When you launch a new business, you’re probably aware of how a business credit card can help you smooth out your cash flow to help you get your enterprise off the ground. You may also be aware that a business credit card can help you out in other ways — by helping you build your credit score and earn rewards for your business spending.
However, with your other responsibilities, you may not have the time to spend studying the business credit card universe to determine which cards have the most to offer a young business.
Thankfully for those of you who prioritize pursuing your passion over comparing credit card offers, Merchant Maverick exists! Let us separate the winners from the losers and give you the scoop on the business credit cards best suited to entrepreneurs and startup businesses.
| Credit Card | Best For |
|---|---|
| Chase Ink Business Cash | Overall Best Startup Card |
| Amex Blue Business Plus | Long 0% Intro APR |
| Chase Ink Business Preferred | Big Signup Bonus |
| Capital One Spark Miles Select For Business | Travel Rewards |
| Brex Corporate Card | No Personal Guarantee |
| Capital One Spark Classic For Business | Average Credit |
| Wells Fargo Business Secured Credit Card | Secured Card For Bad Credit |
Chase Ink Business Cash: Best Overall Card For Startups
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Chase Ink Business Cash
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Annual Fee: $0
Purchase APR: 15.49% – 21.49%, Variable |
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Due to both its overall combination of features and its 5% cash back earning rate on several common purchase categories for new businesses, we’re picking the Chase Ink Business Cash as the best overall credit card for entrepreneurs and startups.
To start off, the Ink Business Cash offers an introductory 0% APR for 12 months on purchases and balance transfers and a bonus offer of $500 cash back when you spend $3,000 on purchases in the first 3 months. The card also lacks an annual fee, which is remarkable for a business credit card that offers this much value.
Startup businesses stand to reap some great rewards when using Ink Business Cash to pay for building up a young company. The card offers 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable, and phone services each year. No other business card offers such a high level of cash back for the spending necessary to build your office.
You’ll also earn 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants and 1% cash back on everything else. All in all, few cards tailor their reward structures to the needs of startups better than Ink Business Cash. Despite this, the card offers a very competitive variable APR of 15.49% to 21.49%.
You can redeem your cash back for statement credits, travel (via Chase Ultimate Rewards), shopping at amazon.com, and gift cards. The card also includes handy benefits such as an auto rental collision damage waiver, travel and emergency assistance services, roadside dispatch, and purchase protection.
American Express Blue Business Plus: Best For Long 0% Intro APR
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Blue Business Plus Credit Card from American Express
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Annual Fee: $0
Purchase APR: 15.49% – 21.49%, Variable |
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The Blue Business Plus Credit Card from American Express has one distinguishing feature that should be of particular benefit to those starting a business.
The card offers a 15-month intro 0% APR on purchases and balance transfers — the longest such period offered by any business credit card issuer. So while circumstance may force you to carry a balance on your card as your business gets on its feet, you’ll have 15 months before you start having to worry about paying interest.
As for spending rewards, they’ll come in the form of Membership Rewards points. You’ll earn 2X points on your first $50,000 in annual purchases with no category restrictions whatsoever. All purchases beyond this $50K annual double points limit will earn you 1 point per dollar spent.
Just as with some other Amex business cards, the Blue Business Plus lets you spend above your credit limit. There’s also no annual fee. On the downside, there’s no bonus offer, and the card carries a foreign transaction fee of 2.7%.
Chase Ink Business Preferred: Best For Big Signup Bonus
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Chase Ink Business Preferred
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Annual Fee: $95
Purchase APR: 18.24% – 23.24%, Variable |
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Business credit cards don’t typically come with bonus offers as generous as that offered by Chase’s Ink Business Preferred card.
The card offers 80,000 bonus points when you spend $5,000+ on purchases in the first 3 months. Because your points are worth 25% more when you redeem for travel through Chase Ultimate Rewards, these 80,000 points can be worth $1,000 when spent on travel. For entrepreneurs needing to travel for business, this $1,000 bonus can be a godsend.
As for earning points, you can earn 3 points per $1 on the first $150,000 spent annually in combined purchases on the following items:
- Travel
- Shipping purchases
- Internet/cable/phone services
- Advertising purchases made with social media sites and search engines
You’ll earn 1 point per $1 spent on all purchases in these categories after the $150K annual high-earning limit and on all other purchases. The card also carries some great travel benefits, has no foreign transaction fee, and you can transfer your points to various airline and hotel travel reward programs on a 1:1 basis.
Sadly, the card carries a $95 annual fee, no introductory 0% APR, and a higher purchase APR than that offered by Chase’s Ink Business Cash card.
Capital One Spark Miles Select For Business: Best For Travel Rewards
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Spark Miles Select From Capital One
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Annual Fee: $0
Purchase APR: 15.24% – 23.24%, Variable |
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The beauty of Capital One’s Spark Miles Select For Business lies in its simple travel rewards earning scheme: Earn an unlimited 1.5X miles on your every business purchase with no blackouts or seat restrictions and no minimum to redeem. Considering that you can redeem rewards directly for flights, this card can really benefit the startup that incurs a lot of travel expenses.
The Spark Miles Select card has no annual fee, no foreign transaction fee, and carries a 0% intro APR for 9 months on purchases, but not on balance transfers. However, there is no balance transfer fee.
The card’s bonus offer —Â 20,000 miles ($200 for travel) when you spend $3,000+ on purchases in the first 3 months — is more modest than that of many of the other cards featured in this article.
Brex Corporate Card: Best For No Personal Guarantee
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Brex Corporate Card
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Annual Fee: $0
Purchase APR: N/A (this is a charge card) |
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And now for something completely different. The Brex Corporate Card is a unique product — created in 2018 — that aims to disrupt the world of business credit cards. How does it do so?
- The card does not require a personal guarantee. That means that in the event that your business goes under, you won’t be personally liable for the debt on your card and your personal assets will be safe!
- Brex doesn’t even check your personal credit score when you apply for the card. Instead, Brex relies solely on the health and potential of your business when considering your application.
The Brex Corporate Card is a great fit for tech startups with at least some history, but not so much for entrepreneurs just starting out or the mom-and-pop dry cleaning place down the street. Your business will need at least $100,000 in cash assets in order to qualify for the card.
The Brex card offers some truly impressive points-earning rates on common startup expenses as well:
- 7 points per dollar spent on rideshares and taxis
- 4 points per dollar spent on travel booked through Brex Travel
- 3 points per dollar spent on restaurant purchases
- 2 points per dollar spent on software subscriptions
- 1 point per dollar spent on everything else (Brex Exclusive membership not required)
The only drawback is that to earn points at these rates (except for the 1 point per dollar on general spending), you need to make Brex your exclusive corporate card. You won’t be able to use any other cards for company-related purchases.
The Brex card is a charge card, so you won’t be able to carry a balance from month to month. Thankfully, there’s no annual fee.
Capital One Spark Classic For Business: Best For Average Credit
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Spark Classic From Capital One
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Annual Fee: $0
Purchase APR: 25.24%, Variable |
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Entrepreneurs trying to realize their plans while dealing with average credit will find a lot to like about the Capital One Spark Classic For Business credit card.
Being a card for business owners with average personal credit, the Spark Classic For Business doesn’t come with much in the way of bells and whistles. There’s no signup bonus, no intro 0% APR, you’ll get only 1% cash back for your purchases, and the APR is high (currently 25.24% variable).
However, if your credit is less than good and your startup doesn’t fit the profile of a business that would be eligible for the Brex card, the Spark Classic For Business is one of the few ways you can actually fund your business operations. Furthermore, the card has no annual fee, no foreign transaction fees, and there are no transaction fees applied to balance transfers (though the high APR still applies).
While the Spark Classic For Business can be a godsend, try not to carry a large balance from month to month.
Wells Fargo Business Secured Credit Card: Best Secured Card For Bad Credit
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Wells Fargo Business Secured Credit Card
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Annual Fee: $25
Purchase APR: Prime + 11.90% |
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As hard as it is to access startup capital when you’ve got average credit, it’s even worse when you’ve got bad credit. That’s where secured business cards like the Wells Fargo Business Secured Credit Card come in.
With the Wells Fargo Business Secured Credit Card, you make a security deposit of between $500 and $25,000. This becomes your credit limit, as you are essentially borrowing from your own money. Not ideal, but when your credit is bad, entrepreneurial beggars can’t be choosers.
If your credit stinks but your startup business is thriving, check out the Brex card instead. But for entrepreneurs with bad credit just getting out of the gate, the Wells Fargo Business Secured card is a solid option in the secured business card market. You can choose to enroll in either the Cash Back or the Rewards Points program. The first option gets you 1.5% cash back on every dollar you spend while the second option gets you 1,000 bonus points when your company’s spending is $1,000+ in any monthly billing period. Not bad for a secured card!
Unfortunately, there’s a $25 annual fee for each card you get (you can add up to 10 employee cards).
What You Need To Apply For A Business Credit Card
Here’s what you’ll need in order to apply for a business credit card.
- Your business name — Note that your business doesn’t necessarily have to be a corporation or even an LLC. You sole proprietors and freelancers can just give your own name (or another name if you’ve filed for a DBA)
- Your tax identification number — This can be your Employer Identification Number (if your business is a corporation/LLC/partnership) or your Social Security number (if you’re a freelancer/sole proprietor)
- Your business type — Corporation, limited liability partnership, sole proprietorship, etc
- The nature of the business you’re in — Designing apps, running a restaurant, selling hats for dogs on Etsy, etc.
- Your role in the business
- Your business phone number/address
- Time in business
- Number of employees
- Annual business revenue — Brand new businesses can just put “$0” here
- Your estimated monthly business spending
Remember, though you’re applying for a business credit card, your chances of getting approved will depend to a significant degree on your personal credit, and you’ll have to sign a personal guarantee, thus making you responsible for your business debt. (Note that this is not the case for the Brex card)
Final Thoughts
Great business ideas can come from anybody and anywhere. Unfortunately, startup capital is notoriously hard to access for those who were not born into wealth or privilege. Business credit cards may be an imperfect instrument for entrepreneurs trying to stake their claim to the ever-receding American Dream, but if you’re careful, they can help you manage your expenses and set you up for greater success.
Still trying to make sense of the world of credit? Here are some helpful articles for you!
- Doâs and donâts of business credit cards
- Best business credit cards for 2019
- Using personal cards for business
The post The Best Business Credit Cards For Startups And Entrepreneurs appeared first on Merchant Maverick.
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