Starting a new small business involves countless decisions, and choosing the right credit card is one of the most crucial. A business credit card can provide essential funding, build credit history, and simplify expense tracking, all vital for a fledgling enterprise. This guide will navigate you through the best options available in 2024, helping you make an informed decision that aligns with your business needs.
Choosing the right card is critical because it impacts your cash flow, creditworthiness, and overall financial management. The goal is to select a card that provides the best rewards, lowest fees, and most suitable features for your specific business requirements.
| Credit Card | Key Features | Why It's Great for New Businesses |
|---|---|---|
| Ink Business Preferred® Credit Card | High rewards on travel and select business categories, strong sign-up bonus, travel insurance, cell phone protection. | Ideal for businesses with significant travel expenses or high spending on advertising, shipping, or internet/cable services. The valuable rewards and travel benefits can offset costs and streamline operations. |
| Ink Business Cash® Credit Card | Excellent cash back rewards on office supplies and gas, introductory 0% APR period, no annual fee. | Perfect for businesses seeking straightforward cash back rewards and a period to finance initial expenses without interest. No annual fee makes it a low-risk option for managing everyday business costs. |
| American Express Blue Business Cash™ Card | 2% cash back on eligible purchases (up to $50,000 per calendar year), expanded buying power, no annual fee. | A strong choice for businesses with diverse spending needs, offering a flat-rate cash back reward on almost everything. The expanded buying power can be helpful for managing fluctuating expenses. |
| Capital One Spark Cash Plus | Unlimited 2% cash back on every purchase, rewards that don't expire, credit line flexibility. | Attractive for businesses seeking simplicity and predictability in their rewards program. The unlimited cash back and flexible credit line offer consistent value and financial control. |
| Capital One Spark Miles Select for Business | 1.5x miles per dollar spent, no annual fee, easy redemption options. | A good option for businesses that want travel rewards without the commitment of a high annual fee. The miles can be redeemed for travel or cash back, providing flexibility. |
| U.S. Bank Business Triple Cash Rewards Card | 3% cash back on gas, office supplies, cell phone service, and restaurants; 1% on everything else, low introductory APR, no annual fee. | Caters to businesses with specific spending patterns, offering high rewards in common business categories. The introductory APR and no annual fee provide financial flexibility and cost savings. |
| Brex Card | Rewards on software, dining, and travel; higher limits for qualifying startups; integrations with accounting software. | Designed specifically for startups, offering features and rewards tailored to their unique needs. The integration with accounting software simplifies financial management, and the higher limits can support growth. |
| Divvy Credit Card | Expense management platform, virtual cards, real-time expense tracking, rewards based on spending tiers. | A comprehensive solution for businesses that need robust expense management tools. The virtual cards and real-time tracking provide control and visibility over spending, while the rewards program offers additional incentives. |
| Ramp Card | Expense management platform, automatic spend tracking, vendor management, cashback rewards. | Similar to Divvy, Ramp focuses on streamlining expense management for businesses. The automatic tracking and vendor management features save time and improve financial control. |
| Chase Ink Business Premier® Credit Card | Unlimited 2.5% cash back on purchases of $5,000 or more; travel and purchase protections; flexible redemption options. | This card is ideal for businesses with significant expenses. The high cash back rate on large purchases, coupled with robust travel and purchase protections, delivers substantial value and peace of mind. |
Detailed Explanations
Ink Business Preferred® Credit Card: This card shines with its generous rewards structure. You earn 3 points per dollar on the first $150,000 spent each account anniversary year on travel and select business categories, including shipping, advertising purchases made with social media sites and search engines, internet, cable and phone services. It also comes with valuable travel insurance and cell phone protection, making it a great choice if your business involves frequent travel or relies heavily on online advertising.
Ink Business Cash® Credit Card: The Ink Business Cash card offers a straightforward cash back approach, ideal for businesses looking for simplicity. You'll get 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable and phone services each account anniversary year, and 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year. Plus, it features an introductory 0% APR period on purchases, giving you time to finance initial expenses without accruing interest.
American Express Blue Business Cash™ Card: This card provides 2% cash back on eligible purchases up to $50,000 per calendar year, then 1%. It's a great option for businesses with a wide range of spending categories, offering a simple and consistent reward on almost every purchase. The card also offers expanded buying power, allowing you to spend beyond your credit limit (with adjustments based on your card usage, payment history, credit record and financial resources known to American Express).
Capital One Spark Cash Plus: The Spark Cash Plus card offers unlimited 2% cash back on every purchase, making it a simple and predictable rewards option. The cash back doesn't expire as long as your account is open and in good standing, and you can redeem it for statement credits or checks. This card offers a straightforward approach to rewards, focusing on simplicity and consistent value.
Capital One Spark Miles Select for Business: This card offers 1.5x miles per dollar spent on all purchases. It’s a good choice for businesses that want travel rewards without paying a high annual fee. The miles can be redeemed for travel purchases or as cash back, offering flexibility in how you use your rewards.
U.S. Bank Business Triple Cash Rewards Card: This card offers a tiered rewards system, providing 3% cash back on gas, office supplies, cell phone service, and restaurant purchases, and 1% cash back on all other eligible purchases. This structure is ideal for businesses with significant spending in these common categories. The card also often comes with a low introductory APR and has no annual fee, making it a cost-effective option for managing business expenses.
Brex Card: The Brex card is specifically designed for startups and offers rewards tailored to their needs. Rewards may include points or cash back on software, dining, and travel purchases, depending on the specific Brex program. Brex also offers integrations with accounting software, simplifying financial management, and can provide higher credit limits to qualifying startups, supporting their growth.
Divvy Credit Card: Divvy is more than just a credit card; it's a comprehensive expense management platform. It offers virtual cards, real-time expense tracking, and rewards based on spending tiers. The platform provides businesses with greater control and visibility over their spending, helping them to manage budgets and track expenses effectively.
Ramp Card: Similar to Divvy, Ramp focuses on streamlining expense management for businesses. It offers automatic spend tracking, vendor management, and cashback rewards. Ramp's platform helps businesses automate their expense reporting, identify cost-saving opportunities, and gain better insights into their financial performance.
Chase Ink Business Premier® Credit Card: This card caters to businesses with substantial expenses. It offers an unlimited 2.5% cash back on purchases of $5,000 or more. Additionally, it provides travel and purchase protections, adding an extra layer of security and peace of mind. The flexible redemption options make it a versatile choice for managing business finances.
Frequently Asked Questions
What is the best credit card for a new small business? The best card depends on your specific business needs. Consider factors like spending categories, travel frequency, and expense management requirements.
How do I choose the right business credit card? Evaluate your business expenses, reward preferences, and any desired features such as 0% APR periods or expense management tools.
What credit score is needed for a business credit card? A good to excellent personal credit score (typically 670 or higher) is usually required to qualify for a business credit card.
Can I use a business credit card for personal expenses? While technically possible, it's generally not recommended. It can complicate accounting and blur the lines between business and personal finances.
How does a business credit card help build business credit? Responsible use of a business credit card, including timely payments, helps establish a positive credit history for your business, making it easier to secure loans and other financing in the future.
What is an EIN and do I need one to apply for a business credit card? An Employer Identification Number (EIN) is a tax ID number used to identify your business to the IRS. While not always required, having an EIN can simplify the application process and may be necessary depending on the card issuer.
Are business credit card rewards taxable? Cash back rewards are generally not taxable, but rewards earned through travel or other perks may be considered taxable income. Consult with a tax professional for specific guidance.
What is the difference between a business credit card and a personal credit card? Business credit cards are designed for business expenses and offer features like employee cards, expense tracking, and higher credit limits. Personal credit cards are for personal use and typically have different rewards and features.
How can I track my business expenses using a credit card? Many business credit cards offer online portals and mobile apps that allow you to track expenses, categorize transactions, and generate reports. Some cards also integrate with accounting software for seamless expense management.
What are the alternatives to business credit cards? Alternatives include business loans, lines of credit, invoice factoring, and crowdfunding. The best option depends on your funding needs and financial situation.
Conclusion
Choosing the right credit card for your new small business is a critical step towards financial stability and growth. Carefully evaluate your business needs, spending habits, and desired features to select a card that provides the most value and supports your long-term success. Remember to use your business credit card responsibly to build credit and manage your finances effectively.