Best Business Credit Cards

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As the number of community banks dwindle, it’s getting harder for small businesses to get access to the credit they need to finance their day-to-day expenses. Proactive business owners can take a big step for their business by opening a business credit card account to build credit history and banking relationships that can pay dividends year after year.

It’s a slow climb to hitting your business goals when burdened with high-rate debt and nuisance fees. Which is why the lens through which we review offers is heavily influenced by helping you earn premium rewards without incurring unjustifiable annual fees. At a high level, these two factors are most important and both heavily influence our leading picks.

Credit cards for business use typically have a few features that personal credit cards don’t have, including higher credit limits, more travel perks, and higher limits on insurance that you get for free when you use the card to make a purchase.

Here’s how business cards differ from personal cards:

• Business-focused rewards -- Business cards often pay out bonus rewards for spending in bonus categories. Some offer bonuses for spending on phone bills, office supplies, online advertising, and other common business expenses.
  
• High credit limits -- Businesses simply have larger spending needs than individuals, so business credit cards typically have higher credit limits. Whereas the average person might not need to swipe their personal cards for a $25,000 purchase, many businesses incur similarly large bills to pay various suppliers and vendors.
  
• Perks for business users -- Some cards offer features for frequent fliers like credits to pay for TSA Pre✓or Global Entry, airport lounge access, and increased travel insurance. They also typically offer no foreign transaction fees, so you won’t have to worry about paying a fee when you make purchases with companies who process payments through a foreign banking institution.
  
• Credit bureau reporting -- Business cards report to business-specific credit scoring databases, helping you build credit under your business’s name.

There are many reasons why small business owners and managers turn to a business-specific credit card rather than using a personal credit card. Here are some reasons why you might want to have a business card:

• Build business credit -- Just as there are credit bureaus for personal credit reports, there are credit bureaus that keep information on businesses, too. A business card can help you build credit with Dun & Bradstreet, Experian Business, and Equifax Business, helping your business build up a record of being a good borrower and partner.
  
• Get organized -- Having one card that you only use for business purposes can make bookkeeping easier, since the purchases can be readily imported into common accounting software like QuickBooks.
  
• Earn higher rewards on business categories -- Some business cards offer category bonuses that you won’t find on a personal credit card. We’re not aware of personal cards that offer bonus points or miles around the year for office supplies or online advertising, but many business cards do.
  
• Build a business banking relationship -- Business credit cards can help you open the door to getting other forms of financing for your business at a later time. Whether it’s a lease on a car or piece of equipment, or a credit facility to help you finance inventory, a bank is much more likely to make other types of financing available to businesses with which they already have a relationship.
  
• Get free employee cards -- Whereas many high-end rewards cards charge an annual fee to add an authorized user, many business cards allow you to add authorized users without paying an annual fee for each additional card.
  
• Auto rental insurance coverage -- Personal credit cards offer collision damage waivers (CDWs) that protect you if a rental car you pay for with the card is returned with damage. However, most specifically exclude cars rented for business purposes. Business credit cards provide coverage for cars rented for business use -- including some cards that don’t have an annual fee!
  
• Extended warranties -- One key feature of business cards is that many offer extended warranties on items you purchase with the card. For business users who need to purchase expensive electronics and equipment, these warranties can add a lot of value, extending many warranties for a year beyond the manufacturer’s original warranty.
  
• Fraud protection -- Checks and debit cards are inherently less secure than credit cards. When you hand someone a check, you’re giving them a piece of paper with your bank account number printed along the bottom. And though debit cards offer some fraud protection, fraudulent purchases that you don’t catch in time can become your loss. By law, credit card users are only liable for up to $50 of fraud losses, but issuers rarely (if ever) pass on any of the loss to their customers.

Virtually all business credit cards have some form of rewards program, typically paying rewards in the form of cash or travel value. Both types of rewards programs have their own pros and cons, so the choice ultimately comes down to your business’s spending needs, and your travel expenses.

Here’s a table to compare and contrast the ups and downs of each card type.

The best business credit cards for travel and cash back generally offer rewards yields of 2%, meaning you receive travel or cash back valued at 2% of all purchases you make on the card, so the decision usually comes down to how you want to redeem the rewards you earn.

People who prefer to shop around for travel needs will naturally prefer a statement credit travel card, like those offered by Capital One. On the other hand, people who are members of airline or hotel loyalty programs may prefer points-based rewards programs such as those offered by Chase, since points can be transferred and redeemed for travel and upgrades that value points at higher than the stated rate of $0.0125 per point.

Getting a business credit card isn’t always as easy as getting a personal credit card. Given that business card users tend to spend more heavily than personal card users, the underwriting process can be a little more stringent.

Here are some things that will make it more likely you’re approved:

• Have good to excellent personal credit scores -- Most, but not all, business cards require very good or excellent credit. A credit score above 720, the point at which you are said to be a “prime” borrower, is ideal. While credit card companies will consider the business’s earnings and creditworthiness when they decide whether or not to approve an applicant for a card, personal credit scores are also very important to underwriting decisions.
  
• Have business history -- While it’s possible to get a business credit card for a start-up or young business based on the applicant’s personal credit history, applicants who have an established business are more likely to get instant approval for business credit cards. Card issuers can look through government databases to see when your LLC was initially formed, for example.
  
• Use an EIN on the application -- An EIN, or employment identification number, is to a business what a social security number (SSN) is to an individual. Data points suggest that applicants who put their businesses’ EIN and their personal SSN on an application are more likely to get approved than people who only use a SSN, though this varies by card issuer.
  
• Apply for the right card -- Our list of the best business cards includes cards that go up and down the credit spectrum. As a rule of thumb, cards with a lower minimum credit line are more likely to approve people with lower spending needs and credit scores than cards with higher minimum credit limits. Case in point: Capital One® Spark® Cash for Business, which has a minimum credit limit of $2,000, requires higher credit scores than Capital One® Spark® Classic for Business, which has a minimum credit limit of $500.

One of the interesting things about business cards is that, besides elevated rewards rates, you don’t have to pay an annual fee to get additional perks from a business card.

For example, if you want a personal card that offers primary insurance against rental car damage, the least expensive option carries an annual fee of $95. However, business cards are different. Capital One® Spark® Classic for Business offers primary auto rental coverage for vehicles rented for business use, and it doesn’t carry an annual fee.

Therefore, we tend to think that it’s worth paying an annual fee only if you spend so much that a higher rewards rate pays for the annual fee. The table below compares two popular Capital One business cards on the basis of rewards and annual fees.

Ultimately, the best business rewards credit card for you depends on your spending needs. It makes sense to pay the $95 annual fee on the Capital One® Spark® Cash for Business card if you’ll spend more than $9,500 per year, -- the point at which the higher rewards rate pays for the annual fee. The math is as follows: 95 ÷ 0.02 = 9,500. Those who spend less than $9,500 per year would be better suited for Capital One® Spark® Classic for Business.

Business credit cards offer a lot of spending power, but that comes with a lot of responsibility, too. Here’s a checklist to help you decide if a business card is right for you.

• You own your own business. At the risk of stating the obvious, owning a business is a prerequisite to getting a business credit card. It doesn’t have to be a big business -- it could just be a side gig -- but you should have some reasonable need for a business card to apply for one.
  
• You want to establish a business banking relationship and credit. This is by far one of the best reasons to apply for a business card. Having a relationship with a major bank can be useful if your business will need other forms of financing at a later time to purchase cars, equipment, or real estate.
  
• You won’t carry a balance. There are very few businesses that can afford to pay double-digit interest rates to borrow money. Credit cards are one of the most expensive sources of financing, so credit cards are best used as a payment method, not a financing method.

You know that you’re personally liable. Charges you make to a business credit card can be a personal liability, and though many business cards will not report good payment history to the personal credit bureaus, they will report it if your account is seriously delinquent. For this reason, a business credit card is not usually a good solution for building personal credit history.

To recap, here are the best business credit cards