How many business credit cards should you have?

Many small business owners and entrepreneurs can benefit from having at least one business credit card: by using your card responsibly, you can separate personal and business expenses and start building business credit.

Beyond that, the right number of business credit cards to have depends on your company's spending habits. The ideal set of cards should include: business credit card Maximize the benefits of that expenditure without letting it grow so unwieldy that it becomes unmanageable.

Here's how to determine if you should add another business credit card to your collection.

Yes, you can have multiple business credit cards. There is usually no limit to the number of cards you can have, but some issuers may have their own limits.

For example, Capital One limits the total number of credit cards you can have, including personal and business cards, to five. Chase doesn't allow you to qualify for a new card if you've been approved for five credit cards from any issuer within the past 24 months. Most non-Chase business cards are so-called 5/24 ruleBut some do.

usually, Get a business credit card Credit depends on your personal credit, not factors like income or length of time in business, which means your credit history can also affect whether or not you can get multiple business credit cards, especially if you try to open too many cards too quickly.

If you have a card from one of the major business credit card issuers, you may be eligible for additional benefits. Employee credit cardThese are separate physical or virtual cards with their own credit card numbers, but because they utilize the same credit limits as your main card, neither card issuers nor credit bureaus consider them separate credit accounts.

Some card issuers don't limit the number of employee cards you can issue, and even if they do, the number is enough for many small business owners. For example: American Express Business Card Up to 99 employee cards are included free of charge.

It makes sense to issue employee credit cards to employees who frequently make expenditures on behalf of the company. If possible, set up controls to limit the amount each employee spends and monitor employee activity.

A business credit card comes with a separate revolving credit limit that you can use up to, say, $10,000, and by getting additional cards, you can increase the total amount of capital you have ongoing access to from $10,000 to $15,000, $20,000, or even more.

Using multiple credit cards to raise business funds Stack of credit cardsThis may be an option for startups that don't have enough revenue and a proven track record to qualify for options like a business line of credit, but credit cards generally have high interest rates, so it's best to explore other financing options first.

The exception to this is if you are planning a one-time large purchase. In that case, opening a new account: 0% Introductory APR Business Card A card where the issuer doesn't charge interest for a period of time gives you the flexibility to pay it off over time, but if you don't pay off the balance by the end of the introductory period, you'll owe interest.

Having multiple business credit cards allows you to take advantage of rewards programs and perks, including:

• Combine cards to get the best rewards rates. A solid cash-back business card will give you 1.5% or more back on all your spending. But other cards might give you more cash back on Amazon purchases, fuel, or other purchases. Advertising expensesUsing specific cards for specific purchases (especially the ones you make most often) can help drive revenue across your business.

• Get a welcome bonus. Several Business credit cards offer bonuses New cardholders are given bonuses in the form of cash or points when they reach a certain spending amount within a certain period of time, so if you have a big expense coming up, consider a card with generous bonuses you can earn.

Having multiple credit lines Build business credit Over time, using a business credit card and making payments on time will demonstrate to business credit bureaus and potential lenders that you are using funds responsibly.

Opening a business credit card soon after starting your business can help you establish a business credit history. Over time, as your history grows, Business Credit Score.

Having access to more credit than you actually plan to use and being able to go well below your limit can also have a positive effect on your score.

Here's why you should be careful when opening an additional business credit card.

• You may end up paying more interest. Business credit cards generally have higher interest rates than other types of credit cards. Business FinancingThis includes business loans, lines of credit, etc. If you plan on taking out one or more additional business credit cards to obtain long-term financing, consider less expensive options first.

• Your personal credibility may be damaged. opening Business credit cards can affect your personal credit scoreEach application will likely require a hard check on your personal credit report, so avoid opening multiple cards in quick succession to minimize the impact. Keep in mind that poor payment history on business cards can also negatively impact your personal credit.

• There will be more things to manage. Keeping track of multiple business cards can be complicated, especially if you deal with multiple rewards programs and issuers. Many credit card companies offer cards with rewards that complement each other, so choosing a single credit card company is a good idea. You can also schedule automatic payments, as long as you're confident you have enough money in your bank account to cover the amount that will be deducted. Ultimately, you may decide that the hassle outweighs the benefits.

Flat rate cash back business credit card Cards with no annual fee are a great place to start for many business owners, offering flexible funding sources without the need to manage complicated rewards programs.

Then, look for a business credit card that offers rewards based on your business spending patterns, which might include cards that pay higher cash back percentages on certain categories like gas or office supplies. Business Travel Credit Cards Reward loyalty to a particular airline or hotel brand, or Fleet Cards These are cards that can be issued to drivers to help them save fuel. Each card has a purpose.

When considering a new business credit card, ask yourself these questions: