When picking a business credit card, of course, you want the “best” one. But what does “best” mean? And there really one best credit card that everyone should get? Here are 5 tips to pick the best business credit card for you.
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- 11 immediate steps you must take when getting a new credit card
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In This Post
Is there a best business credit card?
Businesses are like snowflakes, no two are alike. Even if you are in the same industry as another company, you most likely have different vendors, you certainly spend your money differently, and have different expectations for your credit card rewards.
1. What categories do you spend the most?
Like personal rewards credit cards, most rewards business credit cards offer bonus categories that will give you extra miles or points for spending at certain stores.
For example, if you spend heavily wining and dining clients, you’ll want a business credit card that offers bonus points for dining. Similarly, if you pay for a lot of hotels and flights, then a bonus for travel spend should be high on your list.
The best way to figure this out is to speak with your business’ accounting department to find out where the bulk of your money is being spent. If you’re a small business, your CPA or bookkeeper should be able to provide this information.
2. What perks are important to you?
Beyond the credit card rewards, some cards offer additional perks to justify their annual fee. Because the credit card world is so competitive, these benefits are the bank’s way of keeping you as a customer.
If you travel a lot, having complimentary lounge access is a godsend. Same goes for automatically upgraded loyalty status with hotels or free checked bags and priority boarding with the airlines. Or having primary auto insurance coverage on rental cars can be a huge cost saving.
The tough thing about it is, unless you are really into credit cards like I am, you may not know what potential benefits you’re missing out on. You can arrange for a call with us here to discuss options or keep the perks in mind if you are comparing your credit card options.
3. Do you need “employee” cards?
One of the benefits of business credit cards is the option to add employee cards. With employee cards, you can restrict the types of businesses the cards work at (SIC codes), you can set individual credit limits, and you’ll receive an itemized bill for each person’s credit card activity.
For example, for one client, we set an employee’s credit card limit to $50 so that the employee could not charge anything, but was still able to enjoy the perks of lounge access while traveling.
4. Weigh the annual fees vs. benefits
Many consumers and businesses are hesitant to pay an annual fee for a credit card. I totally get it. I don’t like spending money I don’t need to either!
However, you need to compare the value of the benefits against the annual fee. In the business world, this is known as ROI – return on investment.
For example, one card may have no annual fee, but the benefits are pretty basic. Now compare that against a card that has an annual fee, but that premium card includes status upgrades, bonus points for the stores you spend the most, and airport lounge access. I know which one I would pick. Do you?
5. Consider the alternatives
A common approach may be to get the co-branded card of the airline or hotel that are your favorites. I even recommend that strategy for beginners in my 5 simple steps to start travel hacking.
But that isn’t always the best approach.
If you prefer to pick the lowest price option or find hotels that are closest to your meeting/destination, sticking with one preferred brand may cause you to pay more than you need to or stay further away than you’d like.
For some businesses, using a 2% cash back card for the guaranteed payback and the flexibility of cash vs. airline miles or hotel points can make a lot of sense.
The Bald Thoughts
In my opinion, there is no perfect card for every business. Instead, with a little bit of research, there is a perfect card for your business! Knowing where you spend, which benefits are most important to you, and what your goals are will help you find the right card for you.
If you need help with this analysis, we’d love to help. Click here to book a free 30-minute telephone consultation.
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I’m looking for a business card that’s not Amex that offers multiple points or miles per dollar on groceries. I spend about 100k per year, so it really adds up. I don’t want to use a personal card because that level of credit usage would hurt my credit. I want points or miles rather than cash back because $2,000 a year will buy me some hotel nights, but very little in premium cabin flights. Any ideas?
Unfortunately, most business credit cards aren’t going to have grocery stores as a bonus category because that’s not a traditional place that businesses spend money. I think your best bet would be cards like the Chase Ink (5x) or Bank of America Business Advantage (3x) that offer bonuses for office supply stores, then purchase gift cards for your local supermarkets there. Not all grocery stores will offer gift cards at Staples and Office Depot, but I have seen some for my local stores. Please write back and let me know how it goes!
I just started my LLC last year and have two DBA’s under our family LLC company. We are therefore divided on where money is spent. The LLC is a family travel/adventure blog business (in its infancy), Legal Health Matters is my legal nurse consulting business and Denise’s Dog Dish is a dog health and wellness blog (the most senior of the 3 making a bit of money in product). We started with a business card through the business’ bank account. It was easy and had cash back for spending a minimum which we knew would happen within 2 weeks of opening the card. Now, I need to take your tips and figure out rewards.
Congrats on your businesses, Denise! Just so you’re aware, you can actually have separate cards under the names of each of the DBAs. This will help with your branding and help keep the expenses for each business separate so you can more easily track the profitability of each concept.
Let me know if you need any help with rewards.
Terrific article, Lee. That lounge perk is not to be overlooked. We use it at the airport before we fly, when we connect and when we land!
Access to airport lounges is the best! Sometimes the lounge experience is far better than the flight.