Financing a new business can be rough for a lot of entrepreneurs. Without substantial working capital, it's easy to find yourself falling behind on vendor payments or even monthly operating expenses until you get your cash flow situated. What's a startup to do?

A lot of small business owners turn to a business credit card when they're first establishing their businesses. Not only does a business credit card serve as a reliable stop-gap when money's tight, it can also help you establish your business credit, something that can have a long-lasting impact on your ability to seek financing later for things like expanding your business.

Is a Startup Business Credit Card Right for You?

A credit card isn't the right solution for every business financing need, obviously, particularly if you're looking for long-term financing. But with responsible management, a business credit card can be a great business tool and can offer some pretty nice perks as well. Here are some questions to ask yourself if you're wondering if a credit card is the right choice for your business:

  • Would low- or 0% introductory financing for several months help get your business up and running?

  • Do you want to separate your personal and business finances?

  • Would you like to manage employee spending?

  • Would you like to earn rewards on your everyday business spending?

  • Would you like to build business credit?

If you answered yes to any of these questions, a business credit card may be worth considering. They can help you do all of these things and more. We'll say it again, though: If you're looking for long-term financing with low interest rates, a credit card is likely not your best option. But for your day-to-day purchases, short-term financing of larger purchases (think 30, 60 or maybe 90 days), tracking day-to-day spending and for generating cash-back or even travel rewards, a business credit card can be invaluable.

Here are some of our favorite business credit cards available today, and the particular financing options and/or rewards they are especially good for.

Blue Business Plus Credit Card from American Express: 0% Introductory APR

The Blue Business Plus Credit Card from American Express is our top pick for new business owners who want financing flexibility and freedom. This card comes with a 15-month 0% introductory APR on purchases and balance transfers (there's a 3% fee on transfers). Keep in mind any remaining balance will revert to the card's variable APR once the introductory period has expired, currently at 13.24%, 17.24% or 21.24%, based on your creditworthiness and other factors as determined at the time of account opening.

On top of offering the longest 0% intro APR period currently available among business credit cards, the Blue Business Plus offers some pretty nice ongoing rewards:

  • 2x rewards on the first $50,000 in purchases annually

  • 1x rewards for every dollar you spend thereafter

The Business Blue is also flexible when it comes to your business spending. You can enjoy increased buying power above your credit limit to make bigger purchases for your business. Just keep in mind the amount you can spend above your credit limit is not unlimited. It adjusts with your use of the card, your payment history, credit record, financial resources and other factors.

Another nice thing about the Business Blue card is that your credit history won't be reported to the personal credit bureaus, so there's no need to worry about your business negatively impacting your personal credit should you run up your balance or fall behind on payments.

Finally, there's no annual fee for the Business Blue card, and foreign transactions incur a fee of 2.7%.

Chase Ink Business Preferred: Travel & Other Rewards

The Chase Ink Business Preferred is our top pick among business credit cards that offer travel rewards and other perks for one simple reason: A current welcome bonus of 80,000 Ultimate Rewards points if you spend $5,000 in the first 3 months of membership.

On top of the one-time bonus, you'll earn some pretty significant rewards for your everyday purchases:

  • 3 points per $1 spent on travel, shipping, online advertising, internet, cable and phone services

  • 1 point for every $1 spent elsewhere

You'll get even more bang for the buck when you redeem your points for travel booked through Chase Ultimate Rewards, where the point value increases to 1.25 each. Like other Chase business cards, your credit history with the Ink Business Preferred won't be reported to the personal credit bureaus unless your account is seriously delinquent.

While there's no charge for additional cards for your employees and no foreign transaction fees, there are some things to keep in mind when comparing the Ink Preferred with other cards:

  • No introductory 0% APR for balance transfers or purchases

  • A variable APR of 18.24% - 23.24%

  • A $95 annual fee

SimplyCash Plus from American Express: Cash Back Rewards

If you like the idea of earning significant cash back on your business purchases, plus the opportunity to finance those purchases at 0% interest for your first 9 months in business, the SimplyCash Plus from American Express may be a great card for you.

To start, SimplyCash is offering a limited introductory offer. You'll earn a $250 statement credit after you spend $5,000 in qualifying purchases on your card within the first 6 months of membership. You'll earn an additional $250 statement credit after you spend an additional $10,000 or more in qualifying purchases on your card within the first year of membership.

Then there's the SimplyCash Plus 0% introductory APR on purchases for the first 9 months after opening the card. Any balances will revert to a variable APR, currently at 14.49%, 19.49% or 21.49%, based on your creditworthiness and other factors as determined at the time of account opening.

Finally, there's the cash back rewards. There are three tiers for rewards. Here's how it works:

5% cash back:

  • At U.S. office supply stores and on wireless telephone services purchased directly from U.S. service providers (up to $50,000 annually).

3% cash back (on the category of your choice from a list of eight, up to $50,000 annually):

  • Airfare purchased directly from airlines

  • Hotel rooms purchased directly from hotels

  • Car rentals purchased from select car rental companies

  • U.S. gas stations

  • U.S. restaurants

  • U.S. purchases for advertising in select media

  • U.S. purchases for shipping

  • U.S. computer hardware, software, and cloud computing purchases made directly from select providers

1% cash back:

  • On all other purchases

There's no annual fee for this card, but there is a 2.7% foreign transaction fee. Keep in mind American Express doesn't report to personal credit bureaus, so high balances or missed payments aren't going to hurt your personal finances.

Chase Ink Business Unlimited Credit Card: Simple Cash Back Rewards

If you want a straightforward card that doesn't require keeping up with how many points you earn or where you earn them, the Chase Ink Business Unlimited Credit Card could be your ideal card.

To start, you'll earn $500 bonus cash back after you spend $3,000 on purchases in the first 3 months from account opening. The Ink Business Unlimited also offers a 0% introductory APR on balance transfers and new purchases for 12 months. That's a nice little chunk of worry-free financing for your first year in business. Just keep in mind that any balance remaining after the introductory period will revert to a 15.49% - 21.49% variable APR, depending on creditworthiness and other factors.

When it comes to cash back, there's no limit to the 1.5% you'll earn on every purchase you make. There's also no fee for additional credit cards for your employees, and there's no annual fee. And, similar to Amex, Chase won't report your business credit history to the personal credit bureaus unless your account is seriously delinquent.

Capital One Spark Classic: Fair or Average Credit

If all the perks of the previous cards sound great, but you know you probably won't qualify because your credit isn't all that great, you may want to consider the Capital One Spark Classic.

Let's take a look at what makes this card stand out:

Unlike a lot of business credit cards for people with less-than-stellar credit, the Capital One Spark Classic has no annual fee and even offers cash back rewards. It's just 1%, but it's cash back on every purchase you make for your business, with no minimum to redeem.

Keep in mind if you're going to carry a balance, the card comes with a variable APR on purchases of 25.24%, which is pretty high compared to other cards on this list. That could jump to 31.15% if you get behind on your payments.

Of course, if you're looking to build your credit and think you won't carry a balance too often, the Spark Classic is a great way to improve your credit history so you can graduate to higher-rewards cards with lower interest rates.

Keep in mind that this card will report your credit history to the personal credit bureaus, which can actually be a good thing, improving your credit scores as long as you properly manage your balances and payments.

The Bottom Line

Whatever card you end up choosing for your business, remember that timely payments and keeping your balances low are important to maintaining a solid credit score. Check out this helpful guide to maintaining and improving your business credit scores for further information.

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Published on: Jul 26, 2019