Ways to Choose the Right Business Credit Card

Quick insights

• The best business credit may be the one that best suits the needs of your business.
• Business credit cards often offer rewards programs, purchase protections and expense management and reporting tools.
• When applying for a new card, you may be eligible for sign on bonuses in the form of rewards points or cash back.

Not all credit cards are the same. While they all provide access to capital, their features and benefits vary by card and card issuer. This is true for business credit cards as well. Business cards can offer rewards and perks that cater to the unique needs of a business owner.

In this article, we’ll discuss some ways to help determine which business credit card may be best for you.

Business credit cards explained

A business credit card is a specialized type of credit card issued to a business entity rather than an individual. Business credit cards can be used to manage company expenses, streamline spending processes and separate personal finances from business transactions.

Business owners also may find the expense management features and rewards programs that come with many business credit cards beneficial. Many businesses may look to find a card that rewards them with travel perks or points for making everyday purchases.

Choosing the best credit card for your business

When choosing the best credit card for your business, two things should be top of mind: Your business’s needs and the card’s eligibility requirements.  

Business needs

Every business has different financial needs and spending habits. When choosing a business credit card, you may want to think about the kinds of purchases you make for your business and how a card can support your business goals. If your business has employees who need to make purchases on behalf of the business, for example, you may want to choose a credit card that provides employee credit cards.

Eligibility

Generally, anyone who has a business can apply for a business credit card. This includes freelancers, independent contractors, self-employed business owners and gig workers. You don’t necessarily need to have a formal business to apply for a business credit card. If you sell goods and services for a profit, you could be eligible.

However, when applying for a business card, you may be expected to provide personal and business information, including:

• Business name, address and contact information
• Tax ID (EIN or SSN)
• Number of years in business
• Industry
• Number of employees
• Annual revenue (can be $0 if you have yet to earn money)

Providing up-to-date information can help streamline the application process. This is because incorrect or missing details may cause a credit card issuer to reject an application.

Business credit card features

Business credit cards can include many features. Some notable ones include:

Rewards programs

Like many personal consumer credit cards, business credit cards can include rewards programs. Common rewards structures include:

• Cash back: Many business credit cards offer cash back on purchases, often with higher rates in categories common to business spending such as office supplies, telecommunications and travel.
• Points: Cards may award points on eligible purchases that can be redeemed for travel, gift cards statement credits and more.
• Travel miles: For businesses that require frequent travel, some cards offer rewards as miles that can be redeemed for airline tickets, hotel stays or car rentals.

In addition to learning how a credit card earns rewards, you may also want to review how easy it is to redeem rewards and if they have an expiration date.

Insurance and purchase protections

Your business credit card may offer certain protections for your purchases. These can include:

• Travel insurance: Can include coverage for travel accidents, lost luggage, trip cancellations and more.
• Purchase protections: May offer protection against theft or damage of purchased items for a certain period after purchase.
• Extended warranty: Extends the manufacturer’s warranty on items purchased with the card.

Read your card’s terms and conditions to determine what protections a card may offer.

Expense management tools and reporting

Many cards offer features that integrate with accounting software, which can simplify the process of tracking and categorizing expenses. Some business credit cards provide access to detailed reports that can help you track spending, monitor trends and stay on budget. Expense tracking features may vary between credit card issuers.

You may also want to look for cards that offer breakdowns by spending category, which can be helpful for budgeting and tax preparation.

Employee credit cards and controls

Some business credit cards allow primary account holders to set spending limits and track purchases for individual employees. This is typically done by issuing employee credit cards, which are often available for no additional cost.

These features can help maintain control over expenses and potentially simplify accounting.

Considerations when opening a business credit card

Before you sign up for a new business credit card, you may want to consider the following:

Annual fees

Some business credit cards may have an annual fee. Annual fees could signify meaningful credit card benefits like purchase protections or travel insurance. Some businesses may find that the associated credit card benefits are worth the annual fee. Or they can search for an option with a low annual fee.

Welcome offers

Many business credit cards incentivize new cardholders with welcome offers. These types of offers typically require cardmembers to meet a minimum spending requirement within the first few months of the account opening. Offers are frequently provided as cash back, points or miles. Some cards also may waive the card’s annual fee for the first year as part of a welcome offer.

Introductory APR offer

Some cards offer an introductory APR on purchases or balance transfers for a set period after opening the account. This feature can be particularly useful for businesses planning large purchases.

Customer service and support

Since business needs can arise at any time, having access to 24/7 customer support can be important to some business owners. Premium business credit cards may provide a dedicated account manager, which can be helpful when setting up new employee cards or handling complex inquiries.

In summary

There are many things to think about when trying to determine the best business credit card for you. Knowing how you plan to use a credit card, what rewards are available and how you can use it for expense management and reporting can help you figure out which card has the right features for you. You may also want to consider what welcome offers may be available to new account holders. To better understand what a business credit card has to offer, review the card's terms and conditions before opening an account.