Applying for a small business credit card is a smart thing for any business owner to do. While it may be preferable to buy some things you need with cash, a credit card can help you establish good credit for your business. It can also make it convenient to pay for your purchases online.
When we meet with business owners at Addition Financial, we spend a lot of time talking about credit. Our business accounts and services are designed to help companies manage their finances and build good credit. One of the most common questions we get is this:
What should I look for in the best small business credit cards?
That’s a good question to ask. Here are some of the features and options we think are ideal for small business credit cards.
No or Low Annual Fee
The first thing to consider is whether a small business credit card charges an annual fee or not. Many business cards do charge a fee, and you’ll need to weigh the benefits of the card against the amount of the fee to decide whether it’s right for you.
Of course, there are some cards that do not charge an annual fee or charge only a nominal fee. For example, our Addition Financial small business credit cards have no annual fee and a host of other benefits. The main takeaway here is that you don’t need to pay a fee to get a credit card for your business.
Competitive Interest Rate
The next thing to look at is the interest rate being offered to you by the bank or credit union issuing your card. Business interest rates can vary greatly from card to card and you’ll want to choose a card with the lowest interest rate you can qualify for.
The interest rate of your card will have a direct impact on your debt, especially if you do not plan to pay your account balance in full each month. It may be helpful to crunch the numbers and get an idea of what you’ll be paying in interest based on your expenses in the past year.
Credit Limit
The credit limit you qualify for will depend on whether you apply for a secured or unsecured credit card. A secured credit card is secured by a deposit, usually 100% of the card’s limit.
At Addition Financial, our unsecured business credit cards all come with a maximum limit of $30,000. Not every business will qualify for that limit, but we’re happy to talk about your credit needs and help you choose the best card for your business.
Sign-Up Bonus
Next, check to see if the small business credit card you’re considering offers a sign-up bonus for new customers. Many credit cards offer strong incentives to business owners and it’s important to choose wisely. The best bonuses are those that increase your buying power in some way.
It is very common for sign-up bonuses to be linked to spending. For example, all of our Addition Financial small business credit cards come with a sign-up bonus that works like this:
- You spend $5,000 in the first three months after receiving your card
- You receive 20,000 reward points that you can trade in for rewards and prizes
You should make sure you understand what the requirements are to qualify for the sign-up bonus and what you’ll be getting before you apply for any small business credit card.
Rewards or Points Program
If you’re going to be using your small business credit card regularly, it makes sense to sign up for a card that offers you points or rewards. For example, if you are a frequent traveler, you may want to choose a card that offers you airline mileage to help you keep your travel expenses down.
The most versatile rewards programs are points programs that earn you points you can later redeem for other items. At Addition Financial, our small business credit cards award 1.5 points for each dollar you spend. In other words, if you spend $1,000, you’ll receive 1,500 points that you can use later.
Fraud Protection
The final thing you should look for in any small business credit card is some form of fraud protection. Credit card theft and data breaches are real risks, and if you’re not careful, they can cost your business thousands of dollars.
Addition Financial’s small business credit cards all come with Visa® Zero Liability Fraud Protection. When you use one of our cards, you can be certain that your transactions are protected and you won’t be held liable if someone steals your card information.
Choosing a small business credit card means comparing your options and understanding the benefits of each card before you decide which one is right for your business. Looking at the items we’ve listed here can help you make the right choice.
To learn about Addition Financial’s small business credit card options or apply for a card now, please click here.
Posted on Feb 3, 2019
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