As a small business owner, choosing the right credit card is important. The problem is that the right credit card for the gift shop next door to you may not be the right credit card for you. Asking which small business credit card is the best is like asking which flavor ice cream is the best; it all depends on your point of view!
Use the free credit card chaser tool on this page to compare business credit cards online!
Generally, the best way for you to choose the best small business credit card for your business is to choose a rewards card that best reflects your business spending. If you spend a lot of time in hotels, then get a hotel rewards credit card, if you fly a lot, then an airline credit card may be the way to go.
Are American Express credit cards right for small businesses?
You have probably seen many commercials for American Express credit cards and, truthfully, American Express has some of the best customer service reps in the credit card industry. However, they may not necessarily be the best choice for small business.
The reason for this is that many of the American Express credit cards don’t include revolving credit. Generally, a small business doesn’t have the capital available to them make big purchases and then pay them off every month.
Of course, there is an exception to every rule and that is with the American Express Simply Cash Business Card. This rewards credit card offers you 1% cash back on all of your spending, 3% cash back on gasoline purchases and 5% cash back on office supplies and wireless services.
The credit score of your business determines what you will pay for your APR, which starts at 12.24% and maxes out at 19.24%. There is also an introductory APR of 0% that lasts six, nine or twelve months depending on how good your credit is.
This credit card does not have an annual fee. However, American Express doesn’t discuss the options for additional cards, whether they are available, if they are if they cost money, and whether or not you can apply a spending limit to additional cards for your employees.
Are there credit cards that are wrong for small businesses?
One thing that you will want to avoid at all costs is a credit card with a high interest rate. Many businesses carry high balances on their credit cards, especially if they are just starting out and using their credit card(s) to make large purchases. With a high interest rate, you will end up paying far more than you should for those purchases.
What’s more, when you carry a high balance on a card with a high interest rate, it is simply difficult to pay off that credit card in a timely manner because of the fees that are tacked on every month.
Choosing a card like the American Express Simply Cash Business card helps to avoid some of that by offering you a certain amount of time with 0% interest. The Chase Ink credit card also has a 0% introductory APR. This APR applies to both purchases and balance transfers, so this might be an option for you if you already have a high interest rate card and want to choose a card that can help lower you payments.
Are there limits to how much interest a credit card company can charge on a business credit card?
The cap on the interest rates for your credit card is stipulated by state rather than by the federal government. What this means is that a credit card company based in Florida may be able to charge higher interest rates than a credit card company based in California may be able to charge.
Usury laws in California, for example, states that credit card companies in their state, as well as banks and other lending institutions, cannot charge an interest rate higher than 5% over the amount established by the Federal Reserve Bank of San Francisco. Conversely, usury laws in Florida vary depending on the type of loan, how much it is, and whether it is for personal or business use.
According to the Federal Reserve, there are some things that you are protected from in terms of your interest rate. For example, your credit card company cannot raise your rate for one year if you have an account in good standing.
The exception here is if there is an introductory APR. An introductory APR can revert to your go to rate once the introductory period has expired. New laws, however, stipulate that an introductory APR must last for at least six months before it can be changed.
tool on this page!
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- Where can I find local credit card companies in my area?