Resources / Growing your business

Why Business Credit Cards Can Be a Win-Win

By: Ryan Kelly September 12, 2022

Nearly every company, no matter how well-financed, should at least consider getting and using a business credit card. Business credit cards are often even better than personal cards when it comes to things like perks and benefits, and they also carry special protective advantages by being tied to your company instead of to your own finances. Just like with personal credit cards, you should avoid using business credit cards if your company doesn’t generate the cash to pay your bills in full. But assuming you’re able to manage your credit responsibly, you should be able to leverage the features of a good business credit card to your company’s advantage. Here’s a look at why business credit cards could be a win-win for your company, along with a look at two specific cards currently offering a high level of benefits.

Credit Limits

For maximum flexibility with your business spending, it’s best to look at business credit cards rather than personal ones. Business credit cards typically come with much higher limits than personal cards, likely because companies generally have both higher revenue and higher expenses than individuals. Higher expenses translate to more frequent transactions on a credit card, which obviously benefits card issuers. Having a higher revenue stream to back up those expenses also makes it less likely that a business will default on payments, which is another plus for issuers. Putting it all together, you’re more likely to get a higher credit limit with a business credit card than a personal one, which is always a good resource to have.

Sign-Up Bonuses

Although it’s true that many personal cards offer large sign-up bonuses, business cards can potentially offer even larger ones. This is because business credit cards often require higher initial spending in the first three months of card ownership. In return for this higher spending, some business cards will offer higher sign-up bonuses. As sign-up perks vary from card to card and promotional offerings often change, be sure to check all of the available offers before you choose on a card. Working with a financing specialist can be a good way to get free advice as to which credit card is the best choice for your business.

Extra Rewards for Business Spending, as Opposed to Personal Spending

Personal cards are very generous with bonus rewards for spending in categories like dining and air travel. But for many businesses, those supposed perks don’t amount to much. For example, if you’re operating a coffee shop, you aren’t likely sending your employees out around the world on business trips, nor are you wining and dining clients in an effort to generate new business. But you may very well spend a lot of money on advertising, office supplies, shipping and the like. In this case, and with so many other businesses, using a personal credit card won’t really help you, at least in terms of earning additional perks. A business card, on the other hand, will typically provide you with bonus points in the very categories that your company uses.

Liability Limitations

When you put your business expenses on a credit card, you’re offered some level of protection as a proprietor. In the event that your business runs into financial difficulty, your creditors may not be able to go after you personally, but only the assets of your business. You should check with your legal advisor before you rely on your business cards to protect you, but generally speaking, your card use and your business structure will insulate you from personal liability.

Organization of Business Expenses

Another major reason why a business credit card can make sense is that it keeps your personal expenses separate. If you’re trying to track your spending or need a record of transactions for bookkeeping purposes, having all of your company expenses on a separate business credit card can be invaluable. Rather than wasting time trying to sort through which expenses are personal and which are for your business, simply keeping those transactions separate is a smart way to go. It may even save you time and money if you’re working with an accountant, as all of your transactions will be neatly categorized ahead of time.

Case Study: Chase Ink Business Preferred

The Chase Ink Business Preferred card is one of the best options for many companies. For starters, the card offers an extremely generous 100,000 points after spending $15,000 on purchases in the first three months after opening an account. For a relatively minor $95 annual fee, businesses also enjoy triple points on the first $150,000 spent in the following categories:

 

  • Shipping
  • Advertising with social media sites and search engines
  • Internet, cable and phone services
  • Travel

 

Although not all businesses spend on travel, most incur shipping, advertising and various utility services, so earning triple points can be a huge bonus. One point per dollar is earned for all other purchases.

 

On top of the points kickers offered by the card, the Chase Ink Business Preferred also offers these additional services and protections:

 

  • Fraud protection
  • Purchase protection
  • Employee cards at no additional cost
  • Cell phone protection
  • Extended warranty protection
  • Trip interruption and cancellation insurance
  • Roadside dispatch

All in all, the Chase Ink Business Preferred card offers a lot of benefits for small businesses with little cost.

Case Study: U.S. Bank Business Triple Cash Rewards World Elite

The U.S. Bank Business Triple Cash Rewards World Elite card is quite a mouthful, but it’s equally stuffed with features and benefits for small businesses. Yet, this card offers a completely different range of perks than the Chase Ink Business Preferred card. For starters, this card has no annual fee. This means that the bonuses offered by the card are essentially free for your business. Here are the top offerings of the U.S. Bank Business Triple Cash Rewards World Elite card:

 

  • $500 in cash back after spending $4,500 in the first 150 days after opening the account
  • A 0% APR on purchases and balance transfers for the first 15 billing cycles
  • A $100 annual statement for recurring software subscriptions
  • 3% cash back at gas and EV charging stations, cell phone service providers, restaurants, and office supply stores
  • 1% cash back on all other purchases
  • Free employee cards
  • 5% cash back on prepaid car rentals and hotels booked through the U.S. Bank Travel Rewards Center

 

The 0% introductory APR on balance transfers and purchases can offer great flexibility for small businesses looking for a cheap financing option. The initial cash back reward of $500 after a $4,500 spend amounts to a more than 10% return on your first purchases, which is a substantial reward. Overall, although quite different from the Chase Ink Business Preferred, the U.S. Bank Business Triple Cash Rewards World Elite card is a major contender in the space.

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