Should You Get a Business Credit Card? Pros & Cons

A business credit card, much like a consumer credit card, lets you make purchases on credit. Typically meant for small businesses, these cards give you the ability to build your business credit history. They tend to come with other business-specific perks as well. Unlike a corporate credit card, where a company is liable for the debt, a business card holds the primary cardholder liable for payments.

While business credit cards let you separate your personal and business expenses, they can also improve short-term cash flow and give you access to good financing terms. Besides, you may also expect a higher credit limit than that offered through a consumer card.

• Should You Get a Business Credit Card?
• Best Business Credit Cards
• Pros & Cons of a Business Credit Card
• How to Apply for a Business Credit Card
• Quick Tips on Using a Business Credit Card Responsibly
• Other Questions You May Have About Business Credit Cards

If building business credit history is a priority for you, you may benefit by getting a business credit card. Almost all issuers of business cards report payment activity to commercial credit bureaus. And depending on your card’s issuer, you might even be able to keep the card’s activity from affecting your personal credit history.

A small business credit card might also be worth considering if you don’t want to mix your personal and business expenses. This can be particularly helpful when you’re filing your taxes. Several such cards come with various expense management tools. Getting additional cards for your employees is also usually an option.

The best small business credit cards tend to come with cash back, reward points or miles. This can be beneficial for people who wish to earn rewards on their business spending. Moreover, employee cards that are authorized users likely earn rewards too.

However, there are a few notable differences between business and personal cards. These differences include available credit limits, access to expense management tools, the ability to build business credit and the application process. For instance, the information you need to provide when you apply for a business credit card is not the same as consumer cards. In the case of the former, you’ll need to provide the name of your business, its entity type and other relevant details.

To summarize, you may consider getting a business credit card for these cases:

• For building business credit
• To streamline employee spending
• To earn rewards/cash back
• For better expense management
• To deal with short-term cash flow problems during uncertain times

Don’t get a business credit card if either of these apply to you:

• If you plan to use it as revolving credit because you’ll wind up paying steep interest charges
• If you want to build personal credit

Among the top business credit cards, you'll find ones that don't charge annual fees and ones that do. However, all offer you the opportunity to earn rewards/cash back and may give you access to employee management tools and other perks. However, you must consider your specific requirements and spending patterns to select the one that suits you best.

• American Express Blue Business Plus Credit Card
  The no-annual-fee American Express Blue Business Plus Credit Card offers 2X points per dollar on eligible business purchases up to $50,000 every calendar year. Employee cards come with no annual fees. You stand to earn 15,000 American Express Membership Rewards after spending $3,000 on purchases in the first three months of card membership.
• Chase Ink Business Cash Credit Card
  With the Chase Ink Business Cash Credit Card, you can earn up to 5% cash back on business purchases through its bonus categories. You can earn a welcome bonus by meeting a spend-based requirement. You pay no annual fees for the primary or additional employee cards.
• Brex Card
  This no-annual-fee card offers up to 8X points per dollar through its bonus categories. It does not require a personal guarantee.
• Bank of America Business Advantage Unlimited Cash Rewards Secured Card
  The Bank of America Business Advantage Unlimited Cash Rewards Secured Card is suited for people with no or poor credit history. It offers 1.5% cash back on all eligible business purchases. You need to provide a minimum security deposit of $1,000.
• Capital One Spark Miles Card
  The Capital One Spark Miles Credit Card offers 5X miles per dollar on hotel and rental car bookings made through Capital One Travel. All other purchases earn 2X miles per dollar. New cardholders can earn 50,000 Capital One miles by spending $4,500 on purchases in the first three months. In addition, the $95 annual fee is waived for the first year. Employee cards come with no annual fee.
• American Express Hilton Honors Business Card
  The American Express Hilton Honors Business Card offers 12X Hilton Honors points per dollar on purchases you make directly at Hilton Hotels and Resorts. It earns up to 6X points per dollar through other bonus categories. To get started, you can earn 130,000 Hilton Honors points after you spend $3,000 in the first three months of card membership.
  The card has a $95 annual fee and comes with excellent travel-related benefits.
• Amazon Business American Express Card
  The Amazon Business American Express Card lets Amazon Prime members earn 5% cash back on U.S. purchases at Amazon Business, Amazon.com, AWS and Whole Foods Market on combined spending of up to $120,000 each year. Purchases across a few other bonus categories come with 2% cash back.
  You can earn a quick $100 statement credit by spending $3,000 on purchases in the first three months. Primary and additional employee cards incur no annual or foreign transaction fees.

Understanding the advantages and disadvantages of credit cards for businesses puts you in a better position to decide if getting one might work well for you. For instance, if you have no or poor credit history, you might want to work on building that first.

If you use your business credit card responsibly, you can benefit in several ways. Plus, many of the leading credit card issuers in the U.S. provide cards for business owners, so you will have several options to choose from.

Even the best small business credit cards may have negative consequences if you don’t use them properly. It’s always recommended you choose your card based on your specific needs and situation to ensure you're capitalizing on your spending and getting the most out of a card’s benefits.

• Try to pay off your balances in full each month.
• If that's not possible, keep your credit utilization ratio below 30%.
• Take advantage of interest-free payment plans to make large purchases, and pay them off in time.
• Earn welcome bonuses by meeting spend-based requirements.
• Determine if the welcome bonus and rewards are worth the cost of the card.
• If you opted for a card with an annual fee, make sure you earn adequate rewards and use the card's benefits well enough to offset that fee.

Looking at answers to other commonly asked questions about how business credit cards work and how you may get one might help you determine which path to take.

Now that you know the pros and cons of business credit cards, determine if getting one might work well for you. If you decide to move forward, compare your options based on factors such as annual fees, rewards, welcome bonuses and intro 0% APR offers.

Credit card experts at MoneyGeek analyze business spending trends using data from the Bureau of Labor Statistics (BLS). As of this writing, they have compared 545 business credit cards and subjected them to MoneyGeek's unique ranking methodology to arrive at the best. They've looked at aspects such as rewards, welcome offers and fees so you can easily select a card that works well for you.

Our team of experts endeavors to answer all reader questions quickly and accurately. We make it a point to keep up with the latest trends and industry-related news so you can easily find the information you're looking for.