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5 Credit Card Options for New Businesses
December 19, 2017
# credit card options for new businesses

5 Credit Card Options for New Businesses

Of the 553 small business owners that TD Bank surveyed in April 2017, nearly half reported that they use a business credit card. This should come as no surprise, since a business credit card can be a valuable tool that helps business owners smooth out short-term cash flow shortfalls. Also, qualifying for a business credit card is not nearly as difficult as qualifying for a traditional business loan or line of credit.

Of course, there are downsides to business credit cards, but if you use it responsibly, it’s hard to argue against it. In addition to improving cash flow regularity, it will also help you build a strong business credit history.

So, what are some of the best credit card options for new businesses? As with any financial decision, it depends on your business’s circumstances, but here are five cards to consider if you’re starting a business, or have recently opened.

Capital One Spark Classic for Business

As the name implies, this card is a solid, no-frills option for business owners with average credit. The card benefits include:

  • No annual fees
  • Free employee cards
  • Year-end expense summaries
  • 1 percent cashback on purchases

The biggest drawback with this card is its high APR (23.99 percent variable), but if you plan to pay your balance off in full each month, then this is a great option to start building a business credit history. Once you’ve established history, you’ll improve your credit score, potentially giving you access to other credit cards.

Ink Business Cash Credit Card

This business credit card from Chase provides some very attractive signup benefits. The ongoing advantages, though, are mostly geared towards businesses that spend a lot on office supplies. The highlights of the Ink Business Cash include:

  • Signup bonus of $300 cashback if you spend $3000 in the first three months of opening the account
  • No interest on purchases and transfers for the first 12 months
  • 5 percent cashback on office supplies and telecom services, capped at $25,000 annually

If your business doesn’t spend much in the five percent category, you’re probably better off with a different card. However, if you’re just starting out and need to get your office up and running, there may be no better option in terms of business credit cards than this one.

If the Ink Business Cash Credit Card sounds attractive, but your business has larger capital needs, you might consider the Ink Plus Business Credit Card. It’s like the Ink Business Card, except that the dollar amounts are upgraded. Be wary though; this also means the credit requirements will be stricter.

SimplyCash Plus Business Credit Card

Essentially, SimplyCash Plus Card is American Express’s version of Chase’s Ink card, except that it provides some more flexibility. Here are the benefits:

  • $200 in statement credit for spending $5000 in the first six months of opening
  • Another $200 for spending another $10,000 within the first year of opening
  • No annual fee or APR for first 9 months
  • 5 percent cash back on telecom purchases and 3 percent back on a category of your choice for the first $50,000 in annual purchases
  • 1 percent back on other purchases

In comparison to Chase’s Ink card, the SimplyCash card’s introductory bonuses are not as attractive. Still, there’s no question that, depending on your spending habits, you could save more with the SimplyCash card.

BBVA Compass Business Secured Credit Card

If for some reason you have bad credit, this secured credit card from BBVA is a solid option. It’s important to note that secured cards work a little differently than unsecured options. For instance, with this card, you put a deposit into a Secured Credit Card Savings Account, and you’re allowed to borrow up to 90 percent of that deposit.

This card is fairly bare bones as it’s meant for business owners who need help rebuilding credit, but here are a few highlights:

  • Earn points for qualified purchases, and double or triple points for purchases within the categories of your choice (office expenses, travel, etc.)
  • Manage business expenses with free online tools
  • Free employee cards

If you’re trying to rebuild credit, the biggest drawback on this card is the annual fee. It’s free for the first year, but after that the annual fee bumps up to $40.

Conclusion

It bears repeating that your choice of business credit card relies on a wide variety of factors. Although, if you’re a new business and you need help financing startup costs, you’ll generally want to look for a card with a no APR introductory period.

In comparison, if you’re trying to save as much money as possible, and will have no problem paying off the balance each month, choose a card with the best rewards in your biggest spending categories. Just be sure that your suppliers report your purchases to the credit bureaus so you build a solid business credit history.

Fora Financial

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

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Fora Financial is a working capital provider to small business owners nationwide. In addition, the Fora Financial team provides educational information to the small business community through their blog, which covers topics such as business financing, marketing, technology, and much more. If you’d like to see a topic covered on the Fora Financial blog, or want to submit a guest post, please email us at [email protected].
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