Establishing business credit is essential if you want your business to succeed and grow. There are a lot of important objectives, including financing options and equipment upgrades, that are easier to achieve when you have an excellent business credit score. Getting a business rewards credit card can help you build your credit score while rewarding you for your business spending.
Here at Addition Financial, we believe in supporting local businesses and giving them the tools they need to make business banking easy. One of the ways we do that is by providing a business credit card that offers generous reward points for every dollar you spend. Here is our guide to business rewards cards and nine key benefits to look for in a business rewards credit card.
How does business credit work?
Just as personal credit can be used to help you qualify for a mortgage or car loan, business credit helps companies of all sizes buy what they need and qualify for business financing, including property loans, business lines of credit and equipment financing.
Business credit is determined by your company’s financial strength and history. When you make on-time payments and handle your financial commitments responsibly, your credit score will increase and it will become easy for you to obtain financing from a variety of sources.
We should note here that business credit scores fall in a range between 0 and 100, except those issued by the FICO Small Business Scoring Service, which range from 0 to 300. Scores are calculated based on your payment history, number of employees and the amount of debt you have.
9 benefits to prioritize in a business rewards credit card
There are plenty of business rewards credit cards available, each one offering different benefits. Here are nine benefits that we think are the most helpful in a business card.
#1: No annual fee
Some business credit cards charge a hefty annual fee. These fees may offset the advantage of a low interest rate and add to your expenses overall. The good news is that there are cards, including Addition Financial’s Visa® Business Rewards Credit Card, that have no annual fee.
If you’re comparing a business card with an annual fee to one without a fee, we suggest doing some calculations to compare total costs.
#2: Fraud protection
Fraud is a risk any time you get a credit card, and the best business rewards cards come with fraud protection to protect cardholders. Thanks to the Fair Credit Billing Act, consumers (including businesses) may only be held liable for $50 of fraudulent credit card charges.
Many business credit cards offer additional fraud protection. The Addition Financial business rewards card includes Zero Liability fraud protection from Visa.
#3: No balance transfer fee
Balance transfers can be advantageous when you get a new rewards credit card because you can take advantage of points on the balance you transfer. The downside is that some credit cards charge a balance transfer fee
Choosing a rewards card that has no balance transfer fee means that you’ll be able to take full advantage of the card’s rewards without taking on additional debt and fees.
#4: Generous rewards and bonuses
The most obvious benefit of choosing a business rewards credit card is the membership rewards. Some offer points that can be traded in for an array of products and services, while others offer cash rewards. Ideally, you should choose a card that offers rewards in your biggest spending categories–or in every category!
Some business credit card regards include one point for every dollar you spend and extra points for travel, gas and other popular categories. Our Visa® Business Rewards Credit Card offers 1.5 points for every eligible purchase. It also offers a 20,000 point bonus if you spend $5,000 in the first three months after your account opening.
#5: Employee cards
As a small business owner, you may have multiple employees who are empowered to spend your company money on things like supplies, travel or entertaining prospective clients. That being the case, you may want to prioritize finding a card that will allow you to provide employees with cards when necessary.
Getting business credit cards for your employees can make it easier for them to do their jobs and help you to attract new clients and customers.
#6: High credit limit
One of the biggest potential benefits of getting a business rewards card is that in many cases, business cards have limits that are significantly higher than those on personal credit cards.
Higher limits make it possible to buy expensive items, including things like office furniture and airline tickets. (We would, of course, recommend not overspending on a card; but it can be useful to buy on credit in months when your cash flow is light.)
#7: Low interest rate
The interest rate on any business rewards credit card should be a priority, since a low interest rate can potentially save you thousands of dollars every year. Since many rewards cards offer a low introductory APR, you should make sure to read the fine print to learn what will happen to your interest rate after the introductory period.
It’s worth noting that some introductory APRs have rules attached, meaning they may or may not apply to balance transfers. We suggest crunching the numbers to be sure you understand the details before you choose a card.
#8: Purchase protections
If you plan to use your business credit card to make major purchases, then it may make sense to look for a card that offers extended warranties and other forms of purchase protection to give yourself as much peace of mind as possible.
Not every rewards card offers extended warranties, so you may need to shop around and read a lot of fine print before you find a card that has the features you want.
#9: Mobile banking features
Most business owners are accustomed to accessing mobile features for their credit union or bank accounts, but ideally, your rewards credit card should give you the option to review your statement and make payments on your phone or tablet.
With our Addition Financial Business Rewards Credit Card, you can access your account information online, on your mobile device or via telephone, giving you the most flexibility to manage your credit card and take advantage of your rewards.
What factors should you consider when choosing a business rewards credit card?
As you begin your search for a business rewards credit card, you’ll need to prioritize the features and benefits that are most useful to you. Here are some questions that can help you evaluate your business credit solutions and make the right choice for your company:
- What will my credit card spending look like? You can’t predict everything, but you should take the time to consider how and when you will use your credit card, particularly if you want to maximize your rewards.
- Do multiple employees need access to business credit cards? The chances are good that at least one other person in your company will need a charge card to use when they’re entertaining clients or traveling.
- How much will you pay in interest? There are a lot of ways a credit card company can structure interest, so you’ll need to think about interest rates and how they will impact your business. Most business credit cards have variable rates, so you’ll need to pay attention to the index and margin as you evaluate your options.
- What type of rewards are available? Rewards may come as points or cash back, and each has its advantages and disadvantages. Ultimately, you want to be able to use your rewards, so be sure to choose a reward structure that will allow you to do so.
- How much will you pay in fees? As we noted above, interest rates aren’t the only expense associated with a business rewards credit card. Make sure to check to see if there is an annual fee (or any other fees) associated with each card you’re comparing.
- What are the features and benefits I value most? We gave you a list of nine benefits and features, but only you can determine which features are most important to you. You may be willing to pay a higher interest rate for a more generous reward structure, for example.
By prioritizing your personal preferences and needs, you can compare multiple credit card offers and choose the business rewards credit card that is best suited to your needs and will allow you to capitalize on rewards.
Get the business rewards credit card you need
Getting a business rewards credit card can provide your business with spending power while helping you earn rewards that can benefit you down the line. The nine benefits we’ve listed here can help you get the rewards card that you need to help your business thrive.
Do you need a business rewards credit card with no annual fee or balance transfer fee and generous points rewards? Addition Financial is here to help! Click here to learn more about our business rewards card and begin the application process today.
Posted on Sep 18, 2023
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