Choosing the Best Business Credit Card

Like personal credit cards, business credit cards fall into one of two categories: low interest and rewards. Which is best depends on what you plan to use it for.

Cards for financing and working capital:

If you’re looking to use your credit card to finance your business, you should look for a low interest credit card that will allow you to carry a balance month-to-month without bleeding your bank account.

The American Express Plum card offers a lot of flexibility in this area. You get up to 2 months of revolver with 0% interest: when times are tight, if you pay 10% or more of the balance of new activity plus all of the previously deferred amounts, you have until the end of the next billing cycle to pay the remainder without incurring interest or fees. Should you decide that you don’t need that flexibility, you can get a 1.5% discount on your balance when you pay within 10 days.

If you need to borrow more money than a credit card revolver can supply, you should probably consider getting a bank loan rather than using your business credit card as a financing source, since the interest rate is often lower.

Cards for maximizing rewards:

If you don’t carry a balance, you can choose a card that earns rewards on typical business purchases, travel and more. The best card for your enterprise is the one that most closely matches your spending habits, of course. A number of cash back credit cards and gas credit cards have business counterparts, which often give even better rewards rates than personal cards. Among the perennial favorites:

• The AmEx SimplyCash, which gets 5% cash back on wireless services, 3% on gas, and 1% elsewhere. You can also save 3-10% automatically when you use FedEx, Hertz, OfficeMax and others with the OPEN Savings program. Like most AmEx cards, it’s simple, has no annual fee and lets you earn unlimited rewards.
• The Capital One Venture Business, which earns a flat 2% back on all purchases and has a signup bonus of 10k No Hassle Miles, plus an additional 5k if you sign up an employee within 60 days. This is a great international credit card, as it charges no foreign transaction fee.
• The Starwood credit card, which pays out in Starpoints (useful only if you’re a frequent guest). We estimate that it has an effective 2.3% rewards rate, on top of the 10k Starpoint signup bonus, worth ~$2,300.