Question: Which credit card is ideal for small businesses? I charge a lot since I run a boutique clothes business, but I’m not convinced I’m getting the best value for my money. Large purchases should allow me to profit personally or have my company benefit, but I’m not sure which card will make it possible.
Answer: There is no one-size-fits-all solution when it comes to the finest small company credit card, just as with personal credit cards. The greatest is the one that gives you the most return on the things your company now spends the most money on.
For instance, you may desire a card with restaurant points if you spend a lot of money winning and feeding customers. However, according to Matt Schulz, a credit card specialist at LendingTree, most entrepreneurs don’t want to spend a lot of time thinking about credit card rewards; instead, they simply want a fantastic return with the least amount of work.
The two cards below are “really good simple options” that he recommends since they provide cash-back benefits in all categories.
Chase’s Ink Business Unlimited® Credit Card offers 1.5% cash back on every purchase you make for your business, no annual fee, and $750 cash back when you spend $6,000 within the first three months of opening your account.
Capital One Spark Cash Plus offers unlimited 2% cash back on everything, 5% back on hotels and rental cars booked through Capital One Travel, and a $1,200 cash bonus once you spend $30,000 in the first three months.
The following recommendations are made by Ted Rossman, senior industry analyst at CreditCards.com, who believes that a boutique clothes company would profit more from cash back than travel rewards:
- The American Express Blue Business CashTM Card offers 15,000 membership reward points if you spend $3,000 on eligible purchases during the first three months of card membership, in addition to 2% cash back on eligible purchases up to $50,000 per calendar year, after which 1% cash back is earned. Benefits and offers from American Express are subject to terms. Find out more at americanexpress.om.
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Greg Karp, a credit card expert at Nerdwallet, advises choosing a flat-rate card that offers you the same benefits regardless of what you purchase if your spending is varied and doesn’t easily fall into typical bonus-rewards areas.
“Generally speaking, business cards offer better sign-up bonuses than personal cards, and the most lucrative cards will probably have an annual fee that can be written off as a business expense,” notes Karp.
Having said that, if a certain shop accounts for the majority of your company’s expenditure, you may want to investigate whether they provide credit cards.
According to Schulz, “if you spend a lot of money on one specific kind of purchase, like office supplies, think about getting a card that offers extra rewards for those things.” Of course, you may look at cards that provide travel points or miles in instead of cash back.
There are many alternatives available for your company, and if you consider your spending habits and your ideal credit card, you may make a significant difference in your company’s financial performance, according to Schulz.
Karp advises looking at the business capabilities a credit card provides, such as the capability to log receipts or quickly download transactions into accounting software, if you’re having trouble deciding which one is ideal for you.
