How to Choose a Small-Business Credit Card

Types of Business Credit Cards

Several types of credit cards are available, and your company’s size and needs will determine which is best. Large companies with millions in revenue use corporate credit cards, which don’t require a specific person to guarantee payment. The corporation is the guarantor.

Charge cards don’t have credit limits. Instead, you must pay them off every month or suffer costly late fees and penalties. Because charge cards have no preset limit, you need good credit to qualify for one. They often have annual fees, but they might also provide member benefits. These credit cards are good for business owners who can pay them off each month, and want the flexibility to use their card for large purchases without spending limits. An article on ValuePenguin.com said this type of card is also a great choice for people who want (or need) to learn good credit habits. After all, it does not let you carry a balance for several months.

For companies that need to carry a balance, a good low-interest business card saves money. These cards often offer promotional periods, such as 0% APR for the first 12 months. Although these cards have preset credit limits, they might be easier to obtain than a bank loan, which gives small businesses more flexibility.

Another option is what Thomas Donaldson at Entrepreneur.com calls “special interest credit cards,” which offer perks for spending in specific categories. Some of these cards, for example, offer reward points for travel-related purchases. Others, like the Chase Ink Plus Business Credit Card, give bonuses when buying office supplies. To determine if such cards are right for your business, review your regular expenses to see if you spend enough in a covered category to maximize your rewards.