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A 2023 guide for business credit cards

Expense management solution for the data-centric CFO

A recent survey by Fundera revealed that:

  • 67% of business owners have a business credit card

  • 7% of small business owners use a business credit card as a means of startup capital

  • 37% of millennial startup founders use business credit cards for startup capital

  • 30% of small business owners seek credit cards as a means of investment capital

In essence, one out of ten SMB owners in the US gets paid (in credit card cash backs and reward points) to spend on business expenses. So clearly, business credit cards are the most popular way to spend among SMBs.

If you are currently considering business credit cards for your business, you're in luck! This guide contains everything you need to know about small business credit cards in 2023. Hopefully, after reading this, you'll be better equipt to decide the best way forward for your business. So, let’s get started!

What is a business credit card?

A recent survey by Fundera revealed that:

  • 67% of business owners have a business credit card

  • 7% of small business owners use a business credit card as a means of startup capital

  • 37% of millennial startup founders use business credit cards for startup capital

  • 30% of small business owners seek credit cards as a means of investment capital

In essence, one out of ten SMB owners in the US gets paid (in credit card cash backs and reward points) to spend on business expenses. So clearly, business credit cards are the most popular way to spend among SMBs.

If you are currently considering business credit cards for your business, you're in luck! This guide contains everything you need to know about small business credit cards in 2023. Hopefully, after reading this, you'll be better equipt to decide the best way forward for your business. So, let’s get started!

What is a business credit card?

Business credit cards are meant for business purchases and come with defined spending limits based on credit scores. These cards give businesses the power to make purchases without paying from their pockets immediately.

These cards act as a revolving line of credit, allowing businesses to repay their dues over a defined period with associated interest rates. Business credit cards also help extend credit lines for business purchasing, helping small businesses build a healthy credit profile for the future.

How are business credit cards different from personal cards?

Business credit cards function exactly like personal credit cards, except they offer higher credit limits, rewards, and cashback on specific business expenses. These cards also generate in-depth reports and have many bookkeeping benefits.

But a common question most SMBs have is how these cards differ from personal cards? Listed below are three main differences between them. Let's dive in!



  • 1. The impact on personal credit scores

    Almost all SMB credit card providers consider personal income and business revenue while deciding on credit limits. This would make card providers report to commercial and consumer credit bureaus.

    All SMB credit card providers report to the commercial credit bureaus. Some also report to consumer bureaus as routine or when the account accumulates huge debt or has negative credit notes.

    If the card provider reports to the consumer bureau, the business owner's personal credit score is affected if the debt goes unpaid or the cardholder is way behind on payments. Thus, SMB owners as cardholders are always on the hook for debt repayment.

    However, they could protect their personal credit scores by choosing providers who don't report to consumer credit bureaus.

  • 2. Rewards and cashback for spending on business purchases

    Rewards for spending on categories like travel, hotel, and restaurants are a common offering with both personal and business cards.

    Personal cards might be a good option for your business if you purchase inventory from grocery stores, pharmacies, and more. This is mainly because personal cards offer rewards and cashback for these expenses. On the other hand, business cards offer rewards on office supplies, internet, telecom bills, subscriptions, or even ad campaigns.

    If you can't decide which is best for you or your spending is across many categories, a flat-rate rewards card with a standard cashback on all purchases is your best bet.

    What card is best for your business depends on where you spend the most.

  • 3. Easy expense tracking and bookkeeping

    Businesses can deduct taxes for purchases made for business on business and personal cards. However, reconciling business expenses can become problematic if you use the same card for your personal and business expenses.

    The main difference here is business cards offer detailed reports that can help you spot potential deductibles. But, personal cards do not provide such comprehensive reports, leaving you at the risk of losing money to overlooked opportunities.

  • There's a third kind - Charge cards

    Unlike credit cards that define spending limits based on credit scores, charge cards allow uncapped spending. This is the most significant differentiating factor and advantage that charge cards offer over traditional credit cards.

    But the most significant disadvantage of charge cards is that you have to pay off the balance in full every month. As a result, non-payment or late payments could have significant consequences on your finances. These charge cards are excellent for better spend management but not ideal for those who need flexible business financing options.

What’s the best business credit card option for your business?

What’s the best business credit card option for your business?

Understanding your business' spending is critical to picking cards that offer the best rewards and cashback for your use case. So take the time to understand the needs of your business.

Start with questions like:
  • What are the spending needs of your business?
  • What are the purchasing needs of your business?
  • Where does your business incur most business expenses?
  • What are the most common expense categories used?
  • What do your employees think of the current business spending process?
  • What are the current business accounting needs and goals of your business?

Consulting with important stakeholders to answer these questions will help you pick the right credit card (and software) for your business.

When should you get business credit cards for your SMB?

When should you get business credit cards for your SMB?

SMBs use business credit cards with various goals or use cases, not just as a source of credit. Your business finance management system might be due for an upgrade if some or all the use cases we discuss next resonate with you.

  • 1. You want to keep a clear distinction between business and personal expenses
  • 2. You want to make sizeable business purchases and need a revolving source of credit
  • 3. You travel, incur many business expenses, and could use rewards!
  • 4. You want to improve/build personal and business credit
  • 5. You are looking to manage subscriptions better
  • 6. You want to track expenses and control business spend
When should you get business credit cards for your SMB?

Does this mean business credit cards are the only way to better financial management? The simple answer is no.

Small businesses can avail financing from various credit sources, which lend based on the business' revenue and creditworthiness. Some commonly used credit sources are -

  • Charge cards
  • Secured cards
  • A business line of credit
  • Business loans

Small businesses, especially those in the initial phases, might not have the credit scores required to get the desired credit from these sources.

But on the other hand, business credit cards are easily accessible to budding businesses and bring much-needed flexibility to business purchasing. They also help build a healthy credit score which later opens up other financing options for your business in the future.

6 best small business credit cards in 2023

6 best small business credit cards in 2023

6 best small business credit cards in 2023

We've reviewed the best business credit cards in 2023 for US-based small businesses and SMBs to find the perfect credit card that suits your business needs. Let's jump in!

Note: The list has been arranged at random and in no way showcases their quality or our preferences. This list just complies a wide range of credit cards which suit businesses that are at a certain stage in their life cycles. Ensure you read through each description thoroughly before you choose the credit card that’s best suited for you.


1. Capital One Spark Cash Plus

If your business spends on varying categories, a flat-rate cashback card like Capital One Spark Cash Plus is an excellent option for you. You get at least 2% cashback on all purchases with this card.

Best for

Generous and hassle-free cashback irrespective of expense categories

Rewards rate
  • 5% unlimited cash back on hotels and rental cars when you book via Capital One Travel
  • Unlimited 2% cashback on every purchase - with no restrictions on credit limits, location, or category
Card details
  • Intro offer: Up to $1l000 cash bonus
  • Annual fee: $150
  • Recommended credit: Good to Excellent (670 - 850)
Pros
  • Straightforward rewards program with a generous flat-rate return on every transaction
  • No extra charge for international transactions
Cons
  • A $150 annual fee, which is a little steep when compared to other options
  • Since it is a charge card, you must pay your balance in full every month

2. American Express Blue Business Cash™ Card

American Express Blue Business Cash credit card is one of the best cards for new and small businesses in the US. It offers a welcome bonus, flexible financing options, a competitive rewards program, and zero annual fees.

Best for

Startups and new businesses

Rewards rate
  • 2% cashback on all eligible purchases, capped at $50,000 per year
  • 1% cashback on all eligible purchases after the $50,000 spend threshold per year
Card details
  • Intro offer: $250
  • Annual fee: $0
  • Regular APR: 13.99% - 21.99% Variable
  • Recommended credit: Good to Excellent (670 - 850)
Pros
  • The spending requirement for the intro offer is comparatively low
  • Access to a flexible financing option called Expanded Buying Power for Amex business cardholders
Cons
  • 2% cashback is capped to a $50l000 spending threshold, after which it becomes 1%
  • No intro APR on balance transfers

3. Capital on Tap Business Credit Card

The Capital on Tap Business Credit Card is an affordable business credit card with no annual fees and zero additional charges for foreign exchange transactions or international purchases. It also offers unlimited flat-rate cash back at 1.5% on all purchases.

Best for

Uncomplicated and affordable credit card for SMBs

Rewards rate
  • Unlimited 1.5% cashback with no annual fee
Card details
  • Intro offer: $750 Cashback
  • Annual fee: $0
  • Regular APR: 9.99% - 34.99% APR
  • Recommended credit: Good to Excellent (670 - 850)
Pros
  • This card integrates with Apple and Google Pay to facilitate contactless payments in a post-pandemic world
  • 1.5% cashback on all purchases, no questions asked
Cons
  • The APR on this card goes up to 34.99 percent variable, which is relatively high
  • The introductory bonus offers only $200 back on spending $15l000 over three months

4. Ink Business Cash® Credit Card

If you and your employees incur expenses for fuel and restaurants, this flat-rate rewards card is for you. The Ink Business Cash® Credit Card offers 2% cashback on these categories for your first $25l000 in combined purchases per account anniversary and then becomes 1%.

Best for

Cashback on office supplies purchases

Rewards rate
  • 5% cashback on the first $25l000 spent in combined purchases at office supply stores, on telecom, cable & internet each account anniversary year
  • 2% cashback on the first $25l000 spent in combined purchases at gas stations and restaurants each account anniversary year
  • 1% cashback on all other card purchases with no cap on rewards
Card details
  • Intro offer: $750
  • Annual fee: $0
  • Regular APR: 13.49% - 19.49% Variable
  • Recommended credit: Good to Excellent (670 - 850)
Pros
  • Has a massive sign-up bonus of $750
  • Has no annual fee, which makes it perfect for SMB owners
Cons

The 5% cash back earned is capped for the initial $25l000 you make in combined purchases on certain categories

5. The Blue Business® Plus Credit Card from American Express

If tracking your purchases and rewards to maximize credit card benefits sounds tiresome and unappealing to you, The Blue Business® Plus Credit Card from American Express is a great option! It rewards every business purchase up to the first $50l000 with 2X reward points and 1 point per dollar after.

Best for

Flat-rate rewards on everyday business expenses

Rewards rate
  • 2X Membership Rewards® apply on everyday business purchases, including food, fuel, and office supplies up to the first $50l000 per year, after which it becomes 1 point per dollar.
  • Offers low-interest rates for big business purchases.
Card details
  • Intro offer: 15l000 points
  • Annual fee: No annual fee
  • Regular APR: 13.99% - 21.99% Variable
  • Recommended credit: Good to Excellent (670 - 850)
Pros
  • Great rewards program for a card with no annual fees
  • Access to a flexible financing option called Expanded Buying Power
Cons
  • No intro APR offer on balance transfers
  • Caps on rewards

6. Capital One Spark Miles for Business

Capital One Spark Miles for Business is the best option for those who often travel for work. This card offers 2X miles on every purchase and has no caps on minimum redemption or expiration dates!

Best for

Rewards on business travel expenses

Rewards rate
  • 2X miles per dollar on every purchase with no limits or category restrictions
  • Offers low-interest rates for big business purchases
Card details
  • Intro offer: 50l000 miles
  • Annual fee: $0 intro for the first year; $95 after that
  • Regular APR: 21.24% (Variable)
  • Recommended credit: Good to Excellent (670 - 850)
Pros
  • Generous rewards program considering there is no annual fee
  • Zero transaction fees for international transactions
Cons
  • No intro APR on purchases or balance transfers
  • Ancillary business-centric benefits aren't great compared to other options in the market

How to apply for a business credit card?

How to apply for a business credit card?

Now that you know about the top business credit cards in 2023, it's time to apply for the best card that suits your business needs. Follow these four simple steps to get the best business credit cards for your organization:


1. Note your credit scores

Your business and personal credit score indicate your risk as a borrower. These scores determine the types of cards you qualify for, credit limits, and interest rates.

There are four credit scores that business owners can improve to get access to better cards and benefits:

  • Personal credit score
  • FICO small business score
  • Experian Intelliscore
  • D&B Paydex

There's no reason to worry if you have poor credit scores! You can improve them by resolving any negative entries on your credit reports and making on-time payments regularly.

2. Understand the benefits of credit cards for your business

SMB owners use credit cards with various agendas in mind. What's yours?
Understanding your business's lifestyle and general needs to shortlist cards will help satisfy your business use case.

Here are some questions to ask while evaluating credit card options:

  • Do they have a 0% intro APR?
  • Is there a fee on international transactions?
  • What are the travel points, perks, cashback, and miles on this card?
  • Do they offer welcome bonuses?
  • Can they issue multiple cards or accounts?
  • What credit bureaus do they report to?

With these questions deeply thought of and answered, you can move on to the next step of getting a business credit card for your SMB.

3. Identify your top expense categories

Itemize all your business purchases over the previous quarter to understand which expense categories your organization utilizes the most. This will help you know how much your total spend will be and which rewards program offers the best bang for your buck.

Common categories business credit card providers offer rewards on:

  • Travel & hotels
  • Fuel
  • Food & restaurants
  • Office supplies

Predict usage based on the previous quarter's spend analysis to make the best pick for your business!

Say, for instance, you plan to use credit cards exclusively for employee business travel. In this case, sharing a corporate credit card is not recommended. Instead, you may want to consider a card provider that can issue multiple cards and offer good rewards for travel spending.

4. Pay close attention to the annual fees

No annual fee is a popular feature many card providers offer. However, cards with annual fees usually come with better reward programs that might save you more money than the annual fee you paid.

Compare rewards, perks, and savings with different card programs to understand which offers the most value for your intended use.

What you will need to apply for a business credit card

What you will need to apply for a business credit card?

The process for applying for business credit cards is the same as that for a personal card. Whether you fill out the application online or at a bank, these are all the documents you'll need:


  • Legal business name
  • Business address
  • Business phone number
  • Employee identification number
  • Annual business revenue
  • Age of business
  • Monthly business expenses
  • Personal income
  • Social Security number or taxpayer-identification number
  • Date of birth
  • Statements of dispute if there are issues on your credit report

When you have all this data handy, the credit card application process will only take a few hours, and you can start earning rewards on business expenses!

The next crucial step after picking a business credit card of your choice

The next crucial step after picking a business credit card of your choice

As an SMB owner, you always want to stay in control of your expenses, even if it is on credit cards. But unfortunately, a somewhat real-time spend visibility is only a premium offering with corporate credit cards for large companies with multiple employees and massive spending. This means SMBs almost always have practically no visibility into spend, even though they have access to these cards.

In recent years, FinTech companies like Brex, Divvy, and Ramp, emerged to bridge the gap by offering charge cards with a real-time spend management software. Since all cards are linked to their software, spend notifications, analytics, and insights become real-time. As a result, admins could see spend as it happened and did not have to lift a finger for corporate credit card reconciliations. This was a fresh breath of air.


Yet, there is a catch...

  • These card providers undertake huge risks by giving out cards with no personal guarantee or credit scores to businesses. However, they need you to maintain a very high minimum bank account balance. The minimum balance requirement is usually an exorbitant ask for a large share of SMBs.
  • Their credit cycles are typically very short - a month at most. The total amount spent is automatically deducted from your bank account and settled at the end of every cycle.

While these FinTech companies have filled the gap that banks could not by providing a decent user experience and real-time spend management, they still come with SMBs having to maintain hefty balance requirements and monthly billing cycles. This is clearly not cut out for SMBs working on stringent budgets and finances. This is where Fyle comes in.

The future of business credit card management with real-time spend management

The future of business credit card management with real-time spend management

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We asked our customers what would make credit card management effortless for them. They wanted to keep their banks but also wanted the incredible software experience.

That's fair; it is not easy to abandon your trusted bank and switch to an entirely different source of credit simply for a better software experience.

Long story short, Fyle partnered with VISA to offer real-time spend management to small businesses in the US. Soon, our integrations with AMEX and Mastercard will be live, making real-time spend management available to 73% of the country's credit card market!



The future of business credit card management with real-time spend management

By totally surpassing the banks to get live feeds from credit card providers, Fyle offers everything FinTech credit card providers provide without having to change their banks or cards. Moreover, with real-time expense matching, reconciliation is free of manual effort too!

This means no matter the bank or card you pick, Fyle will always have you covered when it comes to effortless business credit card management and real-time spend management. We hope you make the best pick to manage and grow your business to new heights!

Rahul Radhakrishnan
Rahul Radhakrishnan Author

Rahul believes everyone has a story to tell.
If he isn't writing one, he's hearing one from
someone.

Shruti Kesavan
Shruti Kesavan Editor

Shruti Kesavan leads Content Marketing at Fyle. When not convincing people to automate their expense management, she loves to read, travel, and explore the world with her pup.