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What you need to know about business credit cards and how to pick one

June 11, 2018 | Community
What you need to know about business credit cards and how to pick one, CDC Small Business

The following is a guest post on business credit cards from Credit Card Insider, a consumer-education company that focuses on providing sensible information on credit cards and how to build your credit.

Choosing the right business credit card is no easy task. Between credit card fees, rewards, and benefits, it’s easy to feel overwhelmed. This guide will help educate small business owners like yourself on what to look out for when picking a business credit card.

What are business credit cards and what are their advantages?

Business credit cards are designed to assist in funding company expenses while providing services, commercial rewards and benefits. They provide numerous advantages including:

  • Help in the separation of business and personal finances
  • Greater credit limits than personal cards
  • Presenting a trustworthy, professional image for your business
  • Business rewards such as cash back, points and large signup bonuses
  • Business benefits such as shipping and travel protection, and extended warranties
  • Easier management of the cash flow of a business since business credit cards can enable 20 to 30 days to pay business costs without accruing interest
  • Better controlled spending and budgeting among employees through employee-issued cards

How to use your business credit card responsibly

Business credit cards are most beneficial if they’re used responsibly. Misusing business credit cards can leave you with expensive debt and can negatively affect your credit score.

Also, your business will be able to secure loans easier and in larger amounts through responsible and informed credit-card use. When using a business card, keep these tips in mind:

  • Do: Always pay your bills on time and in full
  • Do: Keep your debt low in relation to your credit limits. The lower your utilization, the better. The fact is, 30 percent is better than 50 percent, and 20 percent is better than 30 percent. For example, consumers with FICO credit scores of 780 or more have an average utilization percentage of 7 percent.
  • Don’t: Apply for large amounts of credit in a short period of time. For example, financial companies that issue loans may perceive you as a greater risk if you apply for several new credit cards in a year
  • Don’t: Spend more on a credit card than your business can afford to pay in full when the bill is due

What should you look for in a business credit card?

We recommend researching the business credit card that best fits your business’ goals. The attributes of an excellent business credit card vary from business to business.

The right business credit card is one that brings the most value to your business. Say your employees travel often by air. A card that offers points-per-dollar rewards on flights and airport lounge benefits could bring value to your business.

Consider these questions as you search for a business credit card:

  • How significant is the signup bonus? A business is likely to spend more than an individual. Therefore, business credit card signup bonuses should correlate to this increased expenditure. Do your research on potential business credit cards and contrast and compare their signup bonuses.
  • How are the card’s rewards for my business costs? A great business credit card offers points or cash back on a business’ regular purchases. Compare card rewards to find out which will offer your business the most value. Credit card rewards are generally offered in points, cash back or miles. Make sure the rewards align with your business’ needs and goals.
  • How is the card’s value in relation to its annual fee? If you are choosing a business card with an annual fee, ensure the rewards and benefits are worth the cost you are undertaking. For example, the American Express Business Platinum Card offers significantly better benefits and higher rewards than competing business credit cards. However, it has a large $450 dollar annual fee. Take the time to consider if the card’s value outweighs any fees for your business.
  • What are the card’s benefits? As previously mentioned, different cards have different suites of benefits. Benefits include features such as purchase protections, extended warranties and insurances. Make note of the different types of benefits offered by different cards, then check what benefits align best with your business aims.
  • How is the card company’s customer support? Do online research on different card providers’ customer-service support. Better customer support will save you time and avoid potential frustration.

The key takeaway

When it comes to choosing the right business credit card, there is no one size fits all option. Settling on the right one depends on your business type and aims.

While researching potential cards, keep some simple tips and tricks in mind. Understand the business credit basics and terms, do your research on cards on the market, and compare their fees, rewards and benefits. Following these steps will help you choose the right card that complements your business.


CDC Small Business Finance offers several loan options for business owners who want to grow their operations and are planning for their long-term needs.

Tell our loan experts about your business, and they’ll work to match you with a financing plan that best suits you. Let’s talk! Reach us at loaninfo@cdcloans.com or (619) 243-8667.


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