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Best Small Business Credit Cards

Michelle Brooks

Michelle Brooks

Financial Advisor

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Small Businesses have been steadily increasing their use of credit cards in recent years as the range of benefits associated with them increases. Many lenders have entered the business credit card market to help small businesses find payment and funding solutions for their companies.

If you own or operate a small business, you may be looking to get a business credit card to help you or your staff pay for company related items. It’s a great way to be able to keep track of costs without having to offer reimbursements to yourself or your staff. In addition, it doesn’t count against the credit report of you or your employees, so your business performance doesn’t risk leaking into your personal finances. Lenders have been increasingly offering competitive deals to entice small business owners into applying for their credit cards.

You should make sure to be fully aware of the best options available to you. Getting the most out of your business credit card will require you to choose one of the best cards on the market. There are a range of different options available to you as a small business owner.

In this article, we will overview what you should look for if you’re trying to find the best business credit card available. The article will also take a look at the various advantages and disadvantages of having a credit card for your business.

What to Look For

When deciding on a business credit card you should look at the following factors before deciding which card suits your business best: personal liability protection, billing protection, interest rates, and additional benefits.

  • Personal Liability Protection – Unfortunately, some credit card providers will attempt to make you personally liable for the credit performance of the business card. This means that if you default on payments, or don’t pay certain bills on time, it could impact your personal liability. If you want to make sure the performance of your small business is separate from your personal life you will want to make sure that you don’t have a lender that will enforce you to tie your personal credit report to your business card.
  • Billing Protection – When you decide on which business credit card to opt for you should take a close look at the billing protections they afford you. Consumer credit cards often offer various services to those who may need to contest charges and other forms of billing, but business credit cards have less of a track record for this. Make sure the terms and conditions ensure you won’t be exposed to paying for fraudulent charges.
  • Interest Rates – Like any credit card, you want to make sure the business card you choose has the lowest interest rates possible. Since business cycles will end up meaning that you inevitably carry balances on your credit card, it is important you use a card with as low of a rate as possible. Business cards have notoriously high interest rates, make sure to research the lowest possible ones.
  • Additional Benefits – Like consumer credit cards, lenders often offer various sign up bonuses or rewards incentives for business credit cards. There are various cash back cards that can help your small business recoup some of its spending – make sure to check it out various offers before making a decision.

 

Advantages

Business credit cards are a great way to help bridge gaps in cash flow that your small business may have. In addition, they’re the perfect way to make sure that you and you employees don’t have to be reimbursed for business related costs. It can help you separate your personal financial situation from your business. You want to make sure that you don’t expose yourself to potential business related financial issues – and a business credit card is a great option. In addition, they’re relatively easy to apply for when compared to other forms of business credit.

 

Disadvantages

Business credit cards have higher interest rates than many other forms of credit – this is because they are unsecured and don’t require as long of an application process. This can prove to be costly for your business in the long term, especially if you carry a large balance. In addition, you open yourself up to potential fraudulent charges by staff. If you give a business card to an employee and they decide to rack up the bill, it can be hard to get the money back from the lender. Make sure that you trust yourself and your staff to use the card responsibly. Big purchases that will take time to pay off may be better for a different type of finance, such as a traditional small business loan.

 

Authorized Users

You shouldn’t sign up for a card that does not allow authorized users. This is one of the best parts about having a business credit card for your business. Having staff and other business directors with business credit cards can help improve your operations. Having an authorized user is a fairly normal function of a modern business credit card.

Lenders that don’t offer this type of usage should be avoided. Even if you don’t think that you need an authorized user now, there is a high chance that your small business might need one in the future. This is especially true if your business continues to expand. You don’t want to have the hassle of having to apply for a new credit card in the future because your current lender doesn’t provide you with the features that you need.

Keep in mind that you will in most cases be liable for what your staff use the credit card for, so make sure that you only provide them to members of your team that you feel you can trust.

Aim for a High Limit

If you do decide to get a business credit card, you should aim to get as high of a limit as possible. One of the primary reasons business credit cards are so useful is because they can help you pay for things during an emergency. Having a high limit means that you will never have to worry about paying for an expense or taking advantage of an opportunity at short notice.

The best business credit cards typically have high limits attached to them. Of course, this will depend on the amount of money that your business makes. As long as you are a responsible business owner, having a high limit should not be an issue for your business. Remember, you don’t have to pay interest on what you don’t borrow and you don’t have to pay a higher annual fee just because you have a higher limit.

 

Make Sure Your Small Business is Protected

Using a credit card for your small business can help you protect against fraud. The best credit cards on the market offer a range of different fraud protection functions. The most important of these features is the zero-liability clause that is often present in many credit cards. It means that should someone make a payment on your card that is not authorized, or should something fraudulent happen to your account, you will in no way be responsible.

If you use other forms of payment you could be opening yourself up to fraud. For example, if you have a debit card attached to your business card and someone is able to steal it and drain your business account, you might not have access to your funds for a prolonged period of time. For certain types of businesses, this can be completely devastating. You don’t want to put the health of your company at risk by opening it up to fraudulent activity.

 

Using Your Business Bank is No Longer as Important

Traditionally, small businesses have tried to keep all their financing and banking in the same location. It makes the entire process seem easier if it’s all situated under one roof. But with modern technology, this is no longer as true. You can use credit cards from separate banks or lenders without having to worry about overcomplicating your financial arrangements.

You can set up automatic payments and transfer funds within a day, you won’t have to worry about missing payments or damaging your businesses credit score. This is an awesome advancement as it means you don’t have to be restricted to your bank’s lending products. If you really like your bank and want to have your accounts with them, you can still access cards from other lenders with ease. This means that you can easily access all the best business credit cards no matter who you bank with.

 

Old Vs. New Business

The application process will differ depending on the type of small business that you have. If you are just starting a new business and you want to get a credit card to help you pay for your expenses, you might have to offer up your personal credit score to help the bank determine if you are a responsible borrower. This means that you should ensure that your personal credit score is up to scratch before you make an application. You don’t want your small business to have a rejected credit card application if it can be avoided.

For small businesses that have been operating for a while, the landscape is slightly different. Lenders will typically ask you for your business credit score – this is a combination of your payment information and reliability record. If you’re a business that hasn’t had any problems, you probably won’t have any issue getting a business credit card for your business. This is especially true if you have had one in the past. Expect lenders to ask you for income data and information about the health of your business – just because you have a good business credit score doesn’t mean that you are a viable borrower.

 

Application Process

As a small business owner, you’re probably extremely consumed with time commitments. Heading to the bank and applying for a new credit card may seem like something you don’t have the time or energy to do – especially because banks are only open in office hours. Fortunately, you can apply for a business credit card online just as easily as you can apply for a normal credit card. The application process will take you less than half an hour.

You can submit all your personal and business information directly through the lenders online portal. You can also upload earnings and income information directly through the internet. Many small businesses will be able to receive an instant decision. Those with more complex businesses may have to wait for their documents to be reviewed by the lender.

Either way, the process is much more streamlined and means that you won’t ever have to leave the comfort of your office to get the application sorted out.

 

Verdict

Business credit cards are used by millions of Americans every year to help bridge gaps in cash flow. They also take the head ache out of paying for various business related expenses. It is important to consider the four different factors we outlined in this article prior to making a decision on the best business card to opt for. It’s also important to make sure that you get the best possible business credit card for your small business. As with any decision in your business, making the right choices is crucial to the success of your firm. Negligent business owners don’t last long in the competitive world of modern commerce.

Considering you own and operate a small business, you’re probably very time poor. That’s why we’ve created a list of the best business credit cards currently available to business owners in the United States. Instead of spending hours researching yourself, check out some of our top picks for business cards. We take into consideration every factor that makes a credit card viable for a business. Choose the one that you find is most suitable for your company.

Make sure to have all the information you need for your application ready to go before you start the process. Each lender will require different business related documentation, so make sure that you’re able to provide required documents before you apply!