What to Look For in a Small Business Credit Card
Reason No. 1 to get a credit card for your small business? To separate your personal spending from your business spending. Reason No. 2? Credit card companies have finally begun designing programs that provide real, tangible benefits to suit just about any small business. But with a recent barrage of advertisements, the rewards programs and airline miles programs all start to sound the same. Here are some tips to help you decide what credit card plan is right for your business:
DO |
| Analyze how you’ll be using the card. Decide if you’ll be carrying an ongoing account balance or if you expect to pay off your business charges monthly. That will determine whether you get a card that has a rewards program or if a low interest rate should be your priority. |
| Decide what rewards will most benefit your business. Rewards vary from airline miles to retail gift cards to gas. |
| Read the fine print. Low introductory rates eventually become higher. Make sure you know how much higher and compare future rates with those offered by other cards. |
| Consider the amount of control and customer service a program offers. Can you gain access to your account and set employee spending limits online? Does the company offer annual statements by purchase category to help with tax preparation? |
| Negotiate. Call the company and see if they will customize a deal for your business. |
DON’T |
| Get a rewards card if you’re going to be carrying a balance from month to month. The interest charges will more than likely wipe out the savings earned through the rewards program. |
| Transfer balances unless you’ve got a long-term 0% transfer rate. |
| Fall for gimmicks. If your card offers three reward points per dollar spent, make sure the points are as valuable as other comparable plans. If it costs 45,000 points to purchase an airline flight on the plan and only 10,000 on a plan that gives one point per dollar spent you should choose the latter plan. |
| Pay an annual fee. There are enough card options with great services that don’t include an annual fee. You don’t need to pay one. |
Some of the best Small Business Credit Cards out now are:
1. Advanta, a company that caters specifically to small businesses, offers one of the best all-around deals for a small-business credit card. The Advanta Platinum Business Card offers a 0% APR for 15 months and a 7.99% fixed APR thereafter, while offering 5% cash back or travel rewards. And there’s no annual fee for using the card and cardholders can choose a 2.99% fixed APR for life on balances transferred within the first three months of signing up.
2. The Discover Business Card offers 0% introductory APR for purchases and balance transfers for 12 months, with a variable rate thereafter. It also offers a similar cash-back rewards program to Advanta’s, including a 5% cash-back bonus on all office supplies, 2% cash-back bonus on gas, and up to 1% cash-back bonus on all other spending. There is no cap to the amount of annual cash-back rewards.
3. The Blue Cash for Business card from American Express offers up to 5% cash rebates, with no limit on cash rewards and no annual fee. It also offers a 0% APR during the first six months.
4. American Express also offers the Business Gold Rewards Card, which features complimentary enrollment in the Membership Rewards program and the ability to earn up to 100,000 points or more every year. There is no pre-set spending limit and no fees for the first year. This is a great card for business owners who may need to make large purchases on their card.
No matter what card you eventually choose, make sure to weigh the needs of your business against your desire for rewards. And don’t be afraid to ask questions. After all, it’s your money. When chosen wisely, the right credit card can be a good partner, saving your business time and money.