Business Credit Cards of February 2023

What is a business credit card?

Traditional business credit cards are meant for usage by a company rather than an individual. Large and small businesses can apply for business credit cards, which can help create a credit profile and improve borrowing arrangements in the future.

Business credit cards can give a variety of advantages. These include cashback or rewards, bonus points, travel rewards, and expenditure management. The key to obtain the most acceptable business card is determining which features are essential to your business expenses and what you value the most: cash rewards, cash back, or credit-building help.

Business credit card vs. personal credit card

Your Social Security Number is linked to you and your personal credit. The Employer Identification Number (EIN) identifies your business credit history. It tells the government about your business. Your EIN will be issued almost immediately after you apply online. For taxes, sole proprietors don't need an EIN, but for building business credit, they do.

Equifax, Experian, and TransUnion track your credit history. You have a profile with each of them. There are also business credit reporting services from Experian and Equifax. Personal credit history is not part of your business profile. There are credit reporting services that only work with businesses. Among them, Dun & Bradstreet is the largest and most famous. If you have over one enterprise, each one can have its own report if it has its own EIN.

At a glance, creditors see your credit score in a single number. FICO determines an individual's credit record. There is no standard scoring or reporting method for businesses. Most of the time, your history of payments, financial resources, debts, and type of business determines your score. Business credit scores have fewer variables than FICO scores, and companies can improve their scores more quickly.

Business credit, however, is less protected by law. Regarding consumer credit, specific laws allow you to dispute anything on your report. Commercial credit has no such laws. If there are problems with your business credit report, they could be much harder to fix. Small business owners can ask the listing agency to explain discrepancies, but they don't have to.

Why do you need a business credit card?

There is no requirement to use a business card for business costs. For specific freelancers, independent contractors, and other sole entrepreneurs, a personal credit card may be a better fit. However, you can use your business card in office supply stores where you can get office supplies, furniture, and more. You may save money on everyday business purchases and earn customized cash rewards. Whatever card you use, maintain professional expenses on one card and personal payments on another. This makes tax filing easy and, depending on your business structure, can protect your personal assets if your company gets into legal difficulties.

How to build business credit with a card?

A business credit card may be one of the most effective instruments for establishing business credit in case you pay it off each month in full, keep the balance low (less than 30% of credit), and make regular, on-time payments.

• Register your company and get an EIN. First, register your business. The process varies by business structure and location. In certain states, sole proprietors don't need to register, but may need a local business license. The IRS offers EINs. IRS requires a business tax ID, but it's not essential to develop business credit.
• Request a DUNS number. DUNS numbers are required for Dun & Bradstreet, one of the three major business credit bureaus. Visit Dun & Bradstreet's website to request a DUNS number. Lenders and other businesses often use this unique nine-digit number to check your credit profile and financial health. A DUNS number is required to apply for a federal grant. You do not need to request a unique identifier from other business credit bureaus, like Experian and Equifax.
• Open a credit card for your business. If you make regular, on-time payments and pay off your credit card balance each month, you can build business credit quickly. You can get a business card without an established business credit profile since business card issuers use your personal credit. On-time payments and low credit utilization can help you build your business credit score. People with poor credit can look into secured business credit cards, which require a deposit and can typically be upgraded to unsecured cards.
• Create trade lines with your suppliers. Suppliers often extend trade credit, allowing you to pay several days or weeks after receiving inventory. A supplier reporting payments to a business credit bureau can boost your business credit score. Any small vendor, such as your water or office supply stores, can set up trade lines. You can list those vendors as trade references on your account if they don't report to a credit bureau.
• Early payment to creditors. Your payment behavior determines your business credit score. On-time payments are good, but early payments are better. Paydex scores, which measure a company's payment history, are only assigned to early payers by Dun & Bradstreet. Your business credit score is also affected by the length of your credit history. Maintain relationships with creditors and use less than 30% of available credit.
• Borrow from lenders who report to credit agencies. You can boost your business credit with small-business loans, but not all lenders report to credit bureaus. Before taking a small business loan, ask the lender if they report. Credit bureaus generally report to banks, but banks have stringent lending criteria and can be hard to qualify for unless you have excellent credit. Most online small-business lenders, including OnDeck, LendingClub, Funding Circle, and Bluevine, report to business credit bureaus, making them more accessible to new businesses and people with poor credit. Other lenders, including SmartBiz, Fundbox, and merchant cash advance companies, do not.
• Stay away from judgments and liens. Judgments, liens, and bankruptcy filings negatively affect your business credit score. Unpaid taxes or business debt can cause a lien, allowing creditors to seize your property. Outstanding debt may cause a court judgment against your business. Negative lines on your business credit report can haunt you. For example, bankruptcy remains in your Experian credit history for ten years; tax liens, judgments, and collections remain for almost seven years.
• Maintain your information with all three credit bureaus. Keep track of your business credit report to ensure it's accurate, just like your personal credit. The three leading business credit bureaus are Dun & Bradstreet, Experian, and Equifax. Verify your business credit score with all three; ensure all trade lines are accounted for, and report any errors, whether it's your address or negative marks on your report.

Choosing the best credit card

Choosing the best credit card is difficult. There are so many options and features to consider. Below is a list comprising the top seven best business credit cards of October 2022, arranged in order to increase annual fees.

1. American Express® Blue Business™ Cash Card is an excellent choice for enterprises seeking a no-annual-fee business card. You can earn a $250 statement credit when you spend $3,000 on your Card in your first three months. You can earn 2% cash back on all eligible purchases of up to $50,000 annually. Your cashback will increase by 1% after that. Cashback is automatically added to your statement when you get it. There is no annual fee.
2. Bank of America Business Advantage Travel Rewards World Mastercard credit card. This credit card is an excellent alternative for business owners looking for a travel card with generous ongoing rewards but no annual fee. When you make at least $3,000 in eligible net purchases within the first 90 days of opening your account, you'll earn 30,000 bonus points that can be transferred for a $300 account credit. With the Bank of America Travel Center (cars, hotels, airlines), you can receive 3 points for every dollar spent. There are no foreign transaction fees. Bank of America Travel Center, gift cards, cash back, or statement credits can be redeemed for statement credits to offset travel and dining expenses. When you have a Bank of America business checking account and qualify for the highest Preferred Rewards for Business tier, you may receive up to 75% more points. There is no annual fee.
3. Ink Business Unlimited® credit card. It is a simple cash-back, no-annual-fee credit card, and no caps or bonus categories to keep track of. Bonus cash back of $750 is available when you spend $7,500 on purchases in the first three months after opening your account. With employee cards, you can earn rewards faster at no extra cost. Set limits on how much each person can spend to have more control. There is no annual fee.
4. American Express The Blue Business Plus Credit Card. For small-business operators who value Membership Rewards points but don't want to pay an annual fee, this American Express business card is a good choice. Your cashback can be deposited into your Bank of America checking or savings account, credited to your card statement, or mailed to you as a check. When you buy office supplies or client dining purchases (including eligible delivery services) for your business, you'll earn 2X Membership Rewards points. For the first $50,000 spent per year, you will receive 2 points per dollar, and for every dollar after that, you will receive 1 point. There is no annual fee.
5. Hilton Honors Business Card from American Express. The card is an excellent hotel credit card, offering great points on everyday purchases and up to two free weekend nights each year if spending restrictions are met. Earn 130,000 Hilton Honors Bonus Points after spending $3,000 on the card in the first three months of Card Membership. Earn Hilton Honors Bonus Points for each dollar spent on your card: 12X at Hilton portfolio hotels and resorts, 6X at US gas stations, and 3X on all other eligible purchases, including US purchases for shipping, wireless telephone services purchased directly from US service providers, flights booked directly with airlines or Amex Travel, car rentals booked directly from select car rental companies, and dining purchases. With this card, you'll receive the complimentary Hilton Honors Gold Status. The annual fee is $95.
6. Ink Business Preferred® credit card. The card has one of the most reasonable sign-up bonuses of any credit card offered anywhere, and it pays out substantial rewards in various categories. When you spend $15,000 on purchases within the first three months of your account opening, you'll earn 100,000 bonus points. Available through Chase Ultimate Rewards, that's $1,000 cash back or $1,250 toward travel. For every $1 spent on travel and select business categories during your account anniversary year, you will receive 3 points. All other purchases make you 1 point. The annual fee is $95.
7. The Business Platinum Card from American Express. Even at $695 per year, this card can be a bargain for business travelers who spend much time on the road or in the air. After spending $15,000 on eligible purchases with your card within the first three months of membership, you'll earn 120,000 Membership Rewards points. When you book flights and prepaid hotels on AmEx, you will earn 5X Membership Rewards points and 1X points on eligible purchases on the site. During the calendar year, you can earn 1.5X points on eligible purchases of $5,000 or more at US construction materials and hardware suppliers, electronic goods retailers, software and cloud providers, and purchases of $5,000 or more anywhere else, up to $2 million. The annual fee is $695.

Applying for a business credit card

The application process for a small company credit card is similar to that of a personal credit card. Often, this entails applying online. You'll supply information about yourself and your company, and a decision will be made almost immediately.

Before you apply, it is a good idea (though not necessarily essential) to have an Employer Identification Number (EIN). If one of your purposes is to build business credit, be sure your company has a D-U-N-S number from Dun & Bradstreet before applying. The applicant for the business credit card is not the only one who must supply information on the application as part of the CDD rule to avoid money laundering and other sorts of fraud. Suppose you have business partners who own over 25% of the company or are beneficial owners (such as a Senior Manager, General Partner, Owner, Chief Executive, President/Chairperson, Treasurer, or Vice President). In that case, they will undoubtedly be required to provide personal information to ensure they are not on a government watch list. (They will not be subjected to a credit check.)