Which Business Credit Card Should I Get?

By Randi Gollin | American Express^® Freelance Contributor
5 Min Read | April 26, 2021

Summary

Do I Need a Business Credit Card or a Corporate Card?

If your business isn’t a corporation, business credit cards are typically the only option. This is because corporate cards are only available to S-corporations, C-corporations, and some LLCs. And to get one usually requires the company meet a revenue minimum, an expected spending threshold, and a minimum number of employee credit cards.

Business credit cards, on the other hand, are available to small to medium sized companies – including sole proprietors with an LLC and an Employer Identification Number (EIN) – as well as freelancers and independent workers fueling the gig economy.

How Do I Want to Earn and Redeem Business Rewards?

Like personal credit cards, business rewards credit cards can be broken down into two general rewards categories: points and cash back. Both points and cash back rewards are generally earned by making eligible purchases on the card, and each can help businesses earn rewards for the purchases they’re already making. However, points typically build up over time and can be redeemed in a variety of ways – such as travel expenses like hotel stays and airfare or online purchases at eligible retailers – whereas cash back is typically redeemed as a statement credit. For more on how cash back works, read “How Cash Back Business Credit Cards Work".

Will Employees Be Authorized Users?

Many business credit card issuers let businesses have a certain number of employee cards for free, but that’s not always the case. Some cards, for example, let you add up to 99 employees for a flat yearly fee of $50. It’s important to consider how many employees will need a business credit card and what that will cost the business, if anything.

Similarly, question whether employee spending should be capped. If so, look for a business credit card that lets account owners place spending limits on employee cards.

Is an Annual Fee for a Business Credit Card Worth It?

Business credit cards with higher fees tend to offer the most lucrative rewards, so they’re oftentimes worth the annual outlay, typically $95-$595. However, not all businesses need the perks offered by some high-end credit cards, and no annual fee business credit cards can be an effective way to earn rewards without an added cost. For example, a no annual fee card might offer 2% cash back for every dollar spent on the first $50,000 in purchases every year, with cash back automatically applied to your monthly statement – that’s $1,000 back that can be reinvested into the business.

The bottom line? Do the math to ensure the annual fee makes sense for your business needs.

Does My Business Require Frequent Travel?

Professions that travel often might include consultants, travel nurses, sales representatives, flight attendants, travel writers, construction managers, and remote workers. Whatever the industry, if travel is a major recurring expense, it may be wise to consider a business travel rewards credit card that offers additional points for airfare and hotel purchases, in addition to other travel incentives like airport lounge access and trip delay insurance. And once enough points accrue, they can be redeemed for airfare or hotel stays for you and your employees. If your business requires international travel, consider a card that offers no foreign transaction fees.

Does My Business Have Significant Restaurant Expenditures?

If it’s common to entertain clients at restaurants or hold business lunches and dinners, consider a business credit card that offers higher rewards for dining purchases. Some cards might offer a specific dining bonus spending category, while others automatically apply bonus points to the two highest spending categories each month, including dining. This means you may be able to dine frequently in one month and spend big on office supplies the next, while still maxing out rewards.

Is Internet Advertising a Significant Business Expense?

Both small and large businesses that use online advertising platforms can benefit from business credit cards that reward spending in this category. Depending on the card, businesses may be able to receive up to 4 points for each dollar spent on online advertising, plus television and radio advertising purchased in the U.S. directly from media providers. Other cards offer 2% cash back on the first $50,000 in purchases for business expenses, including advertising, downshifting to 1% after the first year.

Does My Business Regularly Purchase Office Supplies?

Office supplies, like paper, toner, and sticky notes, can cost companies about $200 per employee annually. With that benchmark in mind, note that some cards offer up to 2 reward points on all business purchases, including office supplies, on up to $50,000 a year, while others might offer up to 4 points on the first $25,000 in yearly purchases.