TOP 5 Business Credit Cards

The financial needs of small business owners are as varied as the businesses themselves. The right business credit cards can help these small businesses grow, but the key is finding one that offers the right combination of financial tools, benefits and resources.

Editor’s Choice

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Flexibility counts for a small business owner who understands his needs will evolve as his company grows. Those card networks that can recognize this and then strive to provide a financial product that combines low fee structures, less red tape during the approval process and, of course, attractive perks and benefits serve as the criteria that determines our Editor’s Choice.

4 More Competitive Business Card Choices

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Access to small business loans via traditional avenues is becoming more difficult to find. Many small business owners whose banks will consider these types of loans often require an overwhelming amount of documentation and paperwork – and if it’s a new business, it’s even more frustrating. That’s why we stress the importance of versatility as a business owner will often use his credit card for a multitude of financial needs.

Business Cards vs. Business Loans

A 2011 survey by the National Small Business Association reports business credit cards are the most common financing source for small business owners in the U.S. Further, half of all business owners report they consider their credit cards the first source of financing – that’s up from 16% from the previous two years.

As mentioned, a business loan isn’t always available to a small business owner in a timely manner. The turnaround time can sometimes be as much as three weeks. That doesn’t bode well for a new company trying to make a name for itself in the community. Often, a business credit card not only meets those needs, but does so in a much faster timeframe. This makes them a fine – not to mention the first – choice for many. Also, the satisfaction rate among small business credit card owners is generally higher than their consumer counterparts.

Don’t underestimate comparison shopping, either. You’ll want to compare interest rates, grace periods, fees for cash advances and the repercussions of a late payment – just to name a few.

Tips for Business Credit Cards

  • Even if you’ve just made the leap into a new business, you’ll want to have your bank accounts established before you apply for a business card.
  • Don’t assume the same bank that holds your business checking accounts will offer you the best rate for your credit card needs. Consider the offers from the actual card companies.
  • Before you apply, take a realistic look at your needs. Do you expect to travel in the first two years or is your clientele localized? If you’re traveling, a travel rewards card might be your best choice.
  • Will you be using your business card for office supplies, printers and computers? Give cash back business credit cards serious thought. It could be a great way to improve your bottom line.
  • Will you be the only authorized user? If not, you might want to request additional cards.
  • Have a fleet of automobiles? Consider a gas rewards credit card offer.
  • Don’t forget to check for annual fees as they can be hefty.
  • If you don’t have a tax ID number yet, you can still apply using your social security number. Keep in mind, though, that will require a credit inquiry using your personal information.

The Downside of Business Credit Cards

Unfortunately, business credit cards aren’t covered in the 2009 CARD Act. The Consumer Financial Protection Bureau is currently working on authoring new bills that will put better protections in place, but until that happens, you might find fewer safeguards.

Conclusion

Of course, it’s not necessary to take out a new credit card when you open your business, but the buying power they provide, especially considering you’re likely learning as you go. There are unexpected expenses that pop up in every business and most certainly a new company. Understand your spending habits, too. Remember a charge card will likely require you to pay your balance in full each month. The benefits, though, can sometimes be better than what traditional credit cards offer. As your business grows, your needs will grow as well, so keep that in mind, too.

Have you had any personal experience with Business Credit Card?


 
 

Advertiser Disclosure

CREDIT DAD is an independent, advertising-supported website. Many debit cards, credit cards and other financial offers that appear here are from companies from which CREDIT DAD Websites receive compensation. This compensation may impact how and where products appear on this website (including, for example, the order in which they appear). CREDIT DAD Websites do not include all card offers in the marketplace.

Advertiser Disclosure

CREDIT DAD is an independent, advertising-supported website. Many debit cards, credit cards and other financial offers that appear here are from companies from which CREDIT DAD Websites receive compensation. This compensation may impact how and where products appear on this website (including, for example, the order in which they appear). CREDIT DAD Websites do not include all card offers in the marketplace.