Best Business Credit Cards 2018
- October 10, 2016
- Posted by: Andrew Rombach
- Category: Credit Cards
The market for business credit cards has become extremely competitive over the last few years. In the immediate aftermath of the financial crisis, banks and businesses seemed to recede into credit purgatory where there was little appetite for lending or borrowing. Both have emerged from the crisis stronger and their resurgence has led to more demand for credit and a deluge of new business credit card options.
For growing businesses, credit cards have become an essential financial management tool and the issuers have been raising the bar on their business credit card features, benefits, and rewards as they compete in the ever-expanding business credit card market. It’s a great time for businesses looking to better manage their growth to utilize a business credit card.
How Businesses Benefit from a Business Card
Many people would have a difficult time managing their finances without credit cards, and businesses that need to cover brief shortfalls and manage their cash flow are no different. It’s important for small businesses to establish credit so they can have access to the financing needed to expand. When used effectively, a business credit card not only becomes an essential cash management tool, but it helps the business establish itself as a legitimate member of the business community. Here are some additional reasons why a business credit card is essential for small business owners:
Helps keep personal and business finances separate
If you really want to annoy the IRS or your accountant, just try presenting them with your business records that also have a lot of your personal expenses mixed in. It's one of the quickest routes to an audit and can only complicate your life.
Flexibility, control and convenience
In today’s digital world it’s nearly impossible not to use the Internet to make at least some purchases, so you need a credit card. You never know when an advantageous purchase opportunity might pop up requiring short-term access to financing. Having a business credit card will ensure your business makes purchases efficiently, and will enable the business to better control expenses, especially with employees.
Cash flow management
Making purchases with a business credit card enables the business to keep cash flow working throughout the billing cycle. Payments can be timed to customer receipts. And, because credit card accounts provide daily transaction records and monthly spending breakdowns, it’s much easier to manage and control cash flow.
They can be very rewarding
Most small business credit cards have cash back and travel rewards programs that can truly reduce the outlay for supplies, equipment, and travel. Reward points are typically higher on business related purchases such as supplies and travel, so they can be used right away to reduce costs.
Give your business some credit
When you do need to go to the bank for extended financing, it will look at both your personal credit history and your business credit history. A business credit card is the quickest way to build a credit history for your business.
What to Look for In a Business Credit Card
Today, businesses of all sizes have many choices in the universe of business credit cards – from the small and fledgling business trying to establish credit to medium and large companies looking to maximize their rewards. While there are many similarities among business credit cards, a business should consider the key factors that will most impact their cash flow and their capacity to manage credit.
Annual Percentage Rate and Account Balances
Generally, the annual percentage rate (APR) on business credit cards tends to be higher than with personal credit cards, making them less attractive for carrying monthly balances. Although the best use of a business credit card is as a cash alternative, spending no more than what is budgeted each month, some businesses may anticipate making larger capital expenditures that could require several months of cash flow to cover.
If a business anticipates carrying a balance at anytime, it should only consider business credit cards with the lowest possible APR for which it can qualify. It is important to note that, although new regulations prevent credit card issuers from raising the APR on personal credit cards before they are 60-days delinquent, that doesn’t apply to business credit cards. If a business has trouble managing its credit card payments, issuers can bump up the APR almost immediately. It can become very costly to carry a balance under those circumstances.
Business credit cards that offer a rewards program tend to have higher APRs. Considering that the average rewards rate among these business credit cards is about 2%, businesses that carry a balance for even a few months of the year will see any advantage provided by the rewards erased by the higher APR. It is recommended that businesses hwo anticipate the possibility of carrying a balance choose a card with the lowest possible APR over a card with a rewards program.
Conversely, businesses with a strong cash flow and the capacity to pay their balance in full each month could benefit from a business credit card with a good rewards program. Their APR is likely to be higher, but it shouldn’t matter if they never incur the interest charges.
With business credit cards, there is almost no getting around fees. Most cards, especially those with rewards program charge an annual fee and they can range as high as $100 per year or more for some of the premium cards. Higher annual fees should be weighed against the value the business expects to receive from rewards. There are exceptions, however, and the size of the fee is sometimes dictated by the APR offered or the number of other benefits offered. Low-fee or no-fee cards may be harder to qualify for from a credit standpoint or may have a lower rewards rate. Other fees have to be considered as well, including late or returned payment fees.
Most businesses have multiple employees authorized to make purchases. This is when having a business credit card can really pay off. The better business cards not only offer additional cards for employees, they also enable the business to dictate the spending levels on multiples cards for ultimate control. Most business credit card issuers will offer additional cards at no additional cost, but only up to a certain number of users. Credit card fees can quickly eat into the value of having employee credit cards, so make it a point to inquire about it up front. The value of having employee credit cards can also be diminished if there is no way to manage the account and track spending, so be sure to ask about online account management tools as well.
Frankly, many businesses choose their business credit card based almost exclusively on the rewards program – and with good reason. Some rewards programs can be very beneficial, especially if they are more directly aligned with the type of spending the company does. There is also a big difference between programs that pay cash back and those that award points, and businesses will benefit differently by having either one depending on their activities. Here are the main spending categories to consider when choosing a rewards program:
Planes, Trains, Automobiles and Hotels
Businesses that require their employees to travel frequently should look closely at travel rewards business cards. Programs focused primarily on travel tend to offer the highest rewards for air travel and hotels, and are the best option for extracting the most value from those rewards. Many travel rewards cards also offer additional travel benefits, such as airport lounge access, complimentary baggage fees, free companion tickets and other perks that can add a lot of value for frequent travelers. For businesses with just one or two people who only travel periodically, they should consider the other spending categories of the business, such as office supplies and gas.
Office Supplies, Utilities and Gas
Many of the rewards programs emphasize business-related spending categories, such as office supplies, cable and phone services. Some also include dining and gas as main spending categories. Businesses that have a large, local sales team that wine and dine prospects and customers in the area could use those rewards to offset their entertainment expenses. Businesses that have larger expenditures in any of these categories would benefit from these rewards programs over travel rewards programs. The cash back programs may be preferable to programs that award travel points because they offer more flexibility in how the rewards can be redeemed. Cash back is usually paid as statement credits which can be used for any purpose.
*All APRs listed below are current as of the date of this posting and are subject to change at any time depending on the card issuer and market fluctuation.
Compare the Top Business Credit Cards for 2018
Chase Ink Plus® Business Credit Card
APR: 15.49% - 19.49%
Rewards: 5 points/$ spent on office supplies/utilities, 2 points/$ spent at gas stations and hotels, 1 point/$ spent on all other purchases
Bonus Rewards: 60,000 points for spending $5,000 within first 3 months
Fees: $95 annual fee, $5 or 5% on balance transfers, no foreign transaction fee, maximum $39 late payment fee
The Ink Plus@ Business Credit Card is often found at or near the top of all business credit card lists. Its outstanding feature is its rewards program, which awards 5 points per $1 spent, the equivalent of 5% cash back, for all purchases at office supply stores, cellular phone services, landline phone services and cable TV services. It also awards 2 points per dollar for spending on gas and hotels.
For all other purchases 1 point per dollar spent is awarded. Awards can be earned on up to $50,000 of spending in combined purchases each year in the 5% and 2% spending categories. There is no spending cap for 1% rewards. If you hit the spending limits using the 5% and 2% categories the program would yield $3,500 in rewards each year.
Points may be transferred based on a 1:1 value to any one of the program’s partners including Marriott Rewards, Virgin Atlantic Flying Club, United Mileage Plus, Ritz Carlton Rewards and Southwest Airlines Rapid Rewards among others. The points can also be combined with other Chase accounts held by the business, including the owners and their spouses.
The card starts you off big with a whopping 60,000 point bonus which can be earned after spending $5,000 on eligible purchases within the first three months of establishing the account. That has an estimated value of about $750 when redeemed through Chase Ultimate Rewards®.
The $95 annual fee is on the high end, but with a heavy emphasis on spending in the 5% categories, it can be easily offset. There are no foreign transaction fees and additional employee cards are free.
The Ink Plus® Business Credit Card is ideal for businesses that spend a lot of money on office supplies and telecommunications, and would like to earn big rewards to be used towards travel.
Chase Ink Cash® Business Credit Card
APR: 13.49% - 19.49% (0% for first 12 months)
Rewards: 5% cash back on office supplies/utilities, 2% cash back on gas station and restaurant purchases, 1% cash back on all other purchases
Bonus Rewards: $300 bonus credit for spending $3,000 in first 3 months
Fees: No annual fee, $5 or 5% on balance transfers, 3% on foreign transactions, maximum $39 late payment fee
The Ink Cash® Business Credit Card offers the same cash equivalents of 5% on office supplies, cell phone and landline services, and Internet and cable services as the Ink Plus®. It also awards 2% on gas and restaurants as well as 1% on all other purchases. However, the awards on the 5% and 2% categories are capped at $25,000 of spending each year. There is no limit on the 1% awards. Hitting the spending caps in the 5% and 2% categories equates to $1,750 in rewards each year.
Although the sign up bonus is modest -- $300 for the first $3,000 spent – the Ink Cash® card does offer a 0% introductory rate on purchases and balance transfers for 12 months, which is rare for business credit cards. At 13.49%, the low end of the APR range is among the lowest available for a quality business rewards credit card.
As with the Ink Plus® card, the Ink Cash® card offers additional employee cards at no additional cost along with access to the online card management systems for setting spending limits and tracking expenses.
The Ink Plus® is an ideal card for businesses that spend less than $2,500 a month in the 5% and 2% categories and are more concerned with keeping costs down.
SimplyCash® Plus Business Card from American Express
APR: 12.49% - 19.49% (0% for first 9 months)
Rewards: 5% cash back on office supplies/utilities, 3% cash back on select niche categories, 1% cash back on all other purchases
Bonus Rewards: $250 after spending $5,000 within first 6 months
Fees: No annual fee, 2.7% on foreign transactions, $38 late payment fee
The SimplyCash® Plus Business Credit Card from American Express is another no annual fee card with a robust rewards program. It might have the edge over the Ink Plus® due to the fact that, in addition to 5% cash back on office supplies and wireless telephone services, it pays 3% cash back on a category of the cardholder’s choice.
The categories of choice include airfare, hotels, gas, restaurants, computer hardware, software and cloud computing services. It also includes advertising and shipping which can be significant for many companies that spend heavily in these areas. The cash back is paid on up to $50,000 of spending. All other purchases earn 1% cash back.
What makes this card especially rewarding is the no annual fee; and it pays a sign-up bonus of $250 after spending $5,000 or more within the first 6 months of card membership.
The card comes with a number of added benefits, including purchase protection, baggage insurance, car rental insurance, travel accident insurance and roadside assistance. Businesses will benefit most from having access to American Express OPEN, with its discounts at select merchants and providers such as FedEx. Combining the 3% cash back in the shipping category with the 5% OPEN discount at FedEx can net a business 8% in total savings. OPEN includes one of the better account management systems for setting spending limits on authorized users, managing employee spending and tracking expenses.
The SimplyCash® card is a great choice for businesses that appreciate having more choice in their rewards categories. High tech companies and businesses that do a lot of shipping and advertising would benefit most from the SimplyCash® card.
Capital One® Spark® Cash for Business Credit Card
Rewards: 2% cash back on all purchases
Bonus Rewards: $500 credit for spending $4,500 in first 3 months
Fees: $59 annual fee (first year free), $10 or 3% on cash advances, no foreign transaction fee, $39 late payment fee
For businesses that would prefer not to have to manage a rewards program based on different spending categories, Capital One® Spark® Cash is a good middle-of-the-road card that pays 2% on all purchases with no spending limit. This could pay off better for businesses that spend well more than $50,000 a year on all expenses.
There is no 0% introductory period for the Spark® Cash card, but you can earn a sign up bonus of $500 for spending $4,500 within the first three month. Additional employee cards are free, but Capital One does not offer an account management system for setting spending limits or managing employee expenses.
The Spark® Cash card is not the most advantageous for business travel, though it does include travel and emergency service assistance. Additional benefits include collision damage waiver coverage for car rentals purchased with the card. There is no foreign transaction fee.
The Spark® Cash card is not nearly as flashy as some other business credit cards, but for businesses that want a no fuss, above-average cash back credit card, it can be a great choice. For businesses that would prefer not to pay the $59 annual fee (starting in the second year), Capital One offers a very similar no annual fee card, Spark® Cash Select, which pays 1.5% cash back on all purchases. However, if your business spends more than $20,000 a year, it might be better off paying the annual fee on the Spark® Cash card. For businesses with average credit, the Spark® Cash Classic card may be their only option, and it still pays 1% cash back on all purchases.
Capital One® Spark® Miles for Business Credit Card
Rewards: 2 miles/$ spent on all purchases
Bonus Rewards: 50,000 bonus miles for spending $4,500 in first 3 months
Fees: $59 annual fee, $10 or 3% on cash advances, no foreign transaction fee, $39 late payment fee
For travel-minded businesses the Capital One® Spark® Miles card would be a good choice, offering 2 miles for every dollar spent with no spending limit. The miles are equivalent to 1 cent each, which is the industry standard, and they can be used to book travel through Capital One’s travel site (operated by Orbitz). Spark® Miles redemptions receive preferred booking during peak travel periods and can also be applied as a travel statement credit. The only downside is miles cannot be transferred to other loyalty programs.
The sign-up bonus is 50,000 miles for the first $4,500 spent within three months after the account is activated. The annual fee of $59 is waived in the first year, so a business would have to consider how much they spend on the card thereafter to determine if it is a good value.
All of the other features, benefits and terms of the Spark® Miles card are the same as the Spark® Cash card. For a travel rewards card, businesses may be disappointed with the lack of any travel perks such as priority boarding and lounge passes.
For businesses that appreciate a straightforward travel rewards card without a lot of frill, the Spark® Miles card can pour on the miles. Capital One also offers the Spark® Miles Select card for businesses that spend less money and would prefer no annual fee.
Bank of America® Cash Rewards for Business MasterCard®
APR: 11.49% - 21.49% (0% for first 9 months)
Rewards: 3% cash back on gas station and office supply purchases, 2% cash back at restaurants, 1% cash back on all other purchases
Bonus Rewards: $200 credit for spending $500 in first 60 days
Fees: No annual fee, $10 or 4% on balance transfers, $49 late payment fee
By most measures, the Bank of America® Cash Rewards for Business MasterCard® would rate as an upper tier rewards card for businesses. The card pays 3% cash back on gas and office supply store purchases, 2% on restaurant purchases, and 1% on everything else. But, what makes it stand out is its high annual spending cap of $250,000 in combined purchases. For businesses with very high office supply or fuel expenses, that can be more beneficial than cards with higher cash back rewards but lower spending caps. Outside of that, the rewards would be considered about average.
This card has the advantage of no annual fee, which helps to boost the value of its cash back rewards. For new cardholders, it offers a 0% introductory rate on purchases for 9 billing cycles and a $200 statement credit for making just $500 in purchases within the first 60 days of opening the account.
For account management, additional employee cards are free and can come with preset spending limits. The card includes an online services dashboard where you can track expenses, print financial reports and download your transactions to QuickBooks. Additional card benefits include purchase protection, and rental collision coverage.
The Bank of America® Cash Rewards for Business MasterCard® is a good all-around business rewards credit card, but is ideally suited for businesses with big gas or office supply budgets.
U.S. Bank Business Edge™ Cash Rewards World Elite™ MasterCard
APR: 12.24% - 18.24% (0% for first 9 months)
Rewards: 3% cash back on cell, gas, office supplies purchases, 1% cash back on all other purchases
Bonus Rewards: 25% annual cash back bonus
Fees: No annual fee, $5 or 3% on balance transfers, 2% on foreign transactions, $39 late payment fee
The U.S. Bank Business Edge™ Cash Rewards World Elite™ MasterCard is another high rewards business credit card that emphasizes select categories. For businesses with big budgets for office supplies, gas or cell phone services, the card can pay off handsomely with 3% cash back, especially since there is no spending cap. As a sweetener, the card pays an additional 25% anniversary bonus on the cash back earned throughout the previous year. For every $1,000 of cash back earned, that means an extra $250 credited to your account.
This card also offers a 0% introductory period of 9 months for purchases along with a sign-up bonus of $150 for spending $500 within 90 days of opening the account. With no annual fee, the rewards can pay off more quickly than cards that have one. Additional employee cards are free and the rewards earned on employee spending are pooled with the business’ account.
This card offers additional benefits such as MasterAssist Travel Assistance Services as well as upgrades and special deals to luxury hotels and resorts. Businesses can manage their credit card account using online budgeting tools along with ScoreBoard to track and monitor expenses.
The U.S. Bank Business Edge™ Cash Rewards World Elite™ MasterCard is the ideal business credit card for businesses that spend a lot of money on office supplies and gas. Businesses will appreciate its straightforward program for earning and redeeming rewards; and, for businesses that periodically carry a balance, the card’s APR is considered to be among the lowest available.
CitiBusiness®/AAdvantage® Platinum Select® World MasterCard
Rewards: 2 miles/$ spent on business category and American Airline purchases, 1 mile/$ spent on all regular purchases
Bonus Rewards: 30,000 bonus miles for spending $1,000 in first 3 months
Fees: $5 or 3% on balance transfers
The CitiBusiness® / AAdvantage® Platinum Select® World MasterCard® can pile on the airline miles quickly, which is great if your business flies primarily with American Airlines or US Airways. If not, it would be best to pass on this card. But, as an airlines rewards card, it is one of the best around. Cardholders receive 2 AAdvantage miles for every $1 spent on American Airlines, US Airways and certain business categories, including office supplies, car rentals and telecommunications services. One mile is earned for every $1 spent on all other purchases. In addition, a 5% bonus is awarded on all miles earned during the year.
Miles can be redeemed for American and US Airways flights and qualify for reduced mileage redemption of 7,500 miles on select flights. The dollar value of an AAdvantage mile works out to be between 1.35 and 2.7% in cash back on airline bookings.
There are a number of airline travel perks cardmembers can enjoy, including one free checked bag on domestic flights for the traveler and up to four traveling companions, priority boarding and a 25% discount on in-flight purchases.
The annual fee of $95 is waived in the first year, and cards for additional employees do not charge a fee. Miles earned by employees are credited to the main account. New cardmembers can take advantage of a sign-up bonus that awards 30,000 miles for spending at least $1,000 within the first three months of opening an account. There is no introductory APR.
Unfortunately, this card does not come with any type of account management system. Businesses do receive a quarterly statement that includes card transactions and miles earned from all sources, which is fairly standard in the industry.
Between the 7,500 mile redemption discount and the 5% annual bonus, the CitiBusiness® / AAdvantage® Platinum Select® World MasterCard® is very rewarding for businesses that take more than a few American or US Airways flights each year. Beyond that, the business-related benefits are almost non-existent. Businesses that tend to use multiple airlines for their travel may want to consider the Capital One® Spark® Miles for Business card.