The right credit card can be a game-changer for new businesses, providing numerous advantages. It offers increased purchasing power, allowing startups to make necessary investments. Additionally, credit cards with introductory 0% APR periods can be beneficial, providing a runway to pay off significant purchases without incurring interest.
For smaller businesses and startups, credit card needs differ from those of larger corporations. Special attributes like expense management tools, welcome bonuses, and ongoing rewards can be especially helpful in providing much-needed support to fledgling companies.
To identify the best credit cards for startups and new businesses, we conducted a comprehensive analysis of various cards offered by different issuers. Our curated list represents the top choices, but it’s essential to consider other credit cards in this category as well. Each startup has unique needs, and exploring various options ensures you find the one that suits your business best.
The Blue Business® Plus Credit Card from American Express:
The Blue Business® Plus Credit Card from American Express offers simple and generous rewards for small business owners without an annual fee. Earn 2 Membership Rewards points per $1 on everyday business purchases up to the first $50,000 spent per year, and 1 point per $1 on all other purchases. The card comes with secondary car rental loss and damage insurance, extended warranty, and purchase protection policies, making it a valuable choice. Additionally, the earned Membership Rewards points can be transferred to airline and hotel partners for even greater value.
Ink Business Cash® Credit Card:
The Ink Business Cash® Credit Card provides generous rewards for small business owners who spend in bonus categories. You can earn 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable, and phone services, 2% cash back on the first $25,000 spent at gas stations and restaurants, and 1% cash back on all other purchases. The card also offers a substantial welcome bonus and various travel and purchase protections. However, it’s essential to be mindful of the spending caps to maximize the benefits.
Capital One Spark 1% Classic:
The Capital One Spark 1% Classic card is designed for new businesses with fair credit. It allows you to qualify for a business credit card even with a credit profile that’s not perfect. The card offers 1% cash back on every purchase and 5% cash back on hotels and rental cars booked through Capital One Travel, making it a suitable choice for those starting out.
U.S. Bank Business Platinum Card:
The U.S. Bank Business Platinum Card is an excellent option for those looking for low intro APR offers on both purchases and balance transfers. It provides a 0% intro APR on purchases and balance transfers for 18 billing cycles, followed by a variable APR. However, keep in mind the balance transfer fee and explore other options after the intro period ends.
Amazon Prime Business American Express Card:
If you have an Amazon Business Prime membership, the Amazon Prime Business American Express Card can offer exceptional value. It provides 5% back in rewards on eligible U.S. purchases at Amazon Business, AWS, Amazon.com, and Whole Foods Market with an eligible Prime membership. Additionally, you can earn 2% at U.S. restaurants, U.S. gas stations, and on wireless telephone services. This card includes a range of benefits, but it’s most valuable for those who frequently spend within the Amazon ecosphere.
Brex 30 Card:
The Brex 30 Card is not your typical corporate card and is suitable for young or international company founders with fair credit. It offers an excellent rewards program, allowing you to earn points on various categories such as rideshare, travel, restaurants, and software. However, it’s essential to note that it requires placing money on deposit with a Brex account.
Wyndham Rewards Earner® Business Card:
For frequent travelers, the Wyndham Rewards Earner® Business Card is an attractive choice. It offers exceptional rewards on gas and Wyndham property purchases, making it ideal for those who spend a lot of time on the road. With an annual fee, you can earn points for free nights at Wyndham properties and benefit from various travel protections.
American Express® Business Gold Card:
Travel rewards enthusiasts will find great value in the American Express® Business Gold Card. With its Membership Rewards points, you can transfer to airline and hotel partners, potentially getting more value compared to cash back. The card also comes with several travel and purchase protections, adding to its appeal for business owners seeking travel rewards.
Capital One Spark Cash Plus:
If you plan to spend significantly and don’t carry a balance, the Capital One Spark Cash Plus Card can offer you simple and generous rewards. Earn 2% cash back on every purchase and 5% cash back on hotels and rental cars booked through Capital One Travel. While it comes with a sizable welcome bonus, consider this card only if you have substantial spending needs.
The American Express Blue Business Cash™ Card:
The American Express Blue Business Cash™ Card is an excellent option for modest spenders looking for a straightforward cash-back card. You can earn 2% cash back on all eligible purchases, up to $50,000 per calendar year, and 1% on all other purchases. With no annual fee, this card also provides valuable extras and extensive expense management tools.
Should you get a business credit card for your startup or new business?
Small business owners often face the dilemma of whether to get a business credit card for their startup or new venture. However, opting for a small business credit card can bring various benefits and advantages. One significant advantage is the ability to separate personal expenses from business expenses, streamlining accounting and tax preparation processes. Many small business credit cards are equipped with advanced expense tracking features, making financial management more efficient.
Short-term financing is another advantage offered by small business credit cards. While long-term loans might have better interest rates, credit cards can be invaluable for smoothing out cash flow fluctuations in a company. For instance, builders often need to purchase supplies and complete projects before receiving payment from customers, and credit cards can bridge this gap by providing initial funds.
In addition to the financial benefits, small business credit cards often come with rewarding programs. Entrepreneurs can earn points, miles, or cashback on their spending, which can be reinvested into the business or used for personal purposes.
In summary, small business credit cards can be a valuable tool for business owners, offering expense separation, short-term financing options, and rewards programs to enhance their financial management and business growth.
Guide to credit cards for startups and new businesses
Small business credit cards function similarly to personal credit cards, allowing users to make purchases for their businesses. Nevertheless, there are crucial distinctions to be mindful of. Unlike personal credit cards, small business credit cards are tailored to offer rewards and benefits that cater specifically to business owners, rather than general consumers. Additionally, these cards provide enhanced reporting and expense-tracking features, facilitating accounting and tax preparation processes for business needs.
One important consideration when obtaining a small business credit card is that most credit card companies will require a personal guarantee for the account. In other words, if your business faces financial challenges and cannot repay its debt, you, as the business owner, will still be held liable for any outstanding amounts on the card. This aspect warrants careful attention and financial planning for potential risks.
How to get a business credit card as a startup
When it comes to obtaining a business credit card, the application process remains consistent for both established businesses and new ones. The key factors for approval typically revolve around the owner’s personal credit history and their assurance of repayment. As long as the applicant’s credit profile aligns with the card’s requirements, the likelihood of approval remains high, even for new businesses.
For businesses that are incorporated, the application can be made using the Employer Identification Number (EIN). This provides a distinct entity for the business and streamlines the process. However, if the business is an unincorporated sole proprietorship, the owner can utilize their Social Security number (SSN) instead for the application.