What’s the Best Small Business Credit Card for Your Company?

A small business credit card is a tremendous asset. Your company will be able to better track finances, control employee spending and gather extra capital. This practice is a quality solution for businesses looking to simplify their month-to-month expenses. When getting a small business credit card, you certainly have options – such as secured, unsecured and prepaid.

This article will explain how each card type differs. Figure out what kind of small business credit card is right for your company. After that, check the list below to decide which of the currently available credit cards seem like your ideal choice.

Now, let’s begin… Unsecured vs. Secured Small Business Credit Cards

An unsecured credit card for small businesses is not so common. The unsecured factor means that no collateral is required to get approved. Most small businesses are new and just starting to grow. They don’t have the credit history necessary to qualify for an unsecured card. Likewise, corporate credit cards are typically sought out by medium to large-sized businesses.

There is only one way you will only qualify for an unsecured small business credit card. You, the small business owner, will accept personal liability to become eligible. This decisions means you allow the card issuer to report on your personal credit file. If you ever miss a payment or if you default on the card, this will severely drag down your own credit.

Instead, a ewer company will often look into a secured small business credit card. These cards require a deposit, which is typically 100 to 110% of the credit limit. A secured small business credit card is possible for any business since the collateral leaves the lender risk-free.

The great thing about a secured card is that it can help build your business’s credit. However, many of these cards do not get reported to business credit bureaus. You must make sure the card you choose does. Otherwise, you will be unable to grow the credit-worthiness of your small business. If you make this effort, eventually you can get rid of the personal liability that comes with having businesses credit cards.

Prepaid Business Credit Cards – Worthwhile or Not?

Some small businesses find an interest in prepaid credit cards. These also require a deposit, or funds in a linked savings account. The big advantage here is that creditworthiness is not a factor; these cards are not reported to any bureaus. It is a straightforward way for businesses to perform credit card transactions, that’s it.

Most prepaid options come with a set fee per card. These costs can get pricey, but are often eliminated or discounted if you spend a sufficient amount each month. The only other issue is that you might find yourself paying a foreign transaction fee. This cost is sometimes non-existent in traditional secured and unsecured small business credit cards.

On the plus side, you gains considerable control over your employee cards when you choose a prepaid provider. The added value that comes from these companies is seen in how they let you handle employee spending controls. For example, take a loox at PEX Visa which gives you the ability to:

  • Control spending limits by day, week or month,
  • Set different spending limits by employee,
  • Freeze a specific cardholder,
  • Add automatic or manual fund top-ups, and
  • Specify the types of stores where each employee can shop.

In the long term, a traditional small business credit card is still recommended. You should try to build up your business as credit so you can qualifier for more financing and better interest rates. This capital access is what can empower you with the ability to scale your business fast.

The Best Small Business Credit Cards

Take the time to compare your options and make sure to read the fine print. Factor all the different possible fees, what the interest rate costs you, the value of the rewards and more. This process can be tricky but a little effort will go a long way.

You can save time by checking out Value Penguin’s business credit card rankings to compare the many options on the market today. This site uses standard calculation methods to decide the value behind each particular small business credit card. You will be shown how to extract the maximum value. This information signifies whether the card is particularly rewarding for your business.

Alternatively, check out our list of the top small business credit card products by category. This list will help you determine the top value

Best Credit Card for Small Business Travelers

Many small businesses require employees to travel for work. The transportation and hospitality expenses can seriously add up. If your company is invested in airfare, car rentals or hotel reservations, then a small business travel rewards credit card is invaluable.

Of all the options, for many years the Starwood Preferred Guest card from American Express has lead in this category. You should seriously read up on what it offers your business – beyond the basic rewards, many other great cardholder perks also apply.

Starwood Preferred Guest from American Express

Starwood Preferred Guest is a long-time leader. This secured business credit card provides the best cashback incentives for businesses that regularly spend on traveling and hospitality. Their annual fee is $0 for the first year and $95 thereafter. The intro offer for the first three months scores you 25,000 Starpoints after $5,000 in purchases. This offer is worth approximately $375 to $500, but it varies depending on your redemption method.

Cardholders receive one starpoint per dollar spent on general purchases, two starpoints for Marriott Rewards hotels and five starpoints for eligible SPG hotels. The Starpoints awarded for being an SPG member also get applied, this providing up to seven Starpoints per dollar spent. As an additional bonus, you get Boingo Wi-Fi for four devices. This service gives you unlimited Internet at more than one million places worldwide.

Businesses that spend $50,000 at participating hotels could receive as much as $4,000 in annual rewards. Employee cards are available with no annual fee, which means travel-intensive companies can really rack up their rewards. Once $30,000 is spent in a calendar year, you receive SPG Gold status. A Gold Preferred Guest gets 50% more on Starpoints for their hotel reservations, free late checkout, welcome gifts and much more.

The businesses that spend heavily on airfare or hotel reservations will benefit most from this particular credit card.

Best Credit Card for Small Business with Heavy Spending

The right small business credit card for a company that has high costs is one which rewards cashback on everything. You should also look for a premium reward on certain purchases. For instance, the Starwood small business travel card offers greater incentive for your travel related purchases. Look at where your business spends the most and find a card that rewards you lucratively for doing so. When it’s an even distribution between shopping categories, look for a universally rewarding small business cashback credit card.

SimplyCash Plus Business is one of those widely valued cards, it’s worth checking out.

SimplyCash Plus from American Express

An all-around small business rewards credit card that incentivizes big spending is the SimplyCash Plus Business Credit Card from American Express. This particular card rewards 5% cashback on up to $50,000 in annual spending on office supplies and wireless services. The card also comes with eight 3% cashback categories to choose from – you can get this rate for your advertising, airfare, gas, hotel reservations, restaurant trips, shipping, software or hardware transactions. Any other purchases come with a 1% cashback reward.

What does this all mean for a small business that spends a lot? If $50,000 is spent at an office supply store in a year – that business would get a $2,500 kickback. Add the other spending and you could see thousands more. The reward really comes down to the amount your business can transact on the card.

The fees are also amazing with the SimplyCash Plus Business Card. There’s no annual fee and it’s free to add employee cards. Furthermore, the APR rate is 19.99% on standard purchases and 21.99% on cash advances.

Best Small Business Credit Card for Office Purchases

Every small business will spend some amount on office supplies, software and hardware purchases. These credit card transactions are particularly rewarding with certain cards.

The Chase Ink Plus Business Credit Card

Arguably, the Chase Ink Plus Card is the best small business credit card for purchasing office supplies. This card gives you a flat 5% back via reward points for any office supplies. Also included at this reward rate is phone, Internet and television services.

You will receive 5% rewards on up to $50,000 ($2,500 back) in spending each year within those categories. The same cap applies for 2% rewards on hotel and gas purchases. Beyond that amount, and for other purchases – all transactions come with a 1% cashback reward.

Another huge plus is the signup offer. New cardholders receive 60,000 points once they spend a minimum of $5,000 with their card, within the first three months. These points convert to an estimated $750 in rewards. This card gains you access to the Chase Ultimate Rewards program.

The only downfall with this card is the high $95 annual fee. On the plus side, there is no charge for additional cards for your employees – and there’s also no foreign transaction fee.

Best Secured Small Business Credit Card

A business without adequate credit will need to compare the best secured small business credit cards instead. When trying to find a secured small business credit card, the weighing factors are mostly the same. The difference is that cashback rewards are not as common with secured cards. However, you can get a flat rate cashback incentive through the Wells Fargo Business Secured Credit Card which makes it a premium choice.

Wells Fargo Business Secured Credit Card

This card from Wells Fargo is a straight up winner. You receive 1.5% cashback and 1 reward point on all your purchases, regardless of the shopping category. This perk makes this card favorable over other secured business credit cards that don’t offer cash back. The difference is $1,500 in cashback for every $100,000 in purchases. The supplementary reward point is worth approximately one cent for every $1 spent. Plus, cardholders that spend at least $1,000 in a month receive 1,000 free points.

Your cashback is available as an instant statement credit. You opt in for the cashback reward or choose to receive points instead. Both equal to a roughly 1% spending incentive. The only negatives are the card’s $25 annual fee and high 3% foreign transaction charge. The $50 rewards program fee each year is waived for business cardholders.

You can add up to 10 employee cards at cost of $25 annually per card. You can view spending reports from your online dashboard. The card limit is $500 to $25,000 based on your supplied collateral. You must put up 100% collateral – unlike some other secured business cards which require a 110% deposit. This card also features a 19.99% APR on purchases and balance transfers.

Furthermore, you can customize your Wells Fargo Business credit cards with the Card Design Studio® service. You can add branding from your company, such as your business logo, to each of your credit cards. Your small business’s name and the name of each employee will also be printed separately on each card.

Conclusion

Deciding which is the best small business credit card will not be a simple task. This ordeal requires considerable thinking and strategizing in how your business shops. Using the card for the right purchases can mean thousands more in rewards.

Ultimately, a credit card is already pretty important – but with the best business credit cards, they are less liability and more incentive. Take the time to find the best credit card for small businesses like yours, don’t just choose the first one you come across.

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