4 Tips for Using Business Credit Cards to Fund Your Startup

Even in the early stages of launching a business, it's good to have a business credit card. You'll be able to keep your business expenses separate from your personal expenses, which makes organizing all your finances much easier.

Business credit cards are also one of the more common ways to fund startups. A Forbes Advisor survey found that 8.4% of entrepreneurs initially funded their businesses using credit cards. If you're planning to finance your startup with a business card, here are a few helpful tips.

1. Get a business credit card with a 0% intro APR

If you know you'll be paying off business expenses over time, the most important feature to look for is a 0% intro APR offer. You'll be able to pay off purchases interest-free for as long as the intro period lasts.

For example, some of the best business credit cards have a 0% intro APR for the first 12 months. That gives you a year to make payments on business expenses.

This is practically a must-have, because otherwise, you'll be paying hefty interest charges. The average credit card interest rate is a whopping 21.59%, according to Federal Reserve data. If you finance $10,000 in startup costs, it would cost you $2,159 per year. A 0% intro APR helps you avoid that, at least during the intro period.

2. Don't take on more debt than necessary

Card issuers often give out generous credit limits on business credit cards. Business owners tend to need more spending power than consumers.

Business Credit Card Comparison

Consider these business credit cards that offer a convenient and efficient way to separate personal and business expenses, simplifying accounting and tax reporting.

Additionally, business cards can provide valuable perks such as rewards points, cashback, and expense tracking tools, enhancing financial management and the potential to help save money in the long run.

Offer	Our Rating	Welcome Offer	Rewards Program	APR
Ink Business Unlimited® Credit Card Apply Now for Ink Business Unlimited® Credit Card On Chase's Secure Website.	Rating image, 4.50 out of 5 stars. 4.50/5 Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor	Earn $750 bonus cash back Earn $750 bonus cash back after you spend $6,000 on purchases in the first 3 months from account opening.	Earn unlimited 1.5% cash back on every purchase Earn unlimited 1.5% cash back on every purchase made for your business	Intro: 0% Intro APR on Purchases Purchases: 0% Intro APR on Purchases, 12 months Balance Transfers: N/A Regular: 18.49% - 24.49% Variable
Ink Business Preferred® Credit Card Apply Now for Ink Business Preferred® Credit Card On Chase's Secure Website.	Rating image, 4.50 out of 5 stars. 4.50/5 Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor	Earn 100,000 bonus points Earn 100,000 bonus points after you spend $8,000 on purchases in the first 3 months from account opening.	Earn 3 points per $1 in select business categories Earn 3 points per $1 on the first $150,000 spent in combined purchases on travel, shipping purchases, Internet, cable and phone services, advertising purchases made with social media sites and search engines each account anniversary year. Earn 1 point per $1 on all other purchases-with no limit to the amount you can earn.	Intro: N/A Purchases: N/A Balance Transfers: N/A Regular: 21.24%-26.24% Variable

Even if your card has a high limit and a 0% intro APR, be careful about how much you spend. If you can pay for expenses in full, that's better than going into debt. And if you need to take on debt, be selective about it.

The larger your card's balance, the more money you'll have tied up in debt payments. If you're using a card with a 0% intro APR, the APR will go up once the intro period ends. At that point, the card issuer will charge your card's go-to rate on any remaining balance you have.

3. Earn money back on your business expenses with welcome offers and purchase rewards

Another benefit of business credit cards is the opportunity to earn rewards for your spending. Many business cards have welcome offers for new cardholders. For example, a card may offer $750 in bonus cash back if you spend $6,000 in the first three months. If you're going to spend that much money anyway, you might as well turn that spending into a welcome offer.

You can also earn rewards on all your business purchases. Some of the best business rewards cards earn a flat rate of 1.5% or 2% on purchases. If your business spends $100,000 per year, that's $1,500 to $2,000 back. There are also cards that earn 3% or more in bonus categories and 1% everywhere else.

There are cash back and travel rewards cards available for business owners. If you know which type of rewards card you want, here are some of the top options in each category:

• Best cash back business credit cards
• Best business credit cards for travel

4. Make your payments on time and pay as much as you can

It's easy to forget about your credit card payment, especially when you're busy getting your business off the ground. But if you miss a payment, your card issuer can charge you a late fee. If you go too long without making a payment, or if you miss multiple payments, the card issuer could also cancel your card's 0% intro APR.

I recommend setting up automatic payments to ensure your credit card bill always gets paid on time. And while you can keep up on your payments by only paying the minimum, you'll spend more time in debt if you do. Unless you need to keep cash on hand for your business, pay as much as possible toward your balance.

A business credit card can be an excellent short-term financing option. You can't do better than a 0% APR, and that's available with some business credit cards, at least for an introductory period. You can also earn money back on your spending if you get a rewards card for your business. Just be careful about how much you finance, and aim to have your card's balance paid off by the time the 0% APR ends.