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Business Credit Cards - Compare & Apply

By Joe Taylor Jr.

One in ten American businesses uses credit cards for startup capital, according to government statistics. Meanwhile, private studies indicate that some companies rely on business credit cards to cover up to half their monthly operating expenses. Whether your own company is starting up or growing up, business credit cards can give you the capital and the infrastructure to handle your next big financial challenge. Along the way, you can even earn some cash back or other rewards for yourself or for your team.

Features of business credit cards

While entrepreneurs often view business credit cards as a way to bootstrap their ideas, more experienced company owners understand how the right banking tools can smooth out cash flow. Business credit cards offer a few additional features that company leaders find compelling:

  • Reward programs and good-behavior discounts. Frequent flier miles and cash rebates can cover the cost of last minute client visits or team retreats. Some zero percent credit cards offer extra incentives for paying your balance early.
  • Free employee purchasing cards. Streamline your accounts payable process by issuing individual cards to qualified team members. Cut down on paper checks, while earning extra rewards.
  • Automated expense reporting. Some business credit cards offer mobile phone applications that enable staffers to complete expense reports in real time for purchases they made minutes ago.
  • Purchase protection and warranty extension. Many business credit cards will cover unexpected repair costs for computers and office equipment for a year after a warranty expires. Some cards even protect you from loss, theft or damage.

Best of all, most business credit cards offer access to live customer service and concierge team members who can help with emergency travel needs and stolen card replacements on the fly. The best credit card reward programs include corporate perks like airport lounge access and premium rental car reservations. If you conduct business overseas, you can even find credit cards with no foreign transaction fee.

Securing business credit cards with personal guarantees

Not every business owner will qualify for a new credit card on the strength of their company's credit score. Businesses with less than three years of corporate credit history and companies with few trade references may have to rely on the personal credit of owners and directors.

If your company fits this description, banks may ask you to provide a personal guarantee against the company's line of credit. Basically, if the company fails to pay its bills, you're on the hook for the total amount of the balance, plus penalties. Collection activities for business accounts can be fierce, especially since strict state laws don't apply. Speak with a professional financial advisor, a SCORE volunteer business counselor or your accountant before you take the plunge.

What to watch out for with business credit cards

As instruments of professional trade, business credit cards don't carry the same consumer protections as your personal accounts. For instance, a bank can change the terms and conditions on your company's gas rebate credit card with no advance notice. Similar changes to a personal credit card require at least written letter mailed 45 days before a credit limit or interest rate adjustment. In addition:

  • Rewards can evaporate if you miss a payment. Banks can seize your points, miles and cash rebates if you fail to meet the terms of your commercial borrowing agreement. In some cases, making a payment just one day late can cost you all your card's rewards.
  • Keep a close eye on statements and reports. Security consultants warn that half of business credit card fraud cases involve internal theft -- employees using authorized cards to purchase goods and services for their own use. Most internal thieves start with small purchases, so look for business credit cards with real-time alerts and online reporting tools that your staff can't alter.
  • "Professional" cards fall under business credit card regulations. Many banks now market business credit cards to doctors, lawyers and other professionals that blur the line between commercial and consumer accounts. Most consumer protection laws don't apply to these accounts, so they require more careful monitoring.

Whether you're starting your first business or expanding an existing company, choosing the right credit card can save you tremendous amounts of time and money. Use the resources on our site to see if there's a business credit card that fits your needs.

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