It used to be that you only had one good option when it came to small business credit cards: American Express.
Now, banks like JPMorgan Chase and Capital One and others are redoubling their effors to get a piece of the lucrative action. They're advertising more heavily to business owners, and they're adding more features to their small business cards and services, according to trade publication American Banker. Part of the reason they're interested is the relative lack of regulatory oversight for business cards compared to consumer cards, where agencies like the Consumer Financial Protection Bureau have paid particular attention to bank abuses.
Here's the rundown from the story:
- Small business cards include both credit cards, where you can carry a balance, and charge cards, where you can't.
- Charge cards don't have preset spending limits, and that might be good for big purchases, although each purchase is approved on a case by case basis.
- American Express offers 12 different business cards, more than any other issuer.
- Bank of America ranked second, with 11 busness cards.
- Other issuers with at least five cards include U.S. Bancorp, Capital One, JPMorgan, and Barclays.
While many small businesses get their start maxing out their personal credit cards, you can get other benefits from business cards once your enterprise is up and running, because they can help you keep business expenses separate from personal charges. That's an important consideration come tax time.
And now that there's more competition, the card companies are offering more services that they hope will entice small business owners to their brands. American Express, for example, uses its Open Forum, to give you advice about things like how to increase revenue or manage cash flow, with no requirement that you hold a card. Chase's Ink card has a corresponding app, called Jot, which helps you keep track of purchases that you and your employees make on the card, along with other expense management tools.
But be careful. While your new business card may be feature rich, less regulation means more potential problems. Unlike consumer cards, it's possible for banks to do things like raise interest rates retroactively on carried debt, or to set higher interest rates than the one you signed up for if you have problems repaying other loans.