How to find the best business credit card to suit your business expenses

Did you know around 67% of small-business owners have a business credit card, but only 24% use it as their primary way to pay for business spending? The benefits of using your business credit card more are numerous; it makes it easier to gauge your business health, reduces tax-time headaches and even builds your business credit score.

But finding the best business credit card to suit your business expenses can be tricky. Here is a step-by-step guide on how to do just that and make the most of your business spending.

Step 1: Get familiar with the best business credit cards

It helps to have a general idea of how business credit cards differ from personal credit cards, as well as the types of rewards available.

Business credit cards:

  • Often have higher credit limits
  • Have rewards tailored to small-business spending, such as office supply or restaurant purchases
  • Don’t offer many of the consumer protections afforded by the Credit CARD Act of 2009
  • Typically require you to personally guarantee small-business card purchases
  • Usually report to commercial credit reporting agencies, but not personal ones

As far as rewards, business credit cards typically offer one of the following: cash back, points or travel miles. Most business credit card rewards are for money or travel. Many with point systems, like the Hilton Honors American Express® Business Card, are still tied to travel. 

A few of the best business credit cards in each category include:

Best credit cards for cash back: Blue Business Cash™ Card from American ExpressCapital One Spark Cash, Ink Business Cash credit card, Costco Anywhere Visa Business Card by CitiDiscover it® Business Card

Best credit card for points:Chase Ink Business Preferred Credit Card

Best credit cards for business travel: Business Platinum Card® from American ExpressHilton Honors American Express® Business CardSpark Miles from Capital OneCitiBusiness/AAdvantage Platinum Select World MastercardJetBlue Business Card

If you’re looking for a reward card with flexible points, Chase’s line of business credit cards deserves special mention. They all earn Chase Ultimate Rewards points, which you can use to redeem an extensive range of rewards. You can also transfer them to personal Chase cards earning Ultimate Rewards points, like the Chase Sapphire Reserve and the Chase Freedom Unlimited, stretching your rewards further.

Some business cards don’t offer many rewards, but have other advantages. Business credit cards like the Brex Business credit card for startups don’t require cardholders to personally guarantee debt. Others like the The Plum Card® from AmericanExpress free up cash flow by offering flexible financing options. You have up to 60 days with no interest to pay your bill, or you can pay early and get a 1.5% discount on your statement balance.

Step 2: Categorize your business spending

With so many business credit cards to choose from, it pays to know how you spend for your business. Choose the wrong card, and it’ll be an uphill battle to meaningful rewards.

Look at your spending for the last few months to a year. Your accounting software may have already categorized your spending for you. If not, go through credit card and bank statements to rank where you’re spending the most.

Common business spending categories include:

  • Car and truck expenses
  • Education and training
  • Employee benefits and payroll
  • Office supplies & postage
  • Marketing
  • Meals and entertainment
  • Personal
  • Professional services
  • Rent and lease
  • Travel
  • Utilities

Also, consider near future expenses with a big impact on your budget. This might include inventory, staff or computer equipment.

Use your past and projected spending to rank the spending from each category greatest to least. Keep the list as a guide when deciding which credit card rewards you the most for your business expenses.

If your numbers make you wonder about the health of your business, compare your category spending percentages to small-business finance expert Mike Michalowicz’s Profit First system. He recommends splitting revenues of up to $250k the following way:

  • 5% Profit (cash-cushion/emergency fund)
  • 50% Owner’s pay
  • 15% Tax
  • 30% Operating expenses

Step 3: Match your business credit cards to your business profile

One of the main considerations when choosing a business credit card is if the card rewards your biggest expenses. For instance, credit cards like Chase’s Ink Business Cash credit card give 5% cash back each account anniversary year on the first combined $25,000 spent at office supply stores and on phone, cable and internet services. That equals up to $1,250 back in your pocket.

However, your credit profile may limit your business credit card options. Credit scores fall into two main categories: personal and business. Card issuers tend to evaluate both with your business credit card application, because creditors see you as personally responsible for your business card. Even so, your personal credit score remains the primary consideration.

Only 21% of Americans have exceptional FICO scores, and 46% have a “Very Good” or “Good” scores. Here’s how personal credit score numbers break down:

  • 800-850: Exceptional
  • 740-799: Very Good
  • 670-739: Good
  • 580-669: Fair
  • 300-579: Very Poor

Dun and Bradstreet, Experian, Equifax and FICO are the four major business credit bureaus providing business credit scores. Each has its own ranges and ways of calculating scores. Experian’s Intelliscore Plus, for example, ranges from 0 (high risk) to 100 (low risk) and looks at factors like your average credit utilization. Here are the ranges for their risk scores:

  • 76-100: Low
  • 51-75: Low-medium
  • 26-50: Medium
  • 11-25: Medium-high
  • 01-10: High

Secured business credit cards like the Wells Fargo®️ Business Secured Credit Card are some of the best business credit cards for bad credit. If you have fair credit, the Capital One Spark Classic business credit card is an excellent rewards card with no annual fees. For small-business owners with strong creditworthiness, instant approval business credit cards like the Blue Business®️ Plus Credit Card from American Express get you your card in no time.

Step 4: Identify how you’ll redeem your rewards

You’re rewarded every time you use your business credit card, so it might as well be for something you value. Consider what types of bonuses interest you the most and which ones fit best with your business lifestyle.

The best credit cards for business travel, for instance, could gather miles for an annual Disney vacation. Although Disney doesn’t have a Disney Business credit card, plenty of other travel cards will get you there. Or maybe what you want is money to pay your business bills to free up cash flow and invest back. Perhaps what you desire above all is the freedom and flexibility to use your rewards however you want.

Whatever the case, keep comparing a card’s reward offers to narrow down your options.

Step 5: Consider the fees attached to business credit cards

Cards with high annual fees may have big perks, but that’s not always the case. Credit card fees can cancel out your reward value if you’re paying more to use your card than you’re making in rewards.

Continue narrowing down your list of contenders based on card fees you may encounter while spending for your business. Card fees to research include:

Annual fee: Many business cards like the Chase Ink Business Unlimited credit card have a $0 annual fee and are a savvy choice for cash-strapped solo entrepreneurs and startups. Others, like the Business Platinum Card® from American Express, have a $595 yearly fee and may be better suited to high-spending businesses.

Employee card fee: Employee business credit cards are convenient and earn you additional rewards. Some cards charge a fee for the extra card, so make sure the credit card offers enough value to justify the cost. Cards like the Southwest Rapid Rewards Premier Business Credit Card provides free employee cards.

Foreign transaction fee: If you frequently make small-business purchases from oversea merchants or travel abroad, foreign transaction fees quickly overshadow any rewards you earn from purchases. Thankfully, not all business cards charge them, such as Capital One’s Spark business credit cards.

Balance transfer fee: Already have a business credit card, but are struggling to pay off your balance because of high interest rates? Transferring your balance to a new card with a 0% intro APR on balance transfers can save you hundreds, if not thousands of dollars on interest during the promotional period. But be wary of regular variable APR rates after the intro APR ends, and balance transfer fees, which can be 3% or more of the transfer. Spark Cash from Capital One doesn’t have a balance transfer fee, but also doesn’t offer an intro APR.

Interest rates (APR): Interest is like a fee because it’s a surcharge on the money you borrow. If you think your small business might carry a balance from month to month or during lean seasons, pick a business credit card with the lowest possible interest rates. It’ll probably save you more money than you’d recoup through reward earnings. The Bank of America® Platinum Plus® Mastercard® Business card has a 0% intro APR for the first seven billing cycles, and starts with a low 11.74% to 22.74% variable APR afterward.

Step 6: Compare welcome bonuses, benefits and rewards for business credit cards

Lastly, you’ll want to compare all the extras each credit card offers and pick the card checking all the right boxes.

Many business credit cards have welcome offers that significantly boost the card’s value. Welcome bonuses vary by credit card, but here are some examples of how much you can gain by fulfilling the spending requirements of your welcome offer. 

Points: If you’re looking for a head start with points, the Chase Ink Business Preferred Credit Card offers 80,000 points (equal to $1,000 in travel) when spending $5,000 in the first three months. 

Miles: You can earn hundreds of thousands of travel miles simply by signing up with the right card. The Spark Miles from Capital One credit card, for instance, allows you to earn up to 200,000 miles (equal to $2,000 in travel). You’ll earn 50,000 bonus miles when spending $5,000 in the first three months, and an additional 150,000 bonus miles when spending $50,000 in the first six months.

Cash Back: If you’d rather have more green in your wallet, the Capital One Spark Cash credit card gives you up to $2,000 in cash bonuses. You can earn $500 in cash back when spending $5,000 in the first three months and an additional $1,500 in cash back after spending $50,000 in the first six months.

Other card perks like the American Express® Business App give you a streamlined way to track your business expenses. And you can even connect the app with QuickBooks for greater efficiency.

It pays to shop with the right business credit card

Take your time when searching for the best business credit cards for your business expenses. You’ll be rewarded every time you shop with the card, and as your business grows, you can take advantage of even more rewards and perks. Just make sure your business credit card aligns with your business spending habits for maximum bonuses and that the card’s redemption options, benefits and terms match your desires and business needs.