, business credit cards have a lot of benefits. Used correctly, they can greatly improve a few areas of your business.
Build Your Credit Rating
When you use business credit cards, it will help build your business’ credit rating. That’s important because as your business grows, you will need access to credit to fund its growth. But remember, just as it’s true with personal credit scores, you have to make your credit card payments on time each month. The credit card issuer will report your on-time – or late – payments to the credit reporting agencies.
Protect Your Personal Credit
When you apply for a business credit card, your personal credit score will take a hit from the application, but after that, your business credit card won’t affect your personal score. That’s because the balance you carry on your business card is parked on your business credit score. So, if you carry a large balance, it will not affect the credit utilization on your personal score.
Keep Expenses Separate
It’s considered best practice to keep your business expenses separate from your personal ones, and a business credit card will make it easy. For instance, if you charge all of your business expenses on your business credit card, it will make it easy to reconcile them at tax time. And many business credit cards offer solutions that allow you to transfer your business expenses to your accounting software.
Cut Back on Expenses
When you use business credit cards that offer cash back or travel miles, you can use the cards to help pay down your business expenses. For instance, if you travel in your business, the miles you earn while purchasing things on your business credit card can be used for business trips to help pay for flights, hotels and rental cars. And if you choose a cash-back business credit card, the cash back can be applied to your statement balance to reduce your overhead.
Business Credit Card Comparison
U.S. Bank Triple Cash Rewards Visa® Business Card
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15.49% to 24.49% | See Rates and Fees
The U.S. Bank Triple Cash Rewards Visa® Business Card offers you a robust rewards package, no annual fee and low rates. You can transfer balances to the card with a 3% fee and there is a foreign transaction fee of just 3%. You also get a low intro APR and a strong welcome bonus to help you make the most of the card.
- Intro APR:
0% APR on purchases and balance transfers for 15 billing cycles - Rewards:
3% cash back on eligible purchase categories (gas stations, electric vehicle charging, office supply retail, cell phone service providers, and restaurants.) 5% cash back on prepaid hotel and vehicle rental reservations made directly via the Travel Rewards Center. 1% cash back on every other eligible purchase. $100 annual statement credit for software subscription expenditures. - Welcome Bonus:
Earn $500 in cash back by spending $4,500 within the first 150 days.
- No annual fee
- Balance transfer options
- 3% cash back on eligible purchases
- High balance transfer fee
Amazon Business Prime American Express Card
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14.99% – 22.99% Variable | See Rates and Fees
Amazon Business Prime American Express is a good choice for businesses that spend heavily on Amazon and its related products (AWS and Whole Foods). The card offers 5% cash back for purchases made at Amazon.com, AWS or Whole Foods. There’s also the option of switching the cashback reward for a 90-day 0% APR financing on any eligible purchase.
- Annual Fee:
None - Rewards:
5% of the first $120,000 spent or 90-days term purchases at Amazon and related products, then 1% back on other purchases - Welcome Bonus:
Up to $125
- No annual fee
- No foreign transaction fee
- Free employee cards
- Requires Amazon Prime membership
- No intro APR
- Relatively higher APR
American Express Blue Business Cash™ Card
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14.74% – 22.74% Variable based on your creditworthiness and other factors determined at the time of account opening | American Express Blue Business Cash™ Card – Rates & Fees
The American Express Blue Business Cash™ Card offers no annual fee and 2% cash back on all eligible purchases up to $50,000 and 1% after that. With a 0% intro APR and affordable rates thereafter, this card helps your business get its footing and manage spending. Remember, the amount you can spend above your credit limit is not unlimited. It adjusts with the use of your card, payment history, credit record, financial resources known to AMEX and other factors.
- Annual Fee:
$0 - Intro APR:
0% on purchases for 12 months - Rewards:
2% cash back on all eligible purchases up to $50,000 per calendar year and 1% on all other purchases. Cash back earned is automatically credited to your statement.
- No annual fee
- 0% intro APR
- Need good – excellent credit
- Caps on bonus
Capital One Spark 2X Miles Business Credit Card
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22.49% variable
The Capital One Spark 2X Miles Business Credit Card is a good way for businesses to earn unlimited rewards on all purchases and get travel credits. You can redeem your travel rewards with Capital One, and you can save for future travel for as long as you need. With no annual fee for the first year, you also put some cash back in your pocket when you sign up.
- Annual Fee:
$0 the first year, then $95 thereafter - Rewards:
Earn unlimited 2X miles on every purchase. - Welcome Bonus:
Earn a 50,000 miles bonus when you spend $4,500 in the first 3 months.
- $0 annual fee
- $100 travel credit
- Redeem travel rewards with Capital One
- Relatively high interest rate
Delta SkyMiles® Reserve Business American Express Card
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17.24% – 26.24% Variable | Delta SkyMiles® Reserve Business American Express Card – Rates & Fees
This card is perfect if you plan on using it frequently and to make large purchases. Travel benefits available with this card include mile bonuses for big spenders (1.5x on purchases after you spend at least $150,000 in a year).
- Annual Fee:
$550 | See Rates & Fees - Minimum Payment:
1% – 2% of the statement balance + fees and interest, or $40, whichever is greater - Welcome Bonus:
110,000 bonus miles and 10,000 Medallion Qualification Miles when you spend $6,000 on your card in first 3 months
- Complimentary seat upgrades
- Priority booking
- Annual fee
Wells Fargo Business Elite Signature Card®
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7.99% Variable | See Rates & Fees
The Wells Fargo Business Elite Signature Card® has a simple yet highly generous cashback reward for businesses with high-volume sales. The card’s rewards program is perfect for companies with a sales volume of over $1 million that need to keep track of their employee expenditures and report on it.
- Annual Fee:
$125 (waived in the first year) - Rewards:
Unlimited 1.5% cash back on every $1 spent or 1 point on every $1 spent - Welcome Bonus:
$1,000 cash back or 100,000 bonus points for the first $15,000 spent within the first three months
- No foreign transaction fees
- Up to 200 zero-cost employee cards
- Generous benefits and add-ons, like travel insurance
- Annual fees
- Restricted quarterly redemption of cashback rewards
- Transaction fees apply for a balance transfer
Wells Fargo Business Secured Credit Card
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Variable based on the prime rate
Wells Fargo first began in the early 1850s to help businesses manage money. Today, the company offers a wide range of financial services and banking. The secured credit option requires a security downpayment that increases with the requested credit line. For example, a maximum credit line of $25,000 would require a $25,000 deposit. Currently, the card offers a prime rate on cash advances near 20.74%, but that prime rate changes to around 11.90% on purchases.
- Annual Fee:
No annual fee - Minimum Payment:
About $500 deposit - One Time Fee:
Security deposit depends on the amount of the credit line - Intro APR:
Not stated - Rewards:
Yes, with points
- Offer credit line up to $25,000
- Provide 1.5% cash-back for certain purchases
- Rewards point option
- Wells Fargo Business card applications not accepted in Wells Fargo Branches
- Must already have a Wells Fargo business checking or savings account
How to Open a Business Credit Card as Startup
Applying for and opening a business credit card is almost the same as applying for a personal credit card – with a few differences. If your startup needs a business credit card, here are the steps you should take to open a new account.
Understand Your Credit Score
Even though you plan to apply for a business credit card, the credit card issuer will use your personal credit history when considering your application. As a startup, you haven’t yet built a business credit history, so it’s important to understand your score before you apply for a card. You’ll understand this logic in the next step.
Decide Where to Apply
You have many options when it comes to applying for a business credit card, but to protect your credit score, you don’t want to apply to them all at once. That’s because each time you apply, your score takes a hit. And if you apply to a lot of cards at once, it can be a red flag for credit card issuers. Instead, you need to be methodical about selecting the right cards.
The first thing you should look at is the minimum required credit score for the card. Each business credit card has a minimal credit score that it will accept on an application, and if your personal credit score is lower, you won’t be approved for the card. It’s a great way to reduce the number of potential cards.
Next, look at the rewards, perks and fees for each card. Every business has different needs, and you should consider what you want from your business card. Do you want miles to use for business travel, cash back to help pay your expenses or a business credit card with a low APR and no annual fee?
Submit Your Application
When applying for a business credit card, you will have to answer the same personal questions as you do on a personal credit application, plus some specific questions about your business. For instance, in addition to your name, social security number, address and telephone number, you may be asked how long you’ve been in business, how many employees you have, your business name, the state in which your business was formed and your business address.
Once you’ve submitted all of the information, you’ll be notified of your approval, usually by email. Some credit card issuers provide an approval in as little as a few minutes.
Frequently Asked Questions
Who can apply for a small business credit card?
You don’t have to run a large business to apply for a business credit card. Anyone who earns income as a business can apply for a business credit card, including freelancers, people who have a side hustle, small business owners, independent contractors and gig workers. If you sell goods or services, you are eligible to apply for a small business credit card.
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Can I use my business card for personal use?
While it’s not against the law to use your business card for personal use, it can complicate your taxes. To avoid improperly filing your business taxes, be sure to deduct any personal charges from the total so you don’t accidentally claim personal expenses as business expenses.
Additionally, when you sign up for a business credit card, the card issuer may ask you to sign an agreement that states you will only use the card for business expenses. In the worst case scenario, the credit card issuer may cancel your card if you use it for personal expenses.
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Can you use an EIN to get a credit card?
If your business has an Employer Identification Number (EIN), the credit card issuer may ask you for the number on your application. But if you are a sole proprietor, you can also use your social security number. While not all small business credit card applications ask for an EIN, they do ask for a social security number.
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The post Best Business Credit Cards for Startups by Suzanne Kearns appeared first on Benzinga. Visit Benzinga to get more great content like this.
