Business Credit or Charge Cards
When evaluating business credit or charge cards, carefully review all the different account offerings available.
Some important considerations:
Are you looking for a business credit card (credit limit, can spread out payments) or a charge card (no preset spending limit, typically pay in full each month)? Note: Some charge cards do allow a pay over time option if you’re eligible.
Look for credit or charge cards with low to no monthly fees. Don’t pay hefty fees for cards or benefits you don’t really need or use. Some fee-based cards do offer the first year free if you want to explore those benefits but keep in mind those annual fees will automatically renew if the card isn’t canceled before the renewal date. For those businesses just getting started, unless there are specific benefits that you NEED from a fee-based card, focus on the cards with no monthly fee. There are plenty of suitable business credit cards out there!
Look for credit or charge cards that align with your business needs and offer the most bang for your business. For instance, cash back rewards, travel rewards if you travel often for business, etc.
If you need more than a single primary card (ex: additional cards for employees), make sure the card offers that benefit and find out what the monthly fee will be, if any, for each additional card.
Inquire on how monthly billing statements will be handled. Most business credit or charge cards will provide a single, consolidated statement to the primary cardholder at the end of each month or billing period. The consolidated statement should break out and itemize each cardholder and the respective transactions incurred on the respective card. Some credit card companies may offer the option for individual statements per cardholder but this is more typical of corporate cards rather than small business cards.
Does the credit or charge card offer any sign up bonuses that you can take advantage of? Weigh your options carefully to maximize the card benefits for your business.
Keep in mind that business credit or charge cards are to be used for legitimate business purchases only. Do not get into the habit of using your business credit or charge card for personal expenses. Most cardholder agreements specifically state the cards are to be used for business expenses and purchases only. Besides breaching the cardholder agreement, you also risk piercing the corporate veil so don’t do it!