Charge cards have become a go-to option for businesses, but are they truly superior to classic American Express Business Credit Cards?
While features like virtual cards seem enticing, let's delve deeper and discover why an Amex business credit card might be a better fit for your growing startup and how, today, you can even issue virtual cards linked to your existing Amex credit line using Fyle.
This blog will dissect the key differences between Ramp and Amex Business Credit Cards, empowering you to make the smartest choice for your business.
Ramp Card Overview: Simplicity, Not Flexibility
The Ramp Card offers a straightforward solution, targeting businesses with its unlimited 1.5% cash back and employee card options. However, Ramp requires full payment each month, potentially hindering cash flow for startups with fluctuating expenses.
Additionally, qualifying for a Ramp card might be challenging for new businesses without a proven track record. Ramp requires a minimum bank balance of $75,000 USD to qualify. This can be a hurdle for many startups and SMBs in the early stages, where capital is often limited.
American Express Business Credit Cards: A Powerhouse of Perks
American Express Business Credit Cards, on the other hand, offer a robust package of benefits. They come with generous credit lines, allowing you to manage cash flow by carrying a balance during slower periods. Amex boasts a diverse range of cards, each catering to specific business needs. Some cards offer lucrative rewards programs like travel miles or points redeemable for valuable business supplies.
Ramp vs. American Express Business Credit Cards on Fyle: A Deep Dive
Let's explore some key categories where Amex Business Credit Cards outperform Ramp cards.
Credit Limit
Ramp
Ramp offers a no preset spending limit, which might sound appealing at first. However, this also means you must pay your entire balance each month. This can be a major challenge for startups and SMBs with fluctuating expenses.
Imagine a month with a large software subscription renewal or an unexpected marketing campaign. With Ramp, you'd be forced to come up with a significant sum immediately, potentially impacting your cash flow for other essential business needs.
Amex Business Credit Cards
Amex Business Credit Cards provide a dedicated credit line, giving you flexibility and financial breathing room. This line is based on your business's financial health and allows you to carry a balance if needed. During slower months, you can utilize the credit line to manage cash flow and avoid dipping into your main operating accounts.
Payback
Ramp
As mentioned earlier, Ramp requires full payment of your balance each month. This strict payback period can be restrictive, especially for startups or SMBs in a growth phase where expenses might be unpredictable.
Amex Business Credit Cards
Amex Business Credit Cards offer a traditional credit card payment structure. You have a grace period (typically 21 days) after your statement closes to pay your balance in full without incurring interest charges. This extended payback period allows you to manage your cash flow better and frees up capital for other business needs.
Additionally, some Amex cards offer features like "Pay Over Time" which lets you extend payments on larger purchases for a set fee, providing even more flexibility.
Rewards Program
Ramp
Ramp offers a flat 1.5% cash back on all spending. This can be a decent benefit but it doesn't cater to specific business needs.
Amex Business Credit Cards
Amex boasts a diverse range of cards, each with targeted rewards programs designed to benefit specific business types. Here are some examples:
- Travel Rewards: For businesses that travel frequently, Amex offers cards that accumulate points redeemable for flights, hotel stays, and travel upgrades. These rewards can significantly reduce travel expenses, a major cost for many businesses.
- Cash Back on Specific Categories: Several Amex cards offer bonus cash back on specific spending categories relevant to businesses, such as office supplies, shipping, or advertising. Imagine earning extra rewards on every software subscription or marketing campaign!
- Statement Credits: Some Amex cards offer statement credits for specific business purchases, like recurring software subscriptions or cloud services. This effectively reduces your monthly expenses, freeing up capital for other areas.
Credit Cycles
Ramp
Ramp operates on a monthly cycle, which can be problematic if a large expense hits just before the statement closes. Let's say you have a major equipment purchase due at the end of the month. With Ramp, you'd be forced to pay the entire sum immediately, potentially impacting your ability to cover other essential expenses before the next statement cycle.
Amex Business Credit Cards
Amex offers extended grace periods for purchases, giving you more breathing room. This allows you to strategically plan your payments and avoid cash flow crunches. Additionally, Amex statements typically provide a detailed breakdown of charges, allowing you to better track and manage your spending.
Cashflow
Ramp
The requirement to pay your entire balance each month can severely restrict cash flow for growing businesses with fluctuating expenses. Imagine a month with a large marketing campaign followed by a period of slower sales. With Ramp, you'd be forced to come up with significant sums even during slow periods, potentially hindering your ability to invest in growth opportunities.
Amex Business Credit Cards
With their flexible credit lines and extended payback periods, Amex Business Credit Cards empower you to manage cash flow more effectively. You can utilize the credit line during slower months to cover essential expenses and avoid draining your main operating accounts. This financial flexibility allows you to focus on growing your business without worrying about immediate cash flow constraints.
Credit and Card Usage
Ramp
When using fintech cards like Ramp, credit limits can fluctuate more frequently and sometimes without warning compared to traditional credit cards from banks. These unexpected adjustments can lead to declined cards and disrupt your employees' workflow.
For example, if your business experiences a surge in spending or needs to make a large, unplanned purchase, Ramp might lower your credit limit. This could cause disruptions to your operations and throw a wrench in your team's ability to make essential purchases.
Amex Business Credit Cards
In contrast, Amex Business Credit Cards issued by banks offer more predictable and stable credit limits. Once established, your credit limit typically remains the same unless you request an increase or there's a major shift in your business's creditworthiness. This stability ensures your team has the purchasing power they need without the worry of unexpected declines.
Virtual Cards
Ramp Virtual Cards
Ramp offers virtual cards with a good degree of control, allowing you to:
- Set spending limits
- Choose vendors or expense categories for specific cards
- Temporarily lock or disable cards
American Express Virtual Cards with Fyle
Fyle acts as a powerful complement to Amex business credit cards, offering all the features of Ramp virtual cards and more:
- Seamless Issuance: Generate on-demand virtual cards linked to your existing Amex Business Card directly within the Fyle platform. No need for separate applications or approvals.
- Enhanced Security: Assign spending limits and controls to each virtual card. This includes the ability to restrict purchases to specific vendors, categories, or even dates. This ensures they can only be used for pre-approved purchases within the designated budget, preventing unauthorized spending and keeping your finances secure.
- Streamlined Expense Management: Employees can use virtual cards for purchases and easily submit expense reports with attached receipts directly through Fyle. This eliminates the need for manual data entry and simplifies expense reconciliation.
Beyond the Hype: Why Amex Business Credit Cards Are the Real Deal
Charge cards like Ramp might appear fancy, but the hidden costs of mandatory full payments and potential cash flow constraints can hinder your business growth.
American Express Business Credit Cards, with their flexibility, rewards programs, and Fyle integration, offer a more well-rounded solution for businesses of all sizes.
Don't follow the hype—for true financial empowerment, choose an Amex Business Credit Card and unlock your business's full potential.
