How to choose a business credit card

Quick insights

• A business credit card may offer unique advantages over business loans or personal credit cards.
• When selecting the right card for your business, the rewards structure might be an important factor to consider.
• Other considerations might include the business credit card’s annual fee, benefits and account management tools.

No matter if you’re just starting out or have a well-established business, you may be interested in applying for a business credit card. But with so many options, it may take time to compare business credit card options and select one based on your business’s needs and objectives.

Here are some things to know about finding the right one for your business model.

The benefits of a business credit card

Business credit cards may offer some advantages over personal credit cards or other business financing options. From their terms to rewards structures, the benefits of small business credit cards are numerous.

These cards are typically customized to support business-related purchases and the needs of business owners, and they can make it easier to separate personal and business spending, which may be a relief when tax season arrives.

• Higher credit limits: To support the relatively higher purchasing needs business owners usually have, business cards might have higher limits than consumer cards.
• Rewards: Office supplies, utilities, travel, digital marketing, gas stations and dining are some common business-specific reward categories.
• Business-friendly features: You may be able to get complimentary cards for employees, bookkeeping tools or other features with some cards.
• Perks and benefits: A business credit card may offer travel and other business-related perks and benefits like trip insurance, airport lounge access and auto rental coverage, which may help you cut down on some expenses.

You’ll likely find higher APRs on business credit cards than on a business loan, but if you pay your balance in full every month, you may avoid paying interest charges.

Finally, a business credit card could help you establish your business credit history, which may help you secure business loans in the future.

The types of business credit cards

With so many different business credit cards to choose from, it can be overwhelming to pick the right one. Knowing the different types may help you pick one that caters to your business needs. Here are a few popular categories of rewards business credit cards.

Cash back credit cards

These business credit cards allow you to earn cash back. That means every time you make a qualifying purchase, you earn back a percentage of what you pay. The card may have cash back categories, each with their own cash back rate.

If your business spending doesn’t fit into the buckets you’re seeing on certain cash back cards, you might consider a card that rewards all purchases with a flat rate.

Travel rewards credit cards

If your business requires you or your employees to travel frequently, you might want to consider a travel rewards business credit card. You’ll potentially be able to earn rewards on eligible travel-related purchases, such as flights or hotel stays.

Factors to consider when choosing a business credit card

After you’ve determined the type of card you want, the next step is to select and apply for a business credit card. Here are some factors you may want to think about as you try to find the right one.

Rewards structures

Business credit card rewards can come in the form of points, cash back or statement credits. Rewards categories can be fixed or they can rotate. Rewards may be offered for an introductory period. It’s possible you can redeem business card rewards for cash back, travel and more.

Whatever card you go with, it may be helpful to see if the rewards structure aligns with your business’s spending habits. As you compare cards, you might try looking at a typical month of your business’s spending and estimate the rewards you might earn.

Annual fees

Often the cards with the most valuable perks and benefits come with an annual fee. Whether these business cards are worth it depends on how valuable these extras are to you. Consider how the terms, rewards, benefits and other card features align with your business’s needs.

Account management tools

Some business credit cards come with accounting software, which may have built-in integrations with the reporting tools you already use. If you’re able to utilize these tools, it may make it easier to track your spending, as well as file your taxes.

Additionally, business credit cards frequently offer employee credit cards, which you might be able to place customizable spending limits on.

Card benefits

When you think of how a business credit card might help your business, rewards may come to mind. But credit card benefits also have the potential to provide value to your business. Some business credit cards come with complimentary benefits that might reduce your expenses and give you peace of mind. Here are some common benefits that business credit cards usually offer:

• Trip insurance
• Travel upgrades
• Auto rental coverage
• Extended warranty protection
• Cell phone insurance
• Fraud protection

These benefits might not be a major priority in your search for the right card, but they may simplify some aspects of your business and be beneficial.

In summary

Business owners may benefit from a business credit card. As you compare business credit cards, consider your business’s needs and spending habits, and it’s possible the right card can even help you kickstart growth.