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Minority Mindset, LLC is an independent, advertising-supported publisher. We are not an investment advisor. Always do your own due diligence and never blindly listen to a random article on the internet. We do our best to provide financial education with our free videos, articles, tools, and other self-help content. But these are for informational purposes only, they’re not investment advice.

Minority Mindset does not and cannot guarantee the accuracy or applicability of any information regarding your individual circumstances. The examples we provide are hypothetical and we encourage you to get advice from a qualified professional regarding specific investment, tax, legal, and financial issues. Previous market performance does not guarantee future performance.

We want everyone to be able to make educated financial decisions. We do not feature every company or financial product available. However, we’re proud of the financial education and guidance that we provide at no charge.

We’re paid by our brand partners and advertisers. This may influence which products we mention, review, and where they appear on our site. But it does not affect our recommendations or advice.

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How To Choose A Business Credit Card In 5 Steps

July 10, 2020 by Jamie Johnson

Jamie Johnson July 10, 2020

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We only endorse products that we truly believe in. Some of the links below may earn us some extra guac at no additional cost to you. Please pass the chips & thank you for feeding our habit.

As a business owner, it’s always a good idea to try to simplify your monthly expenses.

This will make them easier to track and will help you out a lot come tax season. And one of the best ways to do this is by opening a business credit card.

A business credit card can help you manage cash flow and earn cashback rewards and other perks. Plus, you can even extend this purchasing power to your employees. 

Let’s look more closely at why business credit cards are so beneficial, and how you can find the card that’s right for you. 

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Do You Need A Business Credit Card?

Cash flow management is one of the most challenging aspects of running a business. It’s common for revenue to vary month to month, which can make it hard to pay yourself and manage your monthly expenses. 

Opening a business credit card can make this process much easier. Some cards offer flexible credit limits and the ability to extend your billing cycle without penalty. 

Plus, a business credit card can help you separate your personal and business expenses more effectively.

A credit card makes it easier to track your expenses and quickly identify any tax deductions. And many credit card companies will allow you to export your yearly statements come tax season.

And finally, using a business credit card is a great way to earn cashback rewards.

You can take advantage of cashback rewards through a large signup bonus, or tiered point rewards. Here is how each option works:

  • Signup bonus: With a signup bonus, you’ll earn a certain number of points for spending a certain amount of money after you sign up. For instance, you could earn 100,000 bonus points for spending $15,000 within the first three months of opening the card. 
  • Tiered point rewards: You can also take advantage of tiered point rewards. For instance, you could earn 3% cashback on travel expenses and 1% cashback on everything else. This is a good option if you spend a lot of money on one particular category.

The 5 Steps To Choosing A Business Credit Card

There are a variety of business credit cards to choose from, and the one that’s best for you will depend on your lifestyle and business goals.

That’s why it’s a good idea to understand the different types of business credit cards, as well as the features you should be looking for. 

If you’ve never taken out a business credit card before, it may be difficult to know where to start.

Here are five steps you can take to find the right business credit card.

1. Understand How They Differ From Consumer Cards

You’re probably quite familiar with how consumer credit cards work. However, business credit cards operate a bit differently.

First of all, business credit cards come with fewer protections than consumer cards.

Consumer credit cards are protected by the 2009 CARD Act, but business credit cards don’t fall under these guidelines.

That means your credit card issuer can unexpectedly increase your rates. And they can also shorten the grace period before you’re charged interest on your purchases.

For that reason, it’s a good idea to pay your balance in full every month. 

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2. Review Your Main Business Expenses

The type of business credit card you apply for will really depend on your main business expenses.

So take some time to review your operating expenses from the past six months. This will help you identify what areas will benefit you the most.

For instance, let’s say most of your purchases are spent on travel. Then you’ll want a card that doesn’t charge any foreign transaction fees and offers generous travel rewards. 

Or if you spend a lot of time driving, you may want to look for a card that can help cut your fuel expenses.

The point is, get a sense for your main spending categories and look for a card that offers rewards in those areas. 

3. Decide What Types Of Perks You're Looking For

Many people apply for a credit card because they want to take advantage of cashback rewards.

But this is not the only benefit of taking out a business credit card.

The right card can also provide you with additional protections, like extended warranties on large purchases or travel insurance.

You can also gain luxury perks like lounge access with certain airlines. 

And it’s a good idea to see if there are any special financing offers available.

Many cards will offer an introductory 0% APR for up to 18 months. This can be helpful if you need to make a major purchase and anticipate needing to carry a credit balance for a period of time. 

4. Decide Whether Or Not An Annual Fee Is Worth It

Many business credit cards come with an annual fee, so you’ll need to consider whether or not you can justify this cost. Depending on your desired result, it may be worth it to you to pay the annual fee.

If a card comes with an annual fee, it’s usually because it offers a generous sign-up bonus or cashback rewards.

Sometimes these bonuses justify the annual fee, and sometimes they don’t. You’ll have to do the math and figure out whether you want to pay those costs or not. 

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5. Consider Adding Employee Cards

If you have employees who regularly make company purchases, then it may be worth it to add on employee cards as well.

Many credit card issuers will let you add on these cards at no additional cost. 

Employee credit cards will save you from having to constantly reimburse your employees for business expenses, and you can easily track their purchases.

Plus, employee cards can help you meet spending thresholds during the year.  

Choosing A Business Credit Card – Final Thoughts

Now that you understand why a business credit card is beneficial and how they work, you should be ready to begin your search.

Make sure to compare offers from multiple companies so you can find the rates and terms that are best for you.

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Written by Jamie Johnson.

Jamie Johnson is a Kansas City-based writer who writes about personal finance. She writes for a number of well-known financial sites, including Credit Karma, Quicken Loans, and Bankrate.

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Advertiser Disclosure

Our promise to you.

Minority Mindset, LLC is an independent, advertising-supported publisher. We are not an investment advisor. Always do your own due diligence and never blindly listen to a random article on the internet. We do our best to provide financial education with our free videos, articles, tools, and other self-help content. But these are for informational purposes only, they’re not investment advice.

Minority Mindset does not and cannot guarantee the accuracy or applicability of any information regarding your individual circumstances. The examples we provide are hypothetical and we encourage you to get advice from a qualified professional regarding specific investment, tax, legal, and financial issues. Previous market performance does not guarantee future performance.

We want everyone to be able to make educated financial decisions. We do not feature every company or financial product available. However, we’re proud of the financial education and guidance that we provide at no charge.

We’re paid by our brand partners and advertisers. This may influence which products we mention, review, and where they appear on our site. But it does not affect our recommendations or advice.

More From Credit

  • How To Improve Your Credit Score - 10 Simple Tips!
  • 5 Foolproof Ways To Get Rid Of Credit Card Debt For Good
  • How To Understand Your Credit Score
  • How To Choose A Business Credit Card In 5 Steps

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Disclaimer: The information on this site is of a general nature only. It does not take your specific needs or circumstances into consideration. You should look at your own personal situation and requirements, and seek independent professional advice, before making any financial decisions. Our content is provided for informational purposes only, and no content that is provided or included in our products or services is intended for trading or investing purposes. We will not be liable for the accuracy, usefulness, or availability of any information transmitted and/or made available by way of our products or services, and shall not be responsible or liable for any trading and/or investment decisions made by you based on any such information. For a further understanding of this Disclaimer and use of our site, please see the information contained in our Terms of Use and Advertising Disclaimer.

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