Business credit cards are designed to assist and bring value to small and medium-sized businesses through a wide range of rewards and benefits. If you have been questioning your current business credit cards, or you are unsure where to start, we’re here to help. First, let’s consider the advantages of a great business credit card:
- Higher credit limits than personal credit cards
- The ability to better manage your business’s cash flow, allowing you 20 to 30 days to pay off your business expenses without interest
- Earning rewards such as cash back or points on business expenses
- Business benefits such as merchandise discounts, purchase protections and extended warranties
- Helping you separate your personal finances from your business finances
- Helping you build your business credit scores
Due to major competition in the business credit card market, it can be overwhelming to find the card that is right for your business. This guide outlines the main criteria of what makes for a fantastic business card. Note, however, there is no such thing as an objectively perfect business credit card. The “perfect” business card is the one that aligns with your business aims and brings you maximum value. By following these five tips, we hope that your search for your perfect business credit card is smoother and more informed.
Compare rewards.It is no secret that many expenses come with operating a business. As the age-old adage goes, you have to spend money to make money. However, a fitting business card can give you cash back or rewards points on the business purchases you make most. As time goes on, such cash back or rewards points can build up and give your business substantial savings. Different business cards offer different rewards categories (e.g. gas, travel and restaurants) so make sure to choose a card that aligns with your business expenses. Cards that offer rewards points also have their own rewards redemption schemes. Checking rewards redemption schemes is highly important. Different redemption methods can offer you different values for your accumulated points.
Compare benefit suites.A great set of benefits on a card can bring huge value to your business if aligned to your business’s aims. Depending on the card, benefits can be wide-ranging. As with the rewards, align your card’s benefits to your business’s goals. The aim here is to choose a business card with a benefits suite that brings your business the most possible value. For example, does your business require large amounts of air travel? Then a card with airport-related benefits (lounge access and expedited screening) could benefit your business.
Make sure the business card’s value outweighs the annual fee.A number of business credit cards come with an annual fee, with more premium card offerings having annual fees of over $400. If a card with an annual fee catches your eye, make sure to weigh the fee against the card’s rewards and benefits. Will the rewards and benefits bring you more value than the annual fee? If yes, place this card in your consideration list. If no, disregard it. Although a card’s luxury benefits and rewards may seem appealing for things like business travel, if your business does not do a lot of traveling, the high annual fee may not be worth it.
Consider sign-up bonuses.A number of business cards come with significant sign-up bonuses for spending a certain amount in the first number of months. Business card sign-up bonuses can be high in comparison to personal credit cards. This is to reflect that businesses generally spend more than consumers. However, it is not recommended to chase a large sign-up bonus if you cannot pay your bill back on time and in full. Such credit card debt could negate the sign-up bonus and detrimentally affect your business credit scores, which is just not worth it.
Avoid foreign transaction fees.If you conduct business overseas or buy anything in a foreign currency, a business card without foreign transaction fees is a must. It will save you from paying unnecessary fees, which can build up in the long run.
Choosing the right business card doesn’t have to be a headache. Use these five tips to help you find your perfect business card. Remember there is no objectively superior business card on the market. Businesses come in all shapes and sizes, so a card that is right for one business may not be a good fit for another. Therefore, always keep your business’s overarching aims in mind when shopping for a business card.