How to choose a business credit card in 6 steps

Most entrepreneurs can benefit from business credit card — Whether you're just starting out, a growing small business, or an already established company. However, the choice of suitable cards depends not only on their business characteristics, but also on the personal qualifications of the individual.

Follow these steps to choose the business credit card that best suits your needs.

1. Evaluate business card qualifications

That's because most small business credit card issuers base eligibility on an applicant's personal credit history.factors such as annual business income Focus on determining things like available credit limits, not whether or not you'll be approved.

To qualify for most small business cards, you typically need a good personal credit score (usually a FICO score of 690 or higher), but for some small business cards, business credit cards for fair credit (FICO score is 630-689).

If your score is below that threshold, we recommend starting with a safe card. These are often The easiest business credit card to get, because the credit limit is tied to the cash deposit you provide. A secured card can help you build personal credit and give you access to additional business card options in the future.

2. Decide if a business card is right for you

one of the biggest Advantages of corporate credit cards Being able to separate company expenses and personal expenses. However, you can do the same with a consumer-only credit card.

For example, if your business is growing and you need to make large purchases each month, business credit cards tend to have higher credit limits than personal credit cards to support that. Most business cards include employee credit cardThis makes it easier to track personal spending and reduces the need for reimbursements.

Business credit cards, on the other hand, typically include; personal guarantee — meaning if your business can't do that, you'll have to pay off that high balance with your own funds. Card law protection Limitations on interest rate hikes, etc., do not apply to business credit cards. This makes paying your bills on time even more important.

3. Examine your business expenses

Look at your books for the past six months and identify your two or three largest operating costs. This will help you know which type of business credit card is best suited for your spending.

Are you just starting out or find your spending can't be easily categorized into specific buckets? Think about it cashback business credit card We offer a flat rate of reward on all purchases.

4. Look at the “lifestyle” of your business

In addition to looking at where your company is spending its money, you should also consider your business's “lifestyle” to choose the right compensation program.

First, ask yourself a few questions.

• Does my business require frequent long-distance travel? in that case, travel business credit card Being able to redeem your rewards for flights and hotels is probably a good choice.

• Does your job require you to be behind the wheel a lot? If so, a card that offers good perks on your gas bill might be just the ticket. If your business has a large number of vehicles; fuel card It may fit even better.

• Do you often need to entertain customers at your bar or restaurant? If so, a card that offers a higher rate of return on restaurant spending may be the best option for you.

• Does my business have a preferred financial institution? If so, the card issuer should: american bank and tracking If you already use a bank, they may offer higher compensation rates or other relationship bonuses.

• Does My Cash Flow support full payment cards? in that case, business charge card You may have the most spending power when there are no pre-set limits. However, if you need to carry a balance, be aware of the card's ongoing interest rate.

5. Weigh the pros and cons of paying an annual fee

Beyond the interest rate, you'll also need to consider the card's other costs. The biggest one is often the annual fee. And there are some, Corporate credit card with no annual feethose who have it are not automatically disqualified.

Cards with annual fees typically have more perks and higher cashback rates. bigger sign up bonus. For this reason, it may be worth splitting the fee in some cases, especially if you use the card solely for business purposes, as the fee may be deductible.

The key is to do the math. Compare the cost of fees to your business's annual expenses and the rewards rates of the cards you're considering. This is a good way to open up more cards to choose from, or even remove some cards.

6. Consider fringe benefits

If you've narrowed your choices down to just a few business cards, additional perks can jump ahead.

Or, if you want to simplify your bookkeeping, see if the card integrates with your accounting software. Ultimately, these may not be your top priorities when choosing a business credit card, but they can make it easier to make your final decision.