Choosing the Right Credit Card for Your Business

Business credit cards can provide a variety of benefits and convenient services for your business, but it’s not always easy to sort through the many competing options. Before choosing a card for your company, make sure you understand how it works, how your business will use it and what its potential perks and costs will be.  

Understand business credit cards  

Business credit cards can offer a wider range of financial flexibility than more traditional business loans or, for small-business owners, personal credit cards. Applying for a business credit card is typically simpler than applying for a loan. However, a business credit card may also come with higher interest rates and may require a personal payment guarantee.  

Personal credit cards can be used for both private and business expenses, but business credit cards are intended only for company use. That can be a perk, since paying for professional expenses with a business credit card makes it much easier to track spending for tax purposes. Business credit cards generally come with much higher credit limits, too, and they can help build your business’s credit history.  

Understand your needs and spending habits  

It’s important to understand the spending needs and habits of your business before selecting a credit card. If your business experiences irregular cash flow, you may want to choose a card with a lower annual percentage rate so you can carry a balance. If you don’t need that feature, consider a card with a higher APR and more rewards.  

Business credit cards offer a variety of rewards and perks, so it’s a good idea to examine which of these might apply to your business. Some cards offer 1 percent to 5 percent cash back for specific purchase categories. Do your business expenditures, such as office supplies, cellphone service or client meals, fit into these categories? If so, a cash-back card could save you money. Some cards also offer cash back or reward points for gas, flights, hotels and restaurants. Other perks may include signup bonuses, 0 percent introductory APRs and airport lounge access.  

Understand potential costs  

As you consider the benefits of a dedicated credit card for your business, also keep potential costs in mind. Review the card’s APR, whether that APR is fixed or variable and whether you’ll carry a balance, since interest charges can add up quickly. You’ll also want to keep an eye on annual fees. In some cases, the rewards offered by a card may outweigh the fees. It’s also wise to understand the costs of late or missed payments, including fees and higher APRs.  

Understand your options  

Many online resources are available to help you compare business credit card options. Use reputable comparison tools and issuer materials to review card terms, rewards, fees, interest rates and eligibility requirements before applying.  

No matter which card you end up selecting, be sure to carefully read the terms, conditions and fine print so you’ll have a full understanding of your card’s benefits, limitations and costs. Once you have your card, make sure your business has procedures for using it with maximum effectiveness. With careful planning and management, your business credit card can be a powerful financial tool for your company. 

Looking for options? 

Choose from our popular business credit card options such as low rate, cash back or flexible rewards to find the one that works best for your business.