Small-business credit cards are increasingly popular business financing options, particularly for entrepreneurs who don’t qualify for traditional business loans or have access to networks filled with deep-pocketed family members, friends, and colleagues. No matter what your business does, a credit card can probably help — as long as you use credit wisely and avoid making purchases your company can’t afford.
The Benefits of Small-Business Credit Cards
Small-business credit cards typically have higher spending limits and more generous rewards programs than consumer cards. Some have additional benefits, such as low APRs, attractive balance transfer promotions, personalized concierge service, and fringe benefits. However, many also require good or excellent credit to qualify and come with annual fees. To choose the best small-business credit card for your business, consider the specific features that align with your needs.
The Best Small-Business Credit Cards
These are the best small-business credit cards on the market right now. They include a mix of low-interest credit cards, travel rewards credit cards, cash-back credit cards, and general-purpose rewards cards. Each card offers unique benefits and features, so carefully evaluate your options before making a decision.
Evaluating Small-Business Credit Cards
When evaluating small-business credit cards, we consider several important factors, including rewards programs, eligibility requirements, sign-up bonuses, interest rates, and additional benefits provided. By carefully comparing these factors, you can determine which card best suits your business’s needs.
Building Business Credit with Small-Business Credit Cards
Establishing business credit can be challenging, especially for new businesses without a credit history. Some small-business credit cards allow applicants to use their personal credit scores and provide a personal guarantee for the account. Other cards require a business credit score. To learn more about building business credit, read our article on ways to establish business credit fast.
Considerations for First-Time Applicants
If you’re applying for your first small-business credit card, choose one that accepts a personal guarantee. This can provide an entry into the business credit card world and help you build business credit over time. However, keep in mind that if your account becomes delinquent, your personal credit could be negatively impacted.
Rewards Programs and Sign-Up Bonuses
Most of the small-business credit cards listed here offer rewards programs, which can be a major incentive for small-business owners. We evaluate these programs based on their overall generosity, rewards restrictions, ease of redemption, and available redemption options. Sign-up bonuses are also considered, especially for new cardholders. Look for cards that offer attractive sign-up bonuses to maximize your rewards potential.
Low APR and Financing Options
If you anticipate carrying a balance on your small-business credit card, look for cards with low regular interest rates or long 0% APR introductory promotions. While 0% APR promotions are less common for business cards, they can still be found with the right research. Compare the financing options offered by different cards to find the best fit for your business.
Additional Benefits and Fees
The best business credit cards provide additional benefits and services to cardholders. These can range from partnerships with business vendors to spend reporting and analysis tools. We give high placement to cards that offer significant annual value to users. Be aware that most business cards have annual fees and other fees, so carefully consider the fees associated with each card before making a decision.
Qualifying for Small-Business Credit Cards
Qualifying for a small-business credit card often requires different criteria than consumer credit cards. Some issuers accept a valid Social Security number and a written affirmation that the card will be used exclusively for business purposes. Others may require a federal employer identification number (EIN), evidence of incorporation, or financial statements. Understanding the qualification requirements before applying is crucial to ensure a smooth application process.
Personal Guarantee and Liability
Before applying for a business credit card, determine whether you need to personally guarantee the account. While not ideal, a personal guarantee may be necessary if you have limited business credit history. However, be cautious as it can expose you to personal liability if your business encounters financial difficulties.
Impact on Your Credit Score
Your small-business credit card can potentially improve either your business credit score or your personal credit score, depending on factors such as your credit score(s) and business revenue. Responsible credit utilization and on-time bill payment can positively impact your credit scores. Consider the specific factors that apply to your situation to determine how a small-business credit card might affect your credit.
Choosing the Right Small-Business Credit Card
Choosing the right small-business credit card requires careful consideration of your business’s specific needs. Consider factors such as your spending habits, desired benefits, financing requirements, and the number of authorized users in your organization. By evaluating these key factors and taking a step back for perspective, you can make an informed decision that aligns with your business goals.
With numerous small-business credit cards available, finding the perfect match for your business can be a daunting task. However, by understanding the benefits, features, eligibility requirements, rewards programs, financing options, and additional benefits of each card, you can narrow down your choices and find the best credit card to support your business’s success.