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How to Find the Best Business Credit Card For You

When you’re picking out the best credit cards for small business, there are some obvious factors: their APR, credit limit, and the fees associated. But it’s also important to think about your specific business and what its unique needs might be—and match those up with the right business credit card.

  • Do you travel for work?
    Look at cards with airfare and hotel perks.
  • Do you need to fund startup costs?
    Focus on credit limit and low promotional APR.
  • Do you carry out business internationally?
    Pay attention to the foreign transaction fees and other hidden charges for purchases outside the country.
    There’s a lot that goes on with a shopping for and applying for a business credit card, so we break down everything you need to know in this ultimate business credit card guide.
How a Business Credit Card Works

The concept of a business credit card is simple: It’s a credit card, designed to be used by business owners.

Like a personal credit card, credit cards for small business allow you to cover your expenses, build credit, and earn rewards.

But here’s the difference: A business credit card should be used for business expenses only, and the rewards you’ll earn are based on spending categories that are tailored to business owners (like office supplies, gas, internet and cable services, advertising, and so on).

What are the workings of a business credit card?

Again, it’s almost identical to a consumer credit card: You make purchases on the card, and repay them later. You typically can only borrow up to a certain amount (unless you have a business charge card—we’ll get to that later). For business credit cards, you’ll need to pay back what you owe before the month’s end, or you’ll be charged interest on the balance you roll over.

The Pros and Cons to Consider with Business Credit Cards

Whether you’ve just started a small business or you’ve been at the helm for some time, a business credit card can come in handy. It gives you easy access to a revolving line of credit, which you can use for purchases or cash withdrawals—when you need them, without the hassle or delay you might find from other types of financing.

Like with consumer credit cards, small business credit cards need to be used wisely. Otherwise, you might get caught up with unnecessary debt or tarnish your credit score.

Here are some smart ways to use a business credit card if you’re looking to improve your business.

(We’ll go more in-depth with business charge cards, too, but keep in mind that these 6 strategies apply to both.)

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Simplify Your Bookkeeping

Having a business credit card will separate your personal and business expenses—making your life way easier at tax time. If you consistently use the card for routine purchases, you can easily track, categorize, and analyze your expenses through your monthly statements.

Provide a Cash Flow Cushion

Does your cash flow ever lag from a decrease in sales or a delay in payments? A small business credit card would let you pay expenses and make purchases—stretching your dollars without dipping into your cash flow.

Need help keeping track of your cash flow? Download our free cash flow statement template.

Breathe Easy with Higher Credit Limits

If your business tends to have high monthly expenses, or you have a startup trying to gain steam, then business credit cards with high credit limits will increase your purchasing power…

And your potential for growth.

Establish and Improve Your Business Credit

There’s an easy way to build your business credit responsibly: small business credit cards. Just pay your bills on time, keep your credit card balance manageable, and stay within your credit limit.

Perfect credit doesn’t come overnight, but before you know it, that business credit score will rise.

Think of it as an investment towards the best credit cards for small business and business loans.

(Need to build your credit? Here’s a list of the best business credit cards to help you do it.)

Take Advantage of Rewards and Perks

Don’t forget about those rewards, bonuses, and perks that come with business credit cards!

Most small business credit cards offer higher cash back rewards than consumer cards do, alongside bonuses on typical business buys like internet and cable services, office supplies, gas, travel, and restaurant bills.

Your business credit card will have some perks you can take advantage of to save money for your business—no matter the kind of business you run.

It’s smart to use your business credit card on regular expenses so your reward points add up faster.

Make Online Purchases

Most of your transactions probably take place online, and business credit cards are just the easiest way to make that happen.

Not everyone deals with PayPal and ACH—but credit cards are accepted by everyone. Rack up rewards, separate your business and personal expenses, and build business credit by moving your online purchases onto your small business credit card.

What to Watch Out for With Business Credit Cards

All financial products come with downsides, and business credit cards are certainly no exception.

So what are the cons of using a business credit card?

Here’s what to keep in mind.

Personal Finances and Credit Score are at Risk

When you take out a business credit card, you’ll likely have to sign a personal guarantee. This guarantee puts you personally responsible for business debts you put on the card.

This means that if your business can’t end up paying the balances on the card, you will have to pay the debts on your card. If you don’t manage your spending on a business credit card, you could put your personal finances at risk too.

In the absolute worst case scenario that your business has to close its doors and can’t pay off its business credit card debt, your failure to do so will show up on your personal credit report.

Consumer Protections Don’t Roll Over to Business Credit Cards

The federal Credit CARD act of 2009 applies to consumer credit cards, alerting users when interest rates change on their cards.

This protection does not apply to credit cards for small business. So if you’re a credit card user that tends to roll over balances and accrue interest on those balances, you might suffer from the lack of notification that your interest rates are changing.

While not a dealbreaker for using business credit cards, it’s important to note that some of these typical protections might not apply to your business credit cards.

The Different Types of Business Credit Cards: Revolving, Charge Card, Secured Card

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Did you know that there are different types of business credit cards?

That’s right—there are 3 general varieties of business credit cards. Let’s walk through a high-level overview of each.

Revolving Business Credit Cards

A revolving business credit card is the type of credit card you know best. In fact, when you hear about “business credit cards,” you can almost always assume that the card is revolving.

Revolving business credit cards come with a set credit limit (determined by your credit history along with your personal and business finances). You can spend up to that limit.

With these typical business credit cards, you can roll over your balance from month to month, only paying the minimum amount of payment required (if there even is one). If you choose to do this, though, your balance will accrue interest, determined by the effective APR you qualified for.

Unless you absolutely cannot do so, we recommend paying off your balance on your revolving business credit card each month.

Business Charge Cards

If you’re shopping around for credit options, don’t overlook business charge cards.

Depending on your financial strategies and the structure of your small business, a business charge card might be a better option than a business credit card.

Like business credit cards, business charge cards extend lines of credit to users. They also have similar rewards, perks, annual fees, and foreign transaction fees.

There are two things that set them apart in a big way, though:

There’s No Preset Spending Limit on a Business Charge Card

Unlike business credit cards, which usually have preset spending limits based on what you end up qualifying for, business charge cards don’t come with preset spending limits.

With a business charge card, you’ll have the flexibility to make large purchases without reaching your limit or restricting yourself a little down the line.

While it’s possible that your charge card issuer might add a spending limit if your payment history and purchase habits seem concerning, this almost never happens. If you’re a responsible borrower, you’ve got nothing to worry about.

Also, your rewards directly correlate with your spending—and since you have no preset spending limit with a charge card, there’s nothing stopping you from essentially using that rewards system as a secondary revenue stream of sorts.

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You Need to Pay Off Your Balance Every Month on a Business Charge Card

While business credit cards let you roll your balance over from month to month, building interest along the way, business charge cards need to be paid in full every month.

If you miss a payment, you’ll get charged a hefty late fee—typically 3% of the balance—and risk getting your line of credit suspended.

On the flipside, because you’re (ideally) paying in full each month, you won’t need to deal with interest on your expenses, surprise fees, or outstanding debt.

Secured Business Credit Cards

Another type of business credit card you might come across is a secured business credit card.

A secured credit card is just like a secured loan—you offer up some sort of security (typically a deposit, or a physical item of collateral) to the lender issuing you money. This ensures that, in the worst case scenario you can’t pay back what you owe, they’ll get the money their money back.

Most credit cards are unsecured credit cards. Your spending limit on your unsecured business credit card is totally dependent on the quality of your credit score.

A secured business credit card, on the other hand, requires a deposit before you take out the card. Your spending limit is then determined by your deposit—you can borrow up to whatever amount you offer as security.

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How to Pick the Right Type of Card

The type of card you choose should be based on how you intend to use it, what you’re comfortable with, how your small business works, and what you qualify for.

If you don’t mind having a spending limit and you’re not sure you’ll be able to pay your balance in full each month, then a business credit card is a good choice. There’s the safety net of rolling over your monthly payments—though it’s accompanied by growing interest—and a diversity of choice in the cards and companies available.

But if you prefer the flexibility of no preset spending limit—letting you make large purchases without having to worry about your cap, and you’re confident you’ll pay the balance in full each month, then a business charge card might be for you. A charge card will also promote good spending habits, help you improve your business credit score, and often comes with substantial rewards.

As for the question of business credit card versus secured business credit card, the decision really comes down to what stage you’re at for your business, and what you qualify for.

Newer business owners with poor or no credit will have the easiest time qualifying for secured business credit cards, and can use them as stepping stones towards better cards in the future.

How to Search for the Best Business Credit Card for You

There are hundreds of business credit cards on the market.

If you’ve never searched for a credit card for your business before, your head might be spinning. We’re here to help you walk through the search process.

Here’s what you need to be thinking through when you search for a business credit card.

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Frequently Asked Questions

How do you search for the best credit cards for small business?

There are hundreds of business credit cards on the market.

If you’ve never searched for a credit card for your business before, your head might be spinning. We’re here to help you walk through the search process.

Here’s what you need to be thinking through when you search for a business credit card.

How do you want to use the card?

First, you should think through how you’re planning on using the business credit card.

Some businesses take out business credit cards for different needs, like establishing business credit, cushioning their business’s cash flow, or making a large purchase and paying off debt over time.

The reason why you’re taking out a card will help point you to the right category to search through.

For instance, if you’re using a business credit card to build or simply establish your business credit, you might want to consider a secured card.

If you need to make large purchases for your business (ones that you know you’ll have the cash on hand to pay off), then a business charge card could give you more flexible spending limits.

What kind of rewards do you want?

Just like consumer credit cards, there are categories of rewards and earnings for the business credit cards.

These are the categories you should be knowing well: travel, cash back, or simple rewards points.

If you could really benefit from some free travel or other perks for your business, then you should invest in a card that helps you maximize your travel reward points. This is often the best strategy for any business owners who travel a lot, or those who have employees that travel often.

But if you’re just looking for a simple, no-fuss way to earn cash back as you spend, you should of course look to a cash back business credit card.

On the other hand, a rewards points credit card will give you flexibility on how you’d like to redeem points, whether for restaurants, gift cards, travel, hotels, and more.

Fees vs. rewards: what you should be willing to pay?

You can easily find a rewarding business credit cards without an annual fee. (And we’ve listed out the best no fee business credit cards here.)

But you might actually find a business credit card that comes with rewards that well outweigh any fees you might have to pay.

So before you cross your business credit cards with fees off your list, consider what rewards they might rack up for you. Great rewards can make a fee a worthwhile expense.

What are your spending habits?

How do you plan on putting purchases on the card, and on the flip side, how do you plan on paying those off?

Your spending habits should be a consideration in your search for a business credit card.

If you’re going to continually put large purchases on your business credit card, a business charge card without a spending limit might be a better fit for you instead.

But if you’re likely to carry over your balance most months, you shouldn’t take out a business charge card.

If you only need to roll over your balances for a finite amount of time, consider using a 0% introductory APR card so you don’t accrue interest during the intro period.

What category do you like to spend the most in?

Business credit cards typically let you earn rewards in specific kinds of spending categories—like gas, office stationery and supplies, restaurants, internet services, etc.

How you plan to use your business credit card should point you to a card with spending categories that can help you earn the most.

For instance, if you have employees making house calls or deliveries, you might want a card that helps you earn as you purchase gas. If you’re often taking clients out for lunch, a business credit card with a restaurant category would be most beneficial to you.

What grace period length do you require?

Understanding your business credit card’s billing cycle, and the specific day that cycle closes, will let you make use of the maximum number of days you can pay the bill without being charged interest on what you owe.

That’s called your grace period, and it’s key to owning a credit card—especially if you’re using it as a loan, or for large purchases.

What cards are commonly accepted?

Before deciding, be sure you know which small business credit cards your suppliers can accept!

Though Visa, American Express, and MasterCard are common, your vendors might not accept them all.

Does your preferred issuer report to the business credit bureaus?

Double-check that your business credit card issuer reports your payment data to a business credit reporting agency—like Dun & Bradstreet, Equifax, or Experian. This can help you build your business credit record.

By the same token, make sure the credit card company won’t report that information to consumer credit agencies, which might cause your business credit card to appear on your personal credit report. To protect your personal credit and to establish your business credit on its own, you’ll want to keep those records separately.

Some credit card companies only report business activities on your personal credit report if the business is delinquent or the account is in default—so be aware.

Do you need any other perks?

Beyond just points rewards and cash back, business credit cards also offer perks you might not know you needed.

This could be purchase protections, including insurance against damaged items, travel purchase protections, and so on.

You might not make your business credit card decision based on this, but the extra perks that come with these cards are worth considering.

Can you use a business credit card in the place of a business loan?

It’s best to use small business credit cards and charge cards for your monthly expenses and working capital needs, since they basically function as revolving lines of credit with high interest costs.

However, there are definitely some advantages to seeing a business credit card or charge card as a kind of small business loan instead.

You can look to your business credit card when you…

Need a Quick Loan

Applying for a quick and small business loan can take a while—so a business credit card or business charge card is a good option if you’re in need of a quick turnaround.

It’s also an alternative to look into if you can’t qualify for a bank loan or an SBA loan just yet.

Need Flexibility

Business credit cards give you the freedom to borrow as much or as little as you need each month—within the credit limit—and use those funds however you like. Plus, business charge cards don’t have a preset spending limit, making them even more flexible.

Lack Collateral

You don’t need collateral to apply for or use small business credit cards or business charge cards. So, if you don’t want to risk your assets (or don’t have any to begin with!) you can still borrow from your credit card or charge card.

However, you may need to sign a personal guarantee, but more on that later.

Want to Take Advantage of 0% APR

When it comes to why business owners absolutely need business credit cards at their disposal, the chance to take advantage of a 0% APR period is a top reason.

Just imagine what you can do with that introductory 0% APR for your business. In a lot of ways, putting expenses on a business credit card with a 0% intro APR period is like using a free loan. Plus, if you have existing balances on other business credit cards, you can transfer them over.

But remember—it’s an introductory rate, so make sure you can pay the balance before that rate spikes. Also, you might need a certain credit score to qualify for the promotional rate in the first place, so research your business credit card options closely.

How do you apply for a business credit card or a business charge card?

The application process for business credit cards or business charge cards is similar to that of consumer credit cards. Check your credit report first—as that’s an important factor—and look for any errors in order to improve your score.

Also, check out these steps to improve your credit score.

Having the best credit score possible will open up your business credit card options.

After that, applying for a business credit card is very simple.

When applying for a small business credit card or charge card, make sure you have the following information on hand:

  • Business name and location
  • Tax identification number (EIN)
  • Business’s financial information
  • Your Social Security Number (SSN)

You might also want to look into applying for additional cards for your employees. Each employee may need to fill out a separate application, but they’re not required to act as personal guarantors. Some cards allow you to set different credit limits for employee cards, too. If you’re planning on giving lots of employees business credit cards, you might want to filter your search for business credit cards that have additional cards at no cost.

Will you have to sign a personal guarantee when applying?

The quick answer is, “Yes.”

Nearly all business credit cards or charge cards require a personal guarantee from the business owner as well.

As a small business owner, you’ll inevitably get tied to your business by banks—and because small business credit cards and charge cards don’t require collateral, your personal guarantee gives card issuers a measure of security in case your business fails, and your business can’t repay its credit card debts.

There are a few ways to avoid making a personal guarantee, though you’ll need to have an established corporation or LLC with good credit history.

Here’s how people get out of the personal guarantee:

  • Some cards waive the guarantee if you have more than $5 million in annual sales.
  • If you’re on time with your payments and have an excellent credit rating, you can apply to release your business from a personal guarantee on an existing business credit card.

How do you improve your credit score using a business credit card?

You might have heard that the best credit cards for small business help establish and improve your business credit. That’s true for almost all business credit cards, but only if you use your card responsibly.

Let’s take a step back though. What is business credit, and how is it different than personal credit?

Your business credit score is similar to your personal credit score, except it measures your company’s creditworthiness instead. Traditional banks and lenders—and especially the Small Business Administration—will look at your business credit score when considering you for a loan or line of credit.

As we discussed, small business credit cards and business credit cards are a great way to develop your business credit history.

And if you’re just building your credit history with a business credit card, you might not be familiar with how a business credit score works.

Here are a few common questions—and answers—about business credit.

What's the range?

Unlike a personal credit score, a business credit score ranges on a scale from 0 to 100. A business credit score can be broken down into three distinct ranges for ease of use.

80-100: Low risk of late payments

50-79: Medium risk of late payments

0-49: High risk of late payments

How is it determined?

The three major credit bureaus (Experian, Equifax and Dun & Bradstreet) use different methods to determine creditworthiness—like timeliness of payments, years in business, lines of credit, collection amounts, and percentage of available credit used—but each of them analyzes data only from your business, not personal accounts.

Unlike your personal credit reports, your business credit reports aren’t free. Here’s what they cost:

Dun & Bradstreet: $61.99

Equifax: $99.99

Experian: $36.95

How to Build Your Credit With a Business Credit Card

There are a bunch of different ways to build business credit (taking out business checking accounts, for instance, is one of them).

However, taking out a business credit card is one of the most important first steps.

As you put purchases on your business credit card and pay that off regularly and on time, that behavior will be reported to the business credit bureau.

Using your business credit card often and responsibly will help establish that business credit history you need to qualify for other business financial products.

Pro tip: Just as with personal credit cards, you want to keep tabs on your credit utilization with business credit cards, too. Try to keep your utilization of the card below 30% of your total credit limit. Doing so will help improve your credit score.

What are the best practices when using your business credit cards?

Business credit cards and charge cards definitely come in handy for many business owners.

But with the plastic in your pocket, it’s especially important to be a responsible borrower and business owner, both at the same time.

Follow these rules and you should avoid the most common pitfalls.

Never Mix Business and Personal Expenses Together

This motto remains the core of small business financial management. A small business credit card or charge card helps keep you and your business separate, so don’t blur the line by making personal purchases with your business card or transferring a personal credit card balance to your business credit card.

Don't Take on Too Much Debt

Your small business credit card is a great tool, but don’t make the mistake of overextending your business now.

Keep an eye on your debt-to-cash and debt-to-available-credit-limit ratios.

Even if you have a charge card, with no spending preset limit, stay honest with yourself so that you won’t spend more than you can repay.

Keep an Eye on Your Employees For Security Reasons

Hopefully, you’re only extending cards to employees you trust will use them responsibly. However, it’s important to keep an eye on how your employees are putting expenses on their cards (assuming you choose to extend employee business credit cards).

Read the Terms and Conditions

Remember, business credit cards don’t have the same protections as consumer credit cards, so you want to stay on top of your card’s terms and conditions yourself. These could change without you knowing, affecting how you pay the card or how you earn rewards.

Monitor Interest Rates

Closely monitor the interest rates on your credit card. Though most card issuers give you notice before increasing the rate, you’re ultimately responsible for keeping an eye on it—and factoring it into your budget. (Note that charge cards don’t have interest rates! Do watch out for any changes to your late fees, though.)

Deduct Interest Rates

Speaking of interest rates, don’t forget that the interest you paid on your business credit card is tax-deductible!

Make Regular Payments

Pay off your balance on time and in full, whenever possible, to avoid interest altogether.

Only Charge the Essentials

Treat your business credit card like a loan and only take what you need. Remember, it’s basically a line of credit—so use it for revenue-generating investments like equipment or inventory, and never for payroll or debt consolidation.

Keep an Eye on Your Cash Flow

Get a sense of when you have the most cash on hand in any given month.

This way, you can try to negotiate with your business credit card issuer to have a due date that falls in line when your cash flow is highest. This makings paying your business credit card easier on your business.