Credit card companies want your money. That's nothing new, of course, but the number of cards aimed at small businesses is. "The big card issuers are kind of foaming at the mouth," says Ben Woolsey, director of marketing at CreditCards.com, a credit card information website. Discover (NYSE:DFS), for example, launched its first small-business card this year, and American Express (NYSE:AXP) has recently introduced a small-business card called Plum. The average APR for corporate credit cards is 13.2 percent, according to CardRatings.com, a consumer advocacy and research company based in North Little Rock, Arkansas. But with a good credit rating, you can do better--and get a bevy of other benefits. Here are some of the best credit card offers for small businesses with a strong credit history.
Why we like it: You can probably find a higher cash-back rate, says Curtis Arnold, founder of CardRatings.com. But choose this card if you want to earn rewards on purchases other than office supplies and gas. The card gives you 1 percent back on everything you buy, plus an annual bonus equal to 25 percent of the cash you received that year. There are no caps on how much you can earn. The card also offers a 0 percent APR on all purchases you make until October 2008.
Drawbacks: After October 2008, it has a relatively high 14.99 percent interest rate--so interest charges could wipe out your cash back.
Why we like it: On any debt you transfer when you apply for the card, you get an APR of 2.99 percent locked in for the life of the balance. You also get a good deal on new purchases: The current APR is 9.99 percent.
Drawbacks: It has a weak cash-back program: a .25 percent rebate on the first $7,500 you spend in a year--a whopping $18.75. You get .5 percent back on the next $12,500, and 1 percent back on anything over $20,000.
Why we like it: It's like having a vendor that gives you an early-payment discount on everything you buy, from a cup of coffee to your phone bill. Plum is a charge card, not a credit card, so you have to pay your bill in full. But you can take two months to pay, as long as you come up with 10 percent by the due date on your bill, and you won't accumulate any interest. Or, if you pay in full within 10 days of the end of the billing period, you'll get a 2 percent discount on every purchase, as long as you spend over $5,000 per month. You'll also get Amex's Open savings program, which offers discounts of up to 25 percent with preferred vendors, including FedEx, AT&T, and Hertz.
Drawbacks: There's a hefty $185 annual fee after the first year. And it's currently in limited release, so only 10,000 cards are available.
Why we like it: Advanta currently offers a super-low 7.99 percent APR on purchases, as well as a 0 percent APR on balance transfers for the first 16 months. Advanta will put your company's name on any of its corporate cards.
Drawbacks: The cash-back plan is stingy. After you hit the $5,000 mark, you get 1 percent of everything you've spent. Otherwise, you get 5 percent on your first $1,200 of certain purchases (office supplies, gas, or utilities)--that's $60 at most. You get 1 percent on those purchases once they pass $1,200.
Why we like it: It's the best of the old-school rewards cards. The points are good at more than 825 Starwood Hotels across the globe and can be transferred to more than 30 frequent flier programs.
Drawbacks: Don't expect a great APR. (Right now it's 18.24 percent.) So unless you're a frequent flier, you might be better off simply getting cash back. "You should do the math," says Arnold. "The airline miles cards are kind of the dinosaurs of the rewards cards. Most of the time you're going to come out ahead with just a simple cash-back card."
Why we like it: Discover will give you unlimited fee-free "purchase checks," which allow you to write checks to vendors that don't take credit cards. The checks will be subject to your normal APR.
Drawbacks: After the intro period, the APR is higher than average--it's currently 13.99 percent. And while the card has a solid cash-back program, you'll only get .25 percent back on the money you spend through purchase checks.