In these times of economic stress, it can be challenging for new companies to obtain credit cards. Many financial institutions are now very particular with loans and this includes credit cards. But the news isn’t all bad. There are a few reputable banks offering business credit cards with comparable rates.
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One obstacle a new company will obviously encounter is a limited credit history. Your business checking account will help, as will paying your utilities on time. But you still need something more substantial before most credit card companies will approve your application.
To increase your odds of receiving a credit card for your company, you can try applying for cards that are a little easier to obtain, like secured business credit cards or small business credit cards, like STAPLES or Office Max. If you purchase office supplies for your company, this can be a wise choice.
Secured credit cards can help your company because they report to TransUnion, Equifax, and Experian and all three of these credit bureaus monitor businesses. The credit card payments you make are recorded and placed in your history. Over time, your company can begin to build a decent credit history and offers from unsecured credit card companies will start arriving in the mail.
What are some of the best business credit cards for new companies?
The best business credit cards for new companies are all issued by Chase or American Express.
Depending on your company’s needs, the options are capable of meeting or exceeding average expectations. They are listed below:
- Ink Cash Business Card from Chase –This is a good credit card to research for new companies because it offers up to $250 cash back when you spend $5000. Considering you have up to three months to utilize this offer, this is a pretty good deal. This card also offers up to 5% cash back when you spend your first $25,000 on office supplies and other purchases.
- Ink Classic Business Card from Chase – This credit card has similar features as the Cash business card with a few exceptions. This card offers points on the dollar for purchases as opposed to a specific percentage and the rewards never expire.
- Ink Bold with Ultimate Rewards Business Card from Chase – With this credit card, you can receive 50,000 bonus points if you make $5000 in purchases within 90 days. The points never expire and the number you can earn is limitless.
- True Earnings Business Card from Costco and American Express – This credit card is the most comparable to the Ink Cash? from Chase. The rewards are numerous and include 4% for annual gasoline purchases of up to $7,000 (1% thereafter), 2% on travel or restaurants, and 1% for all other purchases. The credit card annual fee is waived if you make your Costco annual membership payment with using this card.
- SimplyCash Business Card from American Express OPEN – For the first 12 months, this credit card offers 0% APR or Annual Percentage Rate on all purchases. Your supplies, like office materials and wireless devices can grant you up to 5% cash back.
- The Plum Card from American Express OPEN – This credit card offers a 1.5% discount off all of your purchases, no matter what type. To qualify, you must pay off your credit card debt in full every month. Additionally, the payment must be received no later than 10 days after the statement date.
What are some of the worst credit business credit cards?
As your company grows and the credit history lengthens, you can start looking at other credit card options that may be more beneficial. During your research, you should be aware of the credit cards that are rated lowest.
The Visa Black Card rates among the top worst credit cards for businesses. Not only does this credit card carry a hefty annual fee of $495, it also has a 14.99 % APR with minimal benefits, only 1% cash back is awarded for all purchases.
The Wells Fargo Business Platinum Card is also not suited for smart business owners. The interest rate alone can put most people off since it can range between 9.24% and 18.24%. There are no rewards available.
The First PREMIER Bank Card is another credit card to stay far away from. This credit card is very tricky to manage because it is partially secured. You must provide a security deposit of $95 and the APR can soar to 49.9%. There is a $75 annual fee for the first year and it increases to a whopping $120 every year after.
Can I apply for more than one business credit card?
You can apply for more than one business credit card, but it may not be wise to do so. A new company needs time to establish a strong credit history; at least five years is standard. While you are building your credit history, you can add new lines of credit, but they should have very low credit limits; you should also pay the balance in full each month. This will keep your score positive.
Starting a new company is never easy and can come with all types of unforeseen pitfalls. If credit cards are what you need to finance your start-up you need to use them very carefully.
Many new and well-established companies have gone into credit card debt and were unable to escape the impact.
Be respectful of your business credit card and remember to keep spending under control. It is never a good idea to take on more credit than you can handle. Even if you are offered a huge line of credit, you are responsible for managing your finances to ensure that you fulfill your obligations.
- American Express SimplyCash Business Card
- What is the best small business credit card?
- TrueEarnings® Business Card from Costco and American Express OPEN
- American Express Corporate Card
- Chase “Ink” Small Business Credit Card is First Visa/Mastercard Charge Card
- American Express Executive Business Card
- Where can I find local credit card companies in my area?