How to choose a small business credit card

If you’re a small business owner, having a business credit card can have multiple upsides. But choosing which credit card, or even what kind of card, to use can be difficult. We set this guide up for that very reason. To help you choose the right card for your business.

How do you choose a credit card for your small business? Or a first business credit card for a new business? First, you need to think to yourself about what you need the credit card for. Are you looking to simplify your accounting? Do you need the extra spending power? Is it just you using the credit card, or will your employees have access to it too?

The credit card that is best for you depends on your answers to these questions. Once you know what you need, you’re ready to crack on.

We’ll talk first about whether you need a business card at all, or if a personal card might suffice. Then we’ll discuss the different kinds of business credit cards and which one best suits your needs. We’ll find out what to look for in a small business credit card. We’ll end with a guide to what we think are the best small business credit cards right now, including prepaid business credit cards.

Why use a business credit card?

Do you have to use a business credit card? The short answer is no. For the most part, both personal and business cards work in a similar way. They can cost the same and they’re both tax-deductible if you use them for business costs.

But if they are so similar, why even apply for a business card? What are the benefits of small business credit cards?

Higher credit limits – The first benefit is immediately the biggest one for most businesses. Many small business credit cards allow you to get a higher spending limit than personal credit cards do. This is because they count not just your personal income and credit score, but also the cash flow of your small business. Check this blog out for more information on how to get the most out of your application for a small business credit card.

Bookkeeping benefits – Even if you’re not interested in higher spending limits, small business credit cards can help you simplify your bookkeeping. Having all your business-related expenses split from your personal ones helps when you’re doing your taxes. That way you know what you can deduct and what you probably can’t.

Specific bonuses for small businesses – Credit cards often offer extras and discounts on certain products and services. Think restaurant spending, plane tickets. Business credit cards often specialize in bonuses aimed at, you guessed it, businesses. Think of phone bills, supply costs, and so forth. If you’re looking to use a credit card for your business, check the extras they offer to see if that’s something you’d use.

Look here for more information on the benefits, and downsides, of business credit cards.

What to look for in a small business credit card

What makes a great small business credit card is subjective. It probably varies depending on your industry. It’s still true though that not all small business credit cards are created equal. When choosing which business credit card is best for you and your company, there are a few things to keep in mind.

Is its annual fee a good value for your company? – Most credit cards have an annual fee. This is true for small business credit cards as well. So you want to make sure that the annual fee is a good value for your business. The larger your company is, the more sense it makes to have an expensive credit card. Especially if it offers good benefits.

How big is the signup bonus? – One of those benefits is the signup bonus. Most businesses have higher spending than individuals. The annual fee, the spending limit and the signup bonus will reflect this. Making it even more important to compare credit cards and their bonuses.

What rewards do you accumulate? – Some of the best small business credit cards will reward you with points or cashback if you use them a lot.

Which fringe benefits does the card offer? – Many small business credit cards offer various rewards and perks. Different cards will be appropriate for various businesses. A card that offers numerous travel-related perks, for example, will provide the most value to a business owner who needs to travel a lot.

How many people use the card? – Is it just you that will use the credit card? Or will your employees have access to it too? Do you need more than one card? A system with multiple small business credit cards is always more expensive. But if you need employees to be able to pay with a card then the expense might be worth it.

How good is the card company’s customer service? – A credit card company with excellent customer service can make life easier for business owners in the long run. Don’t let something as simple as poor customer service harm your business.

Types of business credit cards

Business credit cards, like personal credit cards, come in multiple varieties: charge cards, prepaid credit cards and regular credit cards. We’ll discuss each with its benefits and downsides below.

Charge card

With a charge card, there is no set spending limit (though this does not imply unlimited spending), so you must pay the bill in full each month. This is handy if you’ve got an irregular cash flow, which hurts your spending limit on a regular credit card. More on the benefits of charge cards can be found here.

Credit card

A business credit card works exactly how you’re used to. It has a set spending limit but allows you to carry a balance from month to month, with interest. These cards also provide introductory 0% APR periods, which are not available with charge cards.

Prepaid card

Prepaid credit cards don’t work with debt. This makes them the cheapest option by far. They can also work great for limiting spending. Prepaid credit cards are easy to buy and top up. You can find a lot of them on Recharge.com. Visit our prepaid credit cards page to find what we have on offer.

Best small business credit cards

By now it’s probably clear that it’s not easy to point at one small business credit card and say it’s the best one. That said, we’ve picked three that excel for small businesses. and startups. So that you can start your search for the perfect small business credit card for you.

Ink Business Unlimited Credit Card – A simple allrounder credit card

The Ink business unlimited credit card offers some benefits for a small business owner looking to simplify their expenses. It has no annual fee and offers a fixed charge back rate of 1.5%. That way you don’t have to fiddle with a points system to get the most of this card.

It also offers extra benefits, like discounts on travelling and gift cards.

Handy for business owners is its fraud protection and zero liability policies. Meaning you won’t be held accountable for unauthorised payments done from your card.

In the end, this card is perfect for small businesses that want to enjoy the full benefits that a small business credit card can offer.

The American Express Plum Card – A charge card for starting businesses

The American Express Plum Card is one of the most flexible credit cards around. If you have an irregular cash flow but know you can pay your bills on time, then this card is perfect for you.

The best part of the AMEX Plum Card deal is that the balance fees are waived if you pay off your monthly spending within 60 days of the due date.

You won’t have to pay any additional fees on your spending as long as you make your minimum payment on time and pay the remaining statement balance within the Plum Card’s 60-day grace period.

Keep in mind, however, that the Plum Card is a charge card. Charge cards are designed with the expectation that you will pay off your balance in full every month, so if you still have a balance after the 60-day grace period, you will face steep late fees. These will cost you far more than a regular business credit card.

BITSA – the perfect prepaid business credit card for small businesses

If you’re looking for a small business credit card without incurring any debts, then the BITSA card is perfect. Low annual costs and no starting fee make this the cheapest card to use by far.

Prepaid credit cards like BITSA are even more perfect if you have a small business with employees that need a credit card for travel. How do you control these expenses without using the main company account?

BITSA is extremely easy to get and use. You don’t need a high credit score. You can get a digital prepaid credit card in just a few minutes.

Topping up your prepaid card is just as easy. Just go to the BITSA card page here on Recharge.com. Select the amount you need and pay with your preferred payment method. You’ll receive your code within 30 seconds. Enter that code on the BITSA site or app and the money will be added to your BITSA card immediately.