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Business credit cards are just like any other credit cards, but they are geared more towards large transactions and bulk buys. If you are a business owner looking for a new card to use, there are several factors you should keep in mind. We know that every business is different, so we can't exactly say what the best business credit card is for you. We can, however, compare the rewards from popular options to find the best overall card for the average business owner. Follow our study and the tips below to determine which card you should choose.
What to Look for in a Business Credit Card
You need to make sure that your card matches your business's needs. Key points to keep in mind:
- Carrying costs: Look into the annual fees and interest rates for all of the cards you want to compare. If one offers more rewards for a significantly higher annual fee, the costs may not be worth the benefits.
- Rewards: Different credit cards offer different rewards programs. If you fly a lot for work, you may want something with a lot of airline options. If you do most of your work in a truck, you may prefer a gas rewards program. Make sure the rewards match your spending habits so you can actually use them when the time comes.
- Number of cards: For the most part, you should be able to get as many credit cards as you need for your employees. Some cards will limit this to a specific number though, so make sure it fits the size of your company.
- Spending limits: Only you will know how much money you have to spend for your business. If your card needs to have a $100,000 limit, verify that it will. If it only needs a $25,000 limit, you'll obviously have more options to choose from. The limit you are given will largely be based on your credit, but some cards will automatically come with high or low limits. Get the one that will accommodate your business.
What Is the Best Business Credit Card?
We do studies like this all the time, where we run average spending numbers against credit card terms to determine which card offers the biggest bang for the buck. In this case though, we have to approach matters a little differently. Rather than using consumer spending statistics to create a baseline for our study, we are going to have to make up some numbers we feel match the expenses of the average business. This may not suit your mom-and-pop store or your multi-billion dollar steel mill, but we're hoping it at least shows which card has more to offer overall.
For this study, we will assume that a business has $100,000 in annual costs, which break down as follows: $10,000 in air travel, $5,000 in hotel fees, $15,000 in fuel, $5,000 in restaurant charges, $20,000 on office supplies, and the remaining $45,000 in insurance, building costs, utilities, etc. This does not include payroll or anything else along those lines. Just general expenses for running a business.
We'll assume that said business puts all air travel, hotel fees, fuel costs, restaurant charges, and office supplies on its credit card, making for a total of $55,000 spent per year. We will also assume that the company pays its balances regularly to avoid the APR. This removes the fees for the card, which will vary from one business to another. All we're focusing on here are the rewards.
We looked at four of the most popular and best rated business rewards cards on the market to complete our assessment: Chase Ink Classic, Capital One Spark Cash, the Business Gold Rewards Card, and CitiBusiness ThankYou. We calculated the points earned for each of them based on our assumptions above, and then we charted the results for you to compare. Some cards use rewards points, and others actually offer cash back. We converted all of these to cash, using $1 for 100 points (the industry standard).
- Bonus: $100
- Employee card: $50
- Everything else: .02 x $55,000 = $1,100
- Total: $1,250
There is a $59 annual fee after the first year with this card.
- Bonus: 15,000/100 = $150
- Jan-Mar office supplies: (3 x ($20,000/4))/100 = $150
- Jul-Sep air and hotel: (3 x ($15,000/4))/100 = $112.50
- Oct-Dec restaurants: (3 x ($5,000/4))/100 = $37.50
- Everything else: (1 x $45,000)/100 = $450
- Total: $900
There is no annual fee for this card.
*Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.
*The content in this article is accurate at the publishing date, and may be subject to changes per the card issuer.