Business credit cards can give you working capital when you need it in a pinch, and they’re a great way for sole proprietors and LLCs to separate their tax-deductible purchases and expenses. The best business credit card will also offer lucrative signup bonuses and rewards, so it pays to do your research before choosing the one that’s right for you.
5 Best Business Credit Cards of 2020
- Ink Business Unlimited℠ Credit Card: Best for common business expenses
- Capital One® Spark® Cash for Business: Best for business cash back
- Ink Business Cash℠ Credit Card: Best for 0% intro APR
- Business Platinum Card® from American Express: Best for business travel
- Discover it® Business Card: Best for no annual fee
Ink Business Unlimited℠ Credit Card — Best for common business expenses
- APR: 0% for the first 12 months on purchases; 14.24%-20.24% after
- Annual Fee: $0
- Primary feature: Unlimited 1.5% cash back on every purchase.
- Introductory Bonus offer: $500 cash back bonus when you spend $3,000 on purchases in the first three months.
Capital One® Spark® Cash for Business — Best for business cash back
- APR: 20.99% variable
- Annual Fee: $0 the first year; $95 afterward
- Primary feature: Unlimited 2% cash back on purchases
- Introductory Bonus offer: $500 cash back bonus when you spend $4,500 on purchases within the first three months.
Ink Business Cash℠ Credit Card — Best for 0% intro APR
- APR: 0% on purchases for the first 12 months; 14.24%-20.24% after
- Annual Fee: $0
- Primary feature: 5% cash back on the first $25,000 spent each account anniversary year at office supply stores and on internet, phone and cable services; 2% cash back on the first $25,000 spent each account anniversary year at gas stations and restaurants; 1% unlimited cash back on all other purchases.
- Introductory Bonus offer: $500 cash back bonus when you spend $3,000 within the first three months.
Business Platinum Card® from American Express — Best for business travel
- APR: No interest on purchases (because you pay in full each month) unless you enroll in the Pay Over Time feature.
- Annual Fee: $595
- Primary feature: 5X Membership Rewards® travel points on flights and hotels prepaid through amextravel.com; 1.5X points on each eligible purchase of $5,000 or more (that’s an extra half point per dollar). Up to 1 million additional points per calendar year; 1X points for everything else.
- Introductory Bonus offer: 75,000 Membership Rewards® points after you spend $15,000 on qualifying purchases within your first 3 months of Card Membership.
Discover it® Business Card — Best for no annual fee
- APR: 0% on purchases for 12 months; 12.99%-20.99% after
- Annual Fee: $0
- Primary feature: Unlimited 1.5% cash back on everything.
- Introductory Bonus offer: An automatic, unlimited, dollar-for-dollar match on all the cash back you earn at the end of your first year.
Compare 5 Best Business Cards of 2020
|Card||0% Purchase APR period||Regular APR||Annual Fee|
|Ink Business Unlimited℠ Credit Card||12 months||14.24-20.24% variable||$0|
|Capital One® Spark® Cash for Business||N/A||20.99% variable||$0 the first year; $95 after that|
|Ink Business Cash℠ Credit Card||12 months||14.24-20.24%||$0|
|The Business Platinum Card® from American Express||N/A||N/A||$595|
|Discover it® Business Card||12 months||12.99-20.99%||$0|
What is a business credit card?
Business credit cards let small business owners tap into to a revolving credit line, which can help with short term cash flow. You use them the same way you use a personal credit card — carry a balance, and you’ll pay interest — but your spending and repayment habits help you to improve your business credit score and track tax-deductible expenses.
Who can apply for a business credit card?
It may surprise you to learn that almost anyone can apply for a business credit card. If you have an incorporated business, or even an Employment Identification Number (EIN), you are eligible — but so is just about anyone else who has business-related activities, even freelancers, investment property owners and people who sell things online.
In other words, sole proprietors can get a business credit card. You don’t have to be a corporation or LLC.
What should you know before applying to a business credit card?
If you have an established small business, you may have two different credit scores that can factor into business credit approval. One is your credit score, which ranges from 300-850. The other is your business credit score. Your business credit score ranges from zero to 100. It is determined by an algorithm that changes according to which of the main three business credit bureaus — Dun & Bradstreet, Equifax or Experian — provide the score.
A credit card company may use both scores to approve your application. You’ll also need to provide your business’s legal name, the industry type, the legal structure, federal tax ID, annual business revenue and monthly spend and total annual income.
The pros and cons of business credit cards
Business credit cards often come with valuable sign up bonuses and rewards, which can help defray business expenses or provide you with free trips and hotel stays when you take a well-deserved vacation. They allow you to establish your business as a separate entity, which can really help at tax time.
One thing to watch out for with business credit cards is running a balance. Those business expenses you charged to the card will wind up being very costly if you are paying a variable APR rate on them.
What is a good APR for a business credit card?
The best business credit cards are below the current average business rate, which was 16.88% in late 2019, according to the Federal Reserve. You will only be eligible for a rate that low if you have excellent credit, though.
The final word
The best business card for your small business is the one that provides exactly what you need to be successful. That may be a strong line of credit, an introductory 0% APR rate on new purchases or cash back rewards that give you a discount on the supplies you use the most. With so many business credit cards available, you should take the time to shop around for the card that’s perfect for you.