In 2024, the landscape of business finance has transformed, making the choice of the right company credit card more crucial than ever for savvy entrepreneurs and businesses. Tailored to cater to the unique demands of both large corporations and burgeoning small enterprises, these cards not only offer generous rewards but also ensure elevated spending capabilities tailored to your business's scale and scope. This year, we delve into the finest selection of company credit cards, highlighting their standout benefits – from streamlined expense tracking to enhanced credit histories. Whether your business is a seasoned player or a new entrant in the market, our guide will assist you in uncovering the ideal card that aligns with your business's financial strategy, even if you're operating without an Employer Identification Number (EIN). Step into the world of fiscal empowerment with our top picks for 2024, and propel your business towards financial efficiency and rewarding experiences.
Business credit cards are similar to personal credit cards. Instead of belonging to an individual, the card is attributed to a business. While they are most commonly associated with larger companies, smaller businesses can also apply for business cards. It is not always required, but most credit lenders want your business to have an employer identification number (EIN) as part of the application process. Cards advertised specifically for smaller businesses may waive this requirement.
Surprisingly, it is easier to get a business credit card than a personal one. The process is mostly automated, and lenders do not scrutinize your finances as much with a personal card. Business cards function exactly like personal credit cards. Your business card will accrue credit history and have a separate credit report. Many businesses prefer business cards because it makes tracking business expenses easier. There are several other benefits to company credit cards.
Boosting your Credit
Opening a company account is a smart move, but it does come with a few downsides. The biggest downside is that, as a new account, your business will not have a credit score. Using a company credit card is the quickest way to build up a reputable credit history for your business. Like with personal loans, your eligibility for business loans will be determined by your credit history. As long as you regularly use your company card and do not miss any payments, you will quickly build up a solid credit score.
Separating Business and Personal Accounts
Another benefit of owning a company card is recordkeeping. There are many tax deductions available for businesses. While it is possible to get these discounts with a personal account, the process is more involved. With a company card, you know every expense listed relates to the business. Not only is this helpful for tax purposes, but it creates a separation between your personal and business accounts. Without this separation, your finances take a hit whenever the business does. All businesses have slow periods, but if your accounts are linked, the slow periods are weighted heavily against your personal finances.
Personal credit cards often run reward programs, granting you points whenever you use the card. These points can be exchanged for discounts or other rewards. While these are nice perks for using your credit card, the rewards are significantly greater on company cards. This is because your business card has a much greater line of credit compared to a personal card. You are also likely to use your business card more often than a personal credit card. Travel miles and hotel points are common rewards for company cards. If you are not interested in these, prioritize cards that provide cash back bonuses on each purchase.
Another benefit of company credit cards is customization. If multiple employees will handle the company card, you can set limits on how the card is used. Some company cards even allow you to set multiple spending limits depending on who is currently using the card. Company cards also come with security alerts. You can track how the card is being used and set up automatic alerts whenever an unexpected purchase is made.
If you run a business, security apps often struggle to provide adequate protection. This is because your personal card is used for larger, business-related purchases. These may flag the system initially, but if you keep confirming the charges are legitimate, it sets a dangerous precedent. Larger charges are considered normal, so it takes longer to track fraudulent purchases. With a company card, you set up your spending habits early, which makes it easier for automated systems to track your charges and spot red flags on your account.
What to Look For
Picking out a company card is similar to a personal card. One of the first things to look for is the credit limit. Company cards typically have higher limits compared to personal cards. Limit increases are also more common with business cards. Some companies even provide guaranteed increases if you hold the credit card for a certain period of time.
While security is important for company cards, it is practically guaranteed no matter what card you use. Many credit cards use the same security features. One consideration is whether the card provides an app to track spending and alert you in real time when the card is used.
Another consideration for most businesses is what bonuses are available. This not only includes reward points and other perks, but 0 percent APR periods. Fees for company cards are often higher because of the increased line of credit, so the longer you get 0 percent APR, the better. It is common for creditors to offer around nine months, with some going as far as one year.
American Express Blue Business Card
There are several American Express business cards to choose from, but the Blue Business card offers some of the best initial benefits. It has a smaller line of credit compared to other cards, such as the platinum variant, but there are no annual fees. You also receive a free $250 credit if you spend at least $3,000 in your first three months. All purchases earn 2 percent cash back, up to your first $50,000 each year. After this, you earn 1 percent on your purchases. It also includes 0 percent APR for the first year, with a variable rate of 13.99 to 21.99 percent based on your credit score.
Bank of America Business Advantage Mastercard
Bank of America’s Advantage Mastercard is another company card with no annual fees. It also provides 0 percent APR, but only for the first nine months. Afterwards, the variable APR is 12.49 to 22.49 percent, based on your credit history. If you spend $3,000 in the first 90 days, you receive a $300 statement credit. There is no annual cap on your cashback rewards, and you earn 1.5 percent back on all purchases. One potential downside is you are charged 3 percent whenever you make a foreign transaction fee. If you purchase supplies overseas, you may want to consider a different card.