Everything You Need to Know About Business Credit Cards

A business credit card is just like a regular credit card—except it’s for business. Just like you have a credit card that’s in your name, you can have a business credit card that’s in your business’s name. Business cards can be a convenient and flexible way to cover your day-to-day business expenses without getting your business and personal finances mixed up. We’ll cover the topics below in today’s quick-and-simple guide to everything you need to know about business credit cards:

• What Is a Business Card?
  • Business Credit Card vs. Personal Credit Card
• What Is the Best Business Credit Card?
• How to Get a Business Credit Card
• Should I Get a Business Credit Card?
• Finance Business Expenses with a Credit Card

Nearly 70% of small businesses use credit cards monthly. If you have a small business, you may be looking to get a small business credit card. Having a distinct small business credit card is a great way to keep your personal and business expenses separate and keep your accountant happy. 

There are a wide array of business credit cards out there — some offer cash back while others offer travel rewards. Finding the right one for you will depend on your business and what types of spending you most frequently do. Before we talk about the different business credit cards, it’s important to understand what a business credit card is. 

What Is a Business Card?

Business credit cards are a type of credit card. Credit cards are a form of revolving credit: rather than taking out a loan that’s paid off over time, credit cards allow you to build up a balance over a month. However, you’re required to repay that balance at the end of the month, or else you’ll start accruing interest on the unpaid balance. 

• Looking for your own credit card? Check out Mint’s curated selection of highly-rated credit card offers to see what works for you. 

Business owners use business credit cards to purchase things for their business. That could be anything from printer paper to coffee for the office and more. They’re basically just a flexible way to conduct business-related transactions without having to charge things to your personal credit card, spend your own cash, or take out a business loan. 

• Starting a business and need significant funding? It’s probably not the best idea to put it all on a credit card. Read more about small business loans here. 

Business credit cards function very similarly to personal credit cards. They’re both credit cards, after all. However, it’s good to know the key places where they differ, and why you might prefer a business credit card over a personal card for many of your business transactions. 

Business Credit Card vs. Personal Credit Card

The major difference between business and personal credit cards is that you will need a business to apply for a small business credit card. The business information will be included in your credit card application.

Some of the biggest ways that business credit cards differ from personal cards are:

• Higher limits: When you’re running a business, you’re probably spending a lot of money. You might be outfitting an office with chairs and desks, upgrading your employees’ tech, buying food for lunches, and much more. All that means that you’ll have to put more on a business card than you would on your personal credit card (when was the last time you bought yourself 50 sandwiches for lunch?). Business cards have credit limits, just like personal cards, but they are often much higher than personal cards for the reasons mentioned. 

• Business-oriented rewards: Credit cards often have rewards, like cash back and points. However, your business credit card points might be spent on business-related expenses. For example, you might earn points to be spent at business retreat venues, or on office supplies, or gift cards to restaurants that you can use to take clients out for meetings. 
• Expense tools: Some business credit card accounts might offer programs to give you key insights into your spending. For example, it might show you where you’re spending the most money month over month, or what areas you’re coming in below budget. They might also have specialty fraud detection features to ensure that your business credit card isn’t being misused by an employee who has access to the account. 

Approximately 71% of small businesses that use credit cards use a business credit card instead of a personal one. And it’s fairly clear to see why: business credit cards offer useful separation between business and personal finances, and have special features that make spending much easier. 

What Is the Best Business Credit Card?

The best business credit card really depends on your business’s needs, your personal preferences, and your financial situation. The best small business credit card for one business owner might not be the best for another. However, in general, there are several factors that are smart to consider when deciding what card is right for you:

• APR or annual percentage rate is the interest rate that’s on your card. That’s the amount over and above the principle that you borrow that you’ll owe if you carry a balance. So, for example, let’s say you have a 15% APR, you charge $1100 to your card, and make only the $100 minimum payment. You’ll be charged $15 on the remaining $1000: $150 in interest. The lower the APR, the better in some cases. However, some cards with higher APR may have better perks.

• Perks or rewards are another important part of having a credit card. Many of the best business credit cards offer instant cash back on purchases, cash back on certain types of purchases (like 4% at office supply stores), or airline miles, which are essential for businesses that conduct a lot of business that requires travel. Credit card rewards can be a great way to help fund new purchases for your business, or even just a nice way to offset some of the expenses that you charge to your card.
• Terms and conditions are always important to keep your eye on as you shop around for your next business credit card. Some cards charge annual fees, for example, that might offset some of the benefits of a good rewards program or low APR. Other cards might have punishing late fees or other conditions that make them a bad fit for your business. It’s good to read the fine print and check every term that will apply before settling on a card. 

Check out Mint’s list of premium zero APR credit card offers here to see if any fit your needs! 

How to Get a Business Credit Card

Getting a business credit card is mostly just like getting a regular credit card—you’ll apply online, input financial information about you and your business, and the credit card company will run a credit check. Your personal credit score and your business credit score might both be factored into the decision about whether you are eligible for a small business credit card. Credit scores are how lending agencies measure how trustworthy of a borrower you are. The more loans (including credit cards) you’ve responsibly paid back in the past, the better your score is likely to be. 

There are also different business credit cards for different business sizes. Small businesses and startups might qualify for one set, while larger companies may be eligible for cards with bigger lines of credit. The requirements will likely be based on the amount your business brings in monthly, as well as other factors like outstanding loan balances and your credit history. Note also that many business credit cards rely on a personal guarantee, meaning you and the business can be held responsible for collections if you do not repay the balance on your card or fail to make minimum payments. 

One common misconception is that your business needs to have an EIN or be a registered corporation or meet a certain threshold of sales or revenue. The fact is that your business can be a sole proprietorship, have no or limited revenue, and still get a small business credit card. Once you do have a small business credit card, there is also no legal restriction on what you can use it for. You can make personal expenses on your business credit cards, and vice versa — just check with your accountant or bookkeeper on how to account for them.

Should I Get a Business Credit Card?

Business credit cards come with a number of perks that make them worthwhile for many small business owners:

• Higher credit limit than personal cards
• Separation between business finances and personal finances
• A chance to build your business credit 
• Rewards programs that can boost your business in convenient ways
• Convenient method for covering day-to-day business expenses
• Good APR on some options (note that 0% APR offers are only applicable for an introductory period)

Finance Business Expenses with a Credit Card

Whether you’re trying to start a business or branching out an existing one, business credit cards are useful tools. The best small business credit cards for new businesses make conducting small purchases simple and quick for many business owners. With the right card, you can accrue perks and airline miles while also conveniently covering daily costs, all without getting business expenses and personal expenses confused. 

Keeping tabs on all your finances as a business owner can be challenging, especially while simultaneously handling your own personal finances. That’s where Mint can help. The Mint app allows you to see your full financial picture in one, convenient place. Download it today to gain insight into your personal finances so that you can run your business without worrying about staying on top of personal financial obligations. You can also start with tools like our credit card payoff calculator for instant insights.