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Acquiring a business credit card is crucial for small businesses, providing financial stability and security. Choosing the right card can be a game-changer for your business, offering substantial benefits and rewards. This guide aims to help you navigate the best credit cards for small businesses in January 2024, considering various factors such as annual fees, foreign transaction fees, welcome bonuses, and more.
What is Promo APR?
Promo APR refers to a temporary, usually lower, annual percentage rate offered by credit card issuers as a promotion to attract new customers or encourage existing ones to make sure transactions. This rate is typically applicable for a limited time, after which the standard or regular APR takes effect.
>>Recommended Reading: Navigating the Best Fuel Cards for Small Businesses in 2024<<
Why start building credit for your business?
Building credit for your business is crucial for several reasons. It helps establish your business’s creditworthiness, making qualifying for loans and lines of credit more accessible. A favorable credit history can also lead to better interest rates and terms. Additionally, separating your personal and business finances is essential for legal and financial reasons.
Why separate your business finances?
Separating your business finances involves maintaining distinct bank accounts, credit cards, and financial records for your business activities. This separation is essential for legal and accounting purposes, making it easier to track business expenses, manage taxes, and build a strong credit history for your business.
What is an Annual fee?
An annual fee is a yearly charge imposed by some credit card issuers for using their credit card. Not all credit cards have an annual fee, and the amount can vary. Cards with annual fees often offer additional benefits, such as rewards programs, travel perks, or premium services.
Why Do Business Owners Get Charged a Balance Transfer Fee?
Business owners may be charged a balance transfer fee when they move a balance from one credit card to another. This fee is typically a percentage of the transferred amount and is set by the credit card issuer. It’s essential to be aware of this fee when considering a balance transfer.
What are Foreign Transaction Fees?
A foreign transaction fee is charged when a credit card is used to purchase in a foreign currency or with a foreign merchant. This fee is typically a percentage of the transaction amount and is intended to cover the cost of currency conversion and processing.
Which Cards Offer a Business Welcome bonus?
Some credit cards offer welcome bonuses specifically designed for business owners. These bonuses often include cash back, rewards points, or other perks for meeting specific spending requirements within a specified time after opening the account.
What is Regular APR?
Regular APR (Annual Percentage Rate): Regular APR is the interest rate applied to the outstanding balance on a credit card after any introductory or promotional APR period ends. It is the standard rate for interest on purchases, cash advances, and balance transfers.
Why is Credit Needed?
The credit needed for a particular credit card refers to the minimum credit score and financial history required for approval. Credit card issuers may have different requirements for various cards, with higher-tier cards typically requiring a more robust credit profile.
How much is the Intro APR?
Intro APR is a temporary, often lower, interest rate credit card issuers offer as a promotion. It applies for a specific introductory period, such as the first few months after opening the account. After the initial period, the regular APR takes effect.
What is a Business Gold Card, and Can You Make Everyday Business Purchases
The American Express Business Gold Card is for business owners and offers features tailored to business expenses. Here are some general characteristics:
Rewards Program:
The card typically includes a rewards program that allows cardholders to earn points on eligible business purchases. Points can often be redeemed for travel, merchandise, or other rewards.
Membership Rewards:
American Express has a “Membership Rewards” program, and cardholders can earn points based on their spending patterns.
Flexible Spending Categories:
The Business Gold Card often allows you to earn extra points in specific spending categories relevant to business expenses, such as advertising, shipping, and technology.
Everyday Business Purchases:
Yes, you can use the Business Gold Card for everyday business purchases. The card is designed to be versatile, allowing you to use it for a wide range of business-related expenses, whether it’s office supplies, travel, or other operational costs.
Annual Fee:
Like many premium business credit cards, the American Express Business Gold Card may have an annual fee. However, the potential benefits and rewards earned can often outweigh the cost, especially for businesses with significant expenses.
Eligible Purchases:
Business credit cards are instrumental tools for managing and tracking business-related expenses. The categories of eligible purchases on these cards align with the various facets of operating a business efficiently.
1. Office Supplies:
Business credit cards commonly cover expenses related to office supplies. This includes essential items such as stationery, printer supplies, office furniture, and other materials crucial for the day-to-day functioning of a business.
2. Technology and Electronics:
Business credit cards often extend coverage to technology and electronics expenditures. This encompasses purchases like computers, software, tablets, and smartphones essential for conducting and expanding business operations.
3. Travel Expenses:
Business travel expenses are typically eligible for reimbursement or rewards on specialized business credit cards designed for travel. This includes airfare, hotel stays, rental cars, and meals during business trips.
4. Advertising and Marketing:
Expenditures on advertising and marketing efforts are generally considered eligible purchases. This category covers expenses related to advertising campaigns, marketing materials, and online promotional activities vital for business visibility and growth.
5. Utilities:
Payments for essential utilities fall within the scope of eligible purchases. This includes electricity, water, internet services, and dedicated business phone lines necessary for maintaining business operations.
6. Professional Services:
Business credit cards often cover payments for professional services crucial to business operations. This includes fees for accounting, legal counsel, consulting services, and other professional assistance required for the business’s success.
7. Business Meals:
Expenses related to business meals are frequently eligible for reimbursement or rewards on business credit cards. This category encompasses client dinners, team lunches, and meals during business meetings.
8. Business Insurance Premiums:
Payments for business insurance premiums are typically recognized as eligible purchases. This includes expenses associated with liability insurance, property insurance, or other types of coverage necessary for risk management.
9. Membership Fees:
Membership fees for professional organizations, industry associations, or subscription services directly related to business activities are commonly considered eligible purchases on business credit cards.
What Are Common Characteristics of The Best Business Credit Cards?
Rewards Programs
The best business credit cards commonly feature robust rewards programs, enabling business owners to earn valuable cash back, points, or miles on their business-related expenditures. These rewards often offer flexibility in redemption, providing options for travel, merchandise, or statement credits.
Flexible Spending Categories
Top business credit cards frequently provide bonus rewards in categories pertinent to business spending. This flexibility allows businesses to maximize their rewards based on specific needs, encompassing office supplies, advertising, travel, and telecommunications.
Introductory Offers
Many leading business credit cards extend introductory offers, such as a 0% APR on purchases or balance transfers for an initial period. This feature can be particularly advantageous for businesses seeking to make significant purchases or manage existing balances more effectively.
No or Low Annual Fee
While certain premium business credit cards may have annual fees, many of the best options offer competitive rewards without imposing a yearly fee. This appeals to businesses looking to minimize costs or those with lower spending requirements.
Expense Management Tools
Business credit cards often come equipped with advanced expense management tools. These tools include detailed statements, spending reports, and budgeting features, facilitating efficient tracking and categorizing expenses for accounting and tax purposes.
Employee Cards with Spending Controls
An essential characteristic of top business credit cards is the ability to issue additional cards to employees. The best cards provide spending controls and customizable limits for each employee card, allowing business owners to manage expenses effectively and monitor employee spending.
Travel Benefits
Leading business credit cards may offer travel-related benefits for businesses involving frequent travel. These include travel insurance, airport lounge access, and statement credits for various travel expenses.
Purchase Protections
Business credit cards commonly provide purchase protections, such as extended warranties and coverage against damage or theft. These features offer businesses added security and peace of mind, particularly when making significant purchases.
Credit Building Opportunities
The best business credit cards contribute to building a solid business credit history. This is crucial for accessing more extensive credit lines, obtaining better loan terms, and securing favorable interest rates.
Customer Support and Service
Reliable customer support and service are paramount for business credit cardholders. Access to a dedicated customer service team, user-friendly online account management, and other support features enhance the overall experience of managing the card.
When selecting a business credit card, it’s essential to consider your business’s unique needs and spending patterns. Different cards offer varying benefits; the optimal choice depends on your business’s priorities and preferences.
What Business Credit Cards Have a Cash Rewards Program?
American Express Blue Business Cash™ Card
The American Express Blue Business Cash™ Card is popular for businesses seeking cash rewards. This card offers a straightforward cashback program, providing cashback on eligible purchases. It’s particularly appealing for companies with varying spending patterns as it does not restrict rewards to specific categories.
Capital One Spark Cash for Business
The Capital One Spark Cash for Business is another notable business credit card with a cash rewards program. It provides a flat-rate cashback percentage on all purchases, making it simple for businesses to earn rewards without worrying about changing spending categories. This card is well-suited for companies that prefer a no-nonsense approach to cashback.
Chase Ink Business Cash® Credit Card
The Chase Ink Business Cash® Credit Card is part of the Chase Ink business card lineup and offers a cashback program tailored to business spending. With bonus cash back in categories like office supplies, internet, cable, and phone services, it’s designed to benefit businesses with ordinary operational expenses.
Bank of America Business Advantage Cash Rewards Mastercard®
The Bank of America Business Advantage Cash Rewards Mastercard® is a business credit card that provides cash back on purchases. Cardholders can choose the category for the highest money back, including gas, office supplies, and travel options.
Discover it® Business Card.
Discover it® Business Card is known for its cash-back rewards program tailored for businesses. It typically offers a rotating quarterly cashback bonus in various categories, making it suitable for companies willing to adapt their spending to maximize rewards in different areas throughout the year.
Wells Fargo Business Platinum Credit Card
The Wells Fargo Business Platinum Credit Card offers a cash-back rewards program, allowing businesses to earn cash rebates on their purchases. It’s a no-frills card focusing on simplicity and rewards for everyday business spending.
Citi® Double Cash Card – Business
Citi® Double Cash Card – Business is a unique business credit card that offers cash back on purchases and payments. Cardholders earn money back twice — once when making purchases and again when making payments, making it a distinctive option in the cash rewards category.
Do I need a Business Checking Account?
Having a business checking account is generally advisable for several reasons. It helps separate personal and business finances, simplifies accounting and tax preparation, and provides a professional image to clients and vendors. Additionally, many financial institutions offer business-specific services and perks with business checking accounts.
Do Office Supply Stores accept My Business Credit Card?
Use of Business Credit Cards at Office Supply Stores
Business credit cards are widely accepted at office supply stores, making them a convenient payment option for various business-related purchases. Office supply stores typically welcome business credit cards as a means of payment for office essentials, stationery, equipment, and other supplies necessary for daily business operations.
Benefits of Using a Business Credit Card
Using a business credit card at office supply stores offers several advantages. It allows for streamlined expense tracking, as transactions are detailed on monthly statements. Many business credit cards also provide rewards or cash back for purchases made at office supply stores, providing an additional incentive for using the card for such transactions.
Enhanced Record Keeping
When businesses use a dedicated business credit card for office supply store purchases, it contributes to enhanced record-keeping. This separation of business expenses on the credit card statement simplifies accounting processes, making monitoring and categorizing expenditures related to office supplies easier.
Maximizing Rewards and Benefits
Certain business credit cards offer bonus rewards or benefits for purchases made at office supply stores. This can include earning extra points, cash back, or other perks, allowing businesses to maximize the value of their credit card usage.
Checking Acceptance Policies
While business credit cards are generally accepted at office supply stores, checking acceptance policies with the specific store or retailer is always advisable. Verifying that the credit card is in good standing and has not expired ensures a smooth transaction process.
Considerations for Cardholders
Businesses should be aware of any transaction fees associated with using credit cards and factor these into their purchasing decisions. Additionally, understanding the terms and benefits of the specific business credit card can help businesses make the most of their office supply store expenditures.
1. The American Express Blue Business Cash™ Card
1.1 Overview
The American Express Blue Business Cash™ Card is an excellent choice for businesses that require an introductory APR. It allows companies to finance major purchases or significant upfront costs with ease.
1.2 Key Features
- APR Charge: 18.49% – 26.49% Variable
- Best For: Intro APR + up to 2% cash back
- Welcome Business Bonus: Earn a $250 statement credit after you make $3,000 in purchases on your Card in your first three months.
- Pros: No annual fee, high rewards rate, introductory APR period on purchases, business-oriented benefits like employee cards and authorized manager accounts.
- Cons: Spending caps on bonus rewards, requires good/excellent credit, and high foreign transaction fees.
2. Ink Business Cash® Credit Card
2.1 Overview
The Ink Business Cash® Credit Card is a perfect fit for businesses that spend generously on office supplies, gas, restaurants, internet, cable, and phone services.
2.2 Key Features
- APR Charge: 18.49% – 24.49% Variable
- Best For: Up to 5% cash back
- Welcome Business Bonus: Earn a $900 bonus cash back after you spend $6,000 on purchases in the first three months from account opening.
- Pros: No annual fee, introductory APR period, new cardholder bonus offer, high rewards rates in select bonus categories.
- Cons: Requires good/excellent credit, low rate outside bonus categories, spending caps on bonus categories.
3. Ink Business Unlimited® Credit Card
3.1 Overview
The Ink Business Unlimited® Credit Card is superb for those wanting simple rewards, a substantial signup bonus, and flexible redemption options.
3.2 Key Features
- APR Charge: 18.49% – 24.49% Variable
- Best For: Cash-back business credit card
- Welcome Business Bonus: Earn a $900 bonus cash back after you spend $6,000 on purchases in the first three months from account opening.
- Pros: No annual fee, unlimited 1.5% cash back rewards on purchases, generous welcome bonus, 0% Intro APR on purchases for 12 months.
- Cons: High foreign transaction fees, not a sound card for balance transfers.
4. S. Bank Business Leverage® Visa Signature® Card
4.1 Overview
The U.S. Bank Business Leverage® Visa Signature® Card is ideal for businesses with varied expenses. This card provides a streamlined choice where you automatically earn 2% in your top two spending categories every month.
4.2 Key Features
- APR Charge: 21.24% – 26.24% Variable
- Best For: Varied Expenses
- Welcome Business Bonus: Earn $750 in rewards when you spend $7,500 in eligible purchases within the first 4 months of account opening.
- Pros: No annual fee, high rewards rates on select bonus categories, generous welcome bonus, very high cost for cash advances & balance transfers.
- Cons: There are low reward rates outside of bonus categories and a spending cap on bonus categories.
5. The Hilton Honors American Express Business Card
5.1 Overview
The Hilton Honors American Express Business Card represents the pinnacle of hotel credit cards, offering lucrative rewards for everyday expenditures and the potential to earn up to two complimentary weekend nights annually upon fulfilling specific spending thresholds.
5.2 Key Features
- APR Charge: Variable, ranging from 20.99% to 29.99%
- Best For: A superior choice among hotel business credit cards
- Welcome Business Bonus: Acquire 130,000 Hilton Honors Bonus Points after spending $3,000 on eligible purchases within the initial three months of Card Membership.
- Pros: No foreign transaction fees, complimentary Hilton Honors Gold status, a substantial welcome bonus, and an extensive selection of bonus spending could be better
- Cons: Absence of an introductory APR offer, fixed point valuation, and a relatively lower points transfer rate to partners.
6. The Ink Business Premier℠ Credit Card
6.1 Overview
The Ink Business Premier℠ Credit Card empowers businesses with significant financial capabilities, rewarding substantial monthly spending with an attractive cashback structure tailored for sizable purchases.
Entrepreneurs and business owners seeking robust financial tools for substantial monthly expenses use the Ink Business Premier℠ Credit Card.
Its focus on elevated rewards for significant purchases and the potential for substantial cashback makes it an attractive choice.
However, its emphasis on full monthly payments and restrictions on point transfers might warrant thoughtful consideration, especially for those seeking more versatile redemption options.
6.2 Key Features
APR Charge: Flex for Business variable APR: 19.49% – 27.49%
Best For:
2.5% cash back on substantial purchases
Welcome Business Bonus:
Earn a $1,000 bonus cash back after spending $10,000 within three months of account opening.
Pros:
Robust welcome offer, 5% cash back on travel through Chase Ultimate Rewards®, 2.5% cash back on $5,000+ purchases, and no annual fee for employee cards.
Cons:
High annual fee, intended for total monthly payments, points non-transferrable to airline or hotel programs, and can’t be transferred to other Ultimate Rewards-earning cards.
7. The IHG One Rewards Premier Business Credit Card
7.1 Overview
The IHG One Rewards Premier Business Credit Card offers substantial rewards and exclusive benefits for businesses heavily invested in travel.
The IHG One Rewards Premier Business Credit Card caters admirably to businesses with extensive travel needs, providing significant rewards and exclusive benefits. The allure of Platinum Elite status and the complimentary anniversary night certificate are standout perks. However, maximizing the $50 United Travel Bank credit and optimizing IHG Rewards’ value might require strategic planning to fully leverage this card’s benefits.
7.2 Key Features
APR Charge:
21.49% – 28.49% Variable
Best For:
Hotel business credit card (sign-up bonus + free nights)
Welcome Business Bonus:
Earn 140,000 Bonus Points after spending $3,000 in the first 3 months from account opening.
Pros:
Receive a free anniversary night certificate, enjoy redemption benefits like the 4th night free after redeeming three nights, and attain Platinum Elite status.
Cons:
IHG Rewards generally value less than a penny per point on most redemptions, complexities in maximizing the $50 United Travel Bank credit.
8. The Blue Business® Plus Credit Card from American Express
8.1 Overview
The Blue Business® Plus Credit Card from American Express offers a unique no-annual-fee avenue to maximize rewards earnings.
The Blue Business® Plus Credit Card from American Express presents an appealing option for businesses keen on maximizing rewards without an annual fee. Its high initial spending rewards rate and the versatility of Membership Rewards® points for various airline transfers are attractive features.
However, the foreign transaction fees and reduced rewards rate after surpassing $50,000 in annual spending may impact its appeal for businesses heavily engaged in international transactions.
8.2 Key Features
APR Charge:
18.49% – 26.49% Variable
Best For:
Flexible Business Rewards and 0% APR Business Card
Welcome Business Bonus:
Earn 15,000 Membership Rewards® points after spending $3,000 within the initial three months of Card Membership.
Pros:
Diverse airline transfer partners, no annual fee, high rewards rate on the first $50,000 in annual spending.
Cons:
Incurs foreign transaction fees, rewards rate drops to 1 point per dollar after $50,000 in annual spending.
Other Business Credit Cards Worth Mentioning:
9. Hyatt Global Brands Credit Card:
The Hyatt Global Brands Credit Card is a versatile companion across various Hyatt properties worldwide, accommodating diverse business travel requirements. Exclusive benefits and rewards within the extensive Hyatt portfolio cater to businesses prioritizing Hyatt accommodations. Always review the issuer’s most current terms and conditions for accurate and updated information.
10. Bank of America Business Advantage Cash Rewards Mastercard®:
The Bank of America Business Advantage Cash Rewards Mastercard® presents a pragmatic choice for businesses aiming to earn cash back on their expenditures. Featuring a flexible cashback program enabling cardholders to select preferred categories for enhanced rewards, coupled with no annual fee, it offers simplicity and cost-efficiency.
11. Capital One Spark Miles for Business:
The Capital One Spark Miles for Business targets businesses that emphasize mileage accumulation on all transactions. With unlimited miles and an initial bonus for new cardholders, it offers versatility in redeeming miles for various travel-related expenses, catering specifically to businesses keen on travel rewards.
12. Wells Fargo Business Platinum Credit Card:
The Wells Fargo Business Platinum Credit Card represents a straightforward business credit option without an annual fee. It boasts competitive terms, including an introductory 0% APR on purchases and balance transfers, making it an appealing choice for businesses seeking simplicity and cost-saving opportunities.
13. CitiBusiness® / AAdvantage® Platinum Select® Mastercard®:
The CitiBusiness® / AAdvantage® Platinum Select® Mastercard® is a co-branded card with American Airlines, ideal for businesses frequently traveling with the airline. Providing rewards for business travel, such as priority boarding and a complimentary checked bag, elevates the travel experience for cardholders.
14. U.S. Bank Business Platinum Card:
The U.S. Bank Business Platinum Card offers a straightforward business credit solution without an annual fee. Prioritizing simplicity, it introduces an introductory 0% APR on purchases and balance transfers, making it a practical choice for businesses seeking a streamlined credit option.
15. Discover it® Business Card:
The Discover it® Business Card is renowned for its cashback rewards program, which is tailored to businesses. Rotating quarterly cashback bonuses across various categories allows enterprises to adapt their spending to maximize rewards, making it suitable for dynamic cashback needs.
16. Citi® Double Cash Card – Business:
The Citi® Double Cash Card – Business presents a distinctive cashback approach, rewarding cardholders twice—upon purchases and payments. With a straightforward cashback structure and the potential to earn rewards on all transactions, it appeals to businesses seeking a precise and efficient way to earn cash back.
Pros and Cons of a Small Business Credit Card
9. Advantages
Having a business credit card offers several advantages. It helps separate personal and business expenses, making it easier to manage finances and track expenses. It also helps build a credit history for your business, which can be beneficial for securing future loans or lines of credit.
10. Disadvantages
However, business credit cards also have their downsides. They often come with high annual fees and interest rates. Additionally, if the business fails, the cardholder could be personally responsible for unpaid debt on the card.
Why Small Business Owners Should Get a Small Business Credit Card
11. Rationale
Having a small business credit card provides numerous benefits. In addition to separating personal and business expenses, it offers a convenient way to manage cash flow and track expenses. Many small business credit cards also offer rewards programs, allowing companies to earn points or cash back on their spending.
Can I do Combined Purchases on a Performance Business Credit Card?
The ability to make combined purchases, commonly known as “combining” or “bundling” assets, is a specific feature that may vary between different credit cards, including Performance Business Credit Cards. The term “Performance Business Credit Card” does not refer to a specific card from a particular issuer, so it’s essential to check the terms and conditions of the typical credit card you refer to.
In general, many business credit cards allow cardholders to make combined purchases, meaning they can bundle multiple transactions into a single payment. This can be convenient for businesses that make frequent or bulk purchases and prefer to streamline their payment process.
Here are steps to determine if your specific Performance Business Credit Card allows combined purchases:
Check Terms and Conditions:
Review the terms and conditions of your specific credit card. This information is typically available on the credit card agreement or the issuer’s website.
Contact Customer Service:
If the terms need to be clarified or you have specific questions, it’s advisable to contact the customer service department of the credit card issuer. They can provide detailed information on your card’s features and capabilities.
Online Account Management:
Many credit card issuers offer online account management tools that allow cardholders to manage and review their transactions. Check if your credit card issuer provides an online platform where you can explore features related to payments and purchases.
Review Cardholder Benefits:
Some credit cards have specific benefits or features related to payments and purchases. Review any materials the credit card issuer provides that outline the benefits associated with your particular card.
What is Card Statement Credit?
A card statement credit refers to a reduced balance owed on your credit card account. This credit is typically applied to your account due to redeeming rewards, taking advantage of a promotional offer, or receiving reimbursement for eligible expenses. It reduces the amount you need to pay on your credit card bill.
Can I get a business Credit Card with Less Than Stellar Credit?
While qualifying for a business credit card with less than stellar credit may be challenging, some issuers offer secured business credit cards. These require a security deposit but can help individuals with lower credit scores build or rebuild their credit. It’s essential to explore options, and issuers may have different criteria for approval.
Which Cards Have Unlimited Cash Rewards?
Credit cards with unlimited cash rewards are less common, but some may offer a flat-rate cashback structure without caps on earnings. Examples include the Capital One Spark Cash Plus and the Citi® Double Cash Card – Business, which offers unlimited 2% cash back on all purchases.
Which Card Companies Have Business Consulting Services?
Credit card companies typically do not provide direct business consulting services. However, some financial institutions offer business banking services that may include additional support and resources for business owners. For comprehensive business consulting, seeking assistance from specialized business consulting firms or professionals is advisable.
Can I use My Business Credit Card at Gas Stations?
You can use a business credit card at gas stations. Most business credit cards are accepted at gas stations for fuel purchases. Additionally, some business credit cards may offer bonus rewards or cash back for spending in categories that include gas stations, providing an additional incentive for using the card for such transactions.
A Business Credit Card Vs. a Secured Credit Card
Business Credit Card:
A Business Credit Card is designed specifically for business use, providing a convenient and efficient way for businesses to manage expenses. It operates like a personal credit card but is tailored to businesses’ unique needs and spending patterns.
Key Characteristics:
- Credit Limit: Business credit cards offer a credit limit based on the business’s creditworthiness. This limit dictates the maximum amount the company can borrow.
- Rewards Programs: Many business credit cards have rewards programs that allow businesses to earn cash back, points, or miles on their purchases. These rewards can be tailored to business expenses such as office supplies, travel, and advertising.
- Expense Tracking: Business credit cards often come with expense tracking features, making it easier for businesses to monitor and categorize spending. This simplifies accounting and financial management.
- Separation of Finances: Using a business credit card helps separate personal and business finances, simplifying bookkeeping and making it easier to track and report business expenses for tax purposes.
Secured Credit Card:
A Secured Credit Card is a type of credit card that requires the cardholder to provide a security deposit, which then becomes the credit limit. Individuals or businesses with limited or poor credit often use these cards to build or rebuild credit history.
Key Characteristics:
- Security Deposit: When the cardholder opens a secured credit card account, they must make a security deposit, typically equal to the desired credit limit. This deposit serves as collateral and is refundable when the account is closed or upgraded to an unsecured card.
- Credit Building: Secured credit cards are valuable tools for individuals or businesses looking to establish or improve their credit history. Responsible use and timely payments can contribute to building a favorable credit profile.
- Limited Rewards: Secured credit cards usually have limited or no rewards programs. The primary focus is on credit-building rather than earning rewards on purchases.
- Credit Limit Determined by Deposit: The credit limit on a secured credit card is directly tied to the amount of the security deposit. As cardholders demonstrate responsible credit use, they may become eligible for an unsecured card with a higher credit limit.
Choosing Between the Two:
- Business Needs: A business credit card suits established businesses needing convenience, rewards, and expense management. A secured credit card is more appropriate for companies or individuals looking to build or rebuild credit.
- Credit History: A business with a solid credit history may qualify for a business credit card with more favorable terms. However, for companies with limited or poor credit, a secured credit card offers an opportunity to demonstrate creditworthiness.
- Purpose: Choosing between a business and a secured credit card depends on the primary goal. Business credit cards are for ongoing business expenses and benefits, while secured credit cards are for credit-building.
What are Unusual Credit Card Purchases?
Unusual credit card purchases deviate from typical or expected spending patterns. These purchases may trigger alerts from credit card issuers as they could indicate potential fraud or unauthorized use. Unusual purchases can include large transactions, transactions in unfamiliar locations, or transactions inconsistent with the cardholder’s typical spending behavior. Credit cardholders should regularly monitor their statements for any unauthorized or suspicious activity and promptly report it to their card issuer.
Can I get Free Employee Cards?
Some credit card issuers offer free employee cards as a feature of business credit cards. These are additional credit cards issued under the primary business account for employees to use for business-related expenses. The primary cardholder can set individual spending limits on each employee card, monitor transactions, and earn rewards on the collective business spending. Free employee cards are a convenient way for businesses to manage expenses and track employee spending while enjoying the benefits of a business credit card.
What is an Account Anniversary Year?
The account anniversary year refers to the 12 months the cardholder opened their credit card account. It is different from the calendar year. Many credit cards offer annual benefits or rewards for the account anniversary year. For example, a credit card may provide an annual statement credit, bonus points, or a free night stay on the account anniversary. Cardholders should be aware of these anniversary benefits and review the terms and conditions of their specific credit card to maximize the value of these offerings.
What are Considered Personal Expenses?
For businesses, distinguishing between personal and business expenses is fundamental to maintaining accurate financial records and ensuring compliance with tax regulations. Personal fees within a business context encompass costs unrelated to the company’s core operations or activities. Properly managing and categorizing these expenditures is crucial for financial clarity and integrity.
1. Non-Business Meals and Entertainment:
Expenses incurred for personal meals or entertainment that do not directly connect to business activities fall under personal expenditures. Business owners and employees should be mindful of differentiating between business-related dining and leisurely meals that are considered personal.
2. Personal Travel Costs:
Any travel expenses associated with personal vacations, family trips, or non-business-related journeys should not be attributed to the business. This includes airfare, accommodation, and other related travel expenses.
3. Personal Vehicle Usage:
Expenses related to the personal use of a company-owned vehicle, such as commuting or non-business-related trips, are considered personal. Proper documentation and segregation of personal and business-related vehicle usage are essential.
4. Home Utilities for Non-Business Purposes:
Utility bills for a home office should only include costs directly associated with business activities. Any portion of utility expenses related to personal use, such as personal phone calls or non-business-related electricity consumption, should be identified and separated.
5. Non-Business Gifts and Celebrations:
Expenditures on gifts, presents, or celebrations unrelated to business relationships or client interactions are deemed personal expenses. Maintaining a distinction between personal and business-related gifting is essential for financial accuracy.
6. Personal Subscriptions and Memberships:
Subscriptions to services, memberships, or subscriptions that serve personal needs rather than professional development or business purposes are considered personal expenses. These should be identified and excluded from business accounts.
7. Non-Business Education Costs:
Education or training expenses that do not directly contribute to the business’s professional development or operational needs are classified as personal. This includes courses or workshops unrelated to the business context.
What are different Kinds of Business Credit Cards?
Cash Back Business Credit Cards:
Business owners seeking cash rewards on their spending can opt for cash-back business credit cards. An example of such a card is the Capital One Spark Cash Plus. These cards return a percentage of the business’s purchases as cash rewards.
Travel Rewards Business Credit Cards:
Businesses with significant travel expenses may benefit from travel rewards business credit cards. The American Express Business Platinum Card® is an example, offering points or miles that can be redeemed for travel-related expenses like flights and hotel stays.
Points-Based Business Credit Cards:
Points-based business credit cards, such as the Chase Ink Business Preferred® Credit Card, provide businesses with points that can be redeemed for various rewards, including travel, cash back, gift cards, or merchandise.
Business Charge Cards:
Business charge cards, exemplified by The Plum Card® from American Express, require the total balance to be paid monthly. These cards offer flexibility in payment terms while providing business-friendly features.
Secured Business Credit Cards:
Geared toward businesses with limited or poor credit, secured business credit cards like the Wells Fargo Business Secured Credit Card require a security deposit and can help build or rebuild credit.
Small Business Credit Cards:
Tailored for the unique needs of small businesses, cards like the Bank of America Business Advantage Cash Rewards Mastercard® offer benefits and features catering to the requirements of smaller enterprises.
Corporate Credit Cards:
More giant corporations often utilize corporate credit cards like the Citi Corporate Card, providing features such as detailed reporting, expense management tools, and centralized billing for employees.
Balance Transfer Business Credit Cards:
For businesses looking to manage existing balances, balance transfer business credit cards like the U.S. Bank Business Platinum Card offer introductory periods with low or 0% APR on balance transfers.
Retail Business Credit Cards:
Co-branded with specific retailers, retail business credit cards like the Amazon Business Prime American Express Card provide rewards or discounts for purchases made with the partnering retailer.
What are Personal Credit Reports?
A personal credit report is a comprehensive document that provides a detailed summary of an individual’s credit history. It is a crucial tool for lenders, creditors, and other financial institutions to assess a person’s creditworthiness when considering applications for loans, credit cards, mortgages, or other forms of credit.
Critical Components of a Personal Credit Report:
Personal Information:
Includes the individual’s name, date of birth, current and previous addresses, Social Security number, and employment history.
Credit Accounts:
Provides a list of all active and closed credit accounts, including credit cards, mortgages, auto loans, and other lines of credit. Information includes account balances, credit limits, and payment history.
Credit Inquiries:
Lists inquiries made by lenders or creditors when the individual applies for credit. Inquiries may be categorized as “hard inquiries” (initiated by the individual’s request for credit) or “soft inquiries” (not related to a credit application, such as pre-approved offers).
Public Records:
Highlights any public records associated with the individual’s financial history, such as bankruptcies, tax liens, or court judgments. These entries can significantly impact credit scores.
Collections:
Indicates accounts that have been sent to collections due to non-payment. This section provides details about the collection agency and the amount owed.
Payment History:
Details the individual’s payment history on each credit account. It includes information on whether payments were made on time, any late fees, and the presence of any delinquencies or defaults.
Credit Scores:
It often includes credit scores generated by credit bureaus based on the information in the report. Credit scores are numerical representations of creditworthiness, with higher scores indicating lower credit risk.
Significance of Personal Credit Reports:
Creditworthiness Assessment:
Lenders use personal credit reports to assess an individual’s creditworthiness and make informed decisions on extending credit or approving loan applications.
Interest Rates and Terms:
A person’s credit report can influence the interest rates and terms offered on loans and credit cards. Individuals with higher credit scores may qualify for more favorable terms.
Financial Planning:
Personal credit reports allow individuals to monitor their financial history, identify any inaccuracies, and take steps to improve their credit health. Regular monitoring is essential for financial planning and managing credit responsibly.
Identity Theft Detection:
Monitoring personal credit reports helps detect any suspicious activity or signs of identity theft. Unusual account openings, unfamiliar inquiries, or unauthorized transactions can indicate potential fraud.
Accessing Personal Credit Reports:
Individuals are entitled to request a free copy of their credit report annually from each of the major credit bureaus: Equifax, Experian, and TransUnion. Additionally, they can access their credit reports through various online platforms and credit monitoring services.
Individuals must review their credit reports regularly, address discrepancies, and take proactive steps to maintain a positive credit history.
Bottom Line
Choosing the best credit card for your small business is a significant decision that can impact your business’s financial health. Considering each card’s benefits, such as reward programs, introductory offers, and annual fees, is essential. By comparing different cards and understanding your business’s specific needs, you can select the best credit card to help your business thrive.
