Credit cards are an incredibly easy way to finance business purchases, and there are many cards specifically designed for businesses. If you want to apply for and use a business credit card, you’ll want one tailored to the unique needs of your organization. We’ve selected some credit cards below that may be well-suited to your business, but before we dive into the details, let’s explore the advantages and disadvantages.
Business credit cards can be great for your finances if they’re used properly.
We strongly recommend building up a cash buffer in your business. But if you haven't been able to do that yet, business credit cards can be a helpful stopgap measure. You can use them to plug short-term holes in your business finances — though interest costs can easily build up over time if you do this for too long.
Your business has a credit score that banks use to decide if they want to lend you money. One of the best ways to boost your credit score is to get a business credit card, keep your credit utilization low and make every payment on time.
Many credit cards have reward and cash back schemes built in. Used well, these programs can provide you with a small boost to your finances, which can be very useful for fledgling businesses.
Of course, it’s not all sunshine and roses — business credit cards need to be carefully managed too.
Because you’re not seeing money come out of your bank account right away, it’s easy to treat credit cards as free or “invisible” money. Of course, this isn't the case — they still need to be repaid. You should pay as much attention to credit card purchases as any other business payments, and work them into your budget and profit margins accordingly.
The great “con” of all credit cards is the attractiveness of only making the minimum payment due every month. Although this might seem like a good idea in the short-term, over the medium- to long-term you will pay far more in interest. Always try to pay off the full balance owed every month (or at least as much as you can afford).
Minimum repayments and high interest rates can really increase the amount you pay overall and eat into your profitability. Keep a close eye on how much you’re paying in interest, and pay your loans down ASAP.
Whatever you do, always make your payments every month. Failing to pay or making delayed payments can have a dramatic impact on your business credit score.
Now that we’ve been over the pros and cons of business credit cards, let’s explore some that could be right for your business.
Card Name
Ink Business Preferred
Ink Business Cash
Spark Cash
Spark Cash Select
SimplyCash Plus
AAdvantage Platinum Select World Mastercard
APR
17.24% to 22.24%
14.49% to 20.49%
18.24%
14.24% to 22.24%
13.49% to 20.49%
16.99% to 24.99%
Annual Fee*
$95
None
$95
None
None
$95
APR interest rate: 17.24 to 22.24 percent, based on business creditworthiness
Annual fee: $95 Special
Offers and Incentives
APR interest rate: 14.49 to 20.49 percent, based on business creditworthiness
Annual fee: None
Special Offers and Incentives
APR interest rate: 18.24 percent (businesses must have excellent credit scores)
Annual fee: None for the first year, $95 for each subsequent year
Special Offers and Incentives
APR interest rate: 14.24 to 22.24 percent
Annual fee: None
Special Offers and Incentives
APR interest rate: 13.49 to 20.49 percent, based on business creditworthiness
Annual fee: None
Special Offers and Incentives
APR interest rate: 16.99 to 24.99 percent, based on business creditworthiness
Annual fee: $95
Special Offers and Incentives
A business savings account can be a useful tool for small-business finances. Business savings accounts can help your business keep extra cash on hand to deal with emergencies, help you smooth out your cash flow and save up for larger planned expenses.
By Jennifer SokolowskyPNC Bank might not be one of the most popular national banks, but it’s the 8th largest bank in the country in terms of its total assets. PNC operates in a total of 19 states, mostly in the east coast and Midwest. It also operates in the District of Columbia. Business Checking Account Options There […]
By Heather HaferA merchant cash advance (more commonly called a cash advance), is a financial transaction between your business and an alternative financing company. The company purchases your receivables at a discounted rate, essentially “advancing” your future revenue. This advance amount is the total amount of capital the funding company will advance you.
By Chris KellerSmall businesses have a lot of choices when it comes to banking. Here are some of the benefits and drawbacks of choosing to do your business banking with Capital One.
By Jennifer Sokolowsky