Which business credit card is best?

Your Business Credit columnist Elaine Pofeldt
Elaine Pofeldt is a journalist whose articles on entrepreneurship and careers have appeared in Fortune, Working Mother, Money and many other publications. She is a former senior editor at Fortune Small Business magazine and an entrepreneur herself, as co-founder of 200kfreelancer.com, a website for independent professionals. She writes "Your Business Credit," a weekly column about small business and credit, for CreditCards.com.

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Question Dear Your Business Credit,
I'm looking to open a credit card for business expenses only. However, I do not own my business. I'm looking for a better way to keep track of all tax-deductible expenses, instead of trying to save all the receipts.

I will be paying the balance off every month (if possible every week through the card issuer’s website). Do you have any suggestions on what kind of card to open? Thank you! - Jason

Answer Dear Jason,
It’s a great idea to keep your business and personal expenses separate by reserving a separate credit card for business expenses.

Doing so may not reduce the need to retain your receipts. You may still need to produce them if your tax returns are audited. (For guidance on when you need to retain receipts, ask your accountant or see the IRS document on record keeping.) Nonetheless, using a separate credit card for your business expenses will make it easier for you to keep track of business purchases.

I am not certain that a business credit card is the best bet for you. A business card may be advantageous if you frequently make business purchases because the rewards points will be tailored to business purchases.

However, if you only need to break out the card occasionally, setting aside one of your personal cards for your tax-deductible expenses may be more practical. Since you don’t own the business, you may not be able to provide the identifying information required on some applications for business credit cards or details that are often requested, such as the firm’s annual revenue.

While business cards do come with many benefits, such as rewards for common business purchases, they also have some drawbacks. One downside of getting a business card is that issuers don’t have to make the same detailed disclosures of what it costs to use them as personal credit card issuers do under the Truth in Lending Act. Though many card issuers provide this information voluntarily, not all do, so that can make shopping around more difficult.

And because many business cards require a personal guarantee, in many cases you are no less responsible for any unpaid bills than you would be if you used a personal card. I’ve discussed the differences between business and personal cards in a previous column, which you may find helpful.

If you still want a business card, you might ask if the owner would be willing to provide company credit cards to you and other colleagues who need them. In that case, the owner would likely be the one providing a personal guarantee to pay off the cards if necessary. That could give you some protection if, for instance, you work for a startup that could run out of money and leave you hanging when it comes time to reimburse you for your expenses.

Credit cards can be very convenient in a business, but it’s always important to be aware of who will have to pay the bill in the end.

There are many small-business cards your company might consider. Here are some that could be worth checking out, given the perks they offer for common business purchases:

  • Business Gold Rewards Card from American Express OPEN ($0 annual fee for the first year, then $175). This card can be handy if you make a lot of purchases. If you spend at least $5,000 on the card in your first three months of membership, you can get 50,000 rewards points.
  • Capital One Spark Cash for Business (No annual fee first year, $59 after) With 2 percent cash back on all purchases and a $500 bonus when you spend $4,500 in the first three months, this is a great card to put some money back in your wallet. Beware of the high interest, though, so be sure to not carry a balance. 
  • Ink Business Cash Card (No annual fee.) If you are putting a lot of office expenses on your card, this one may be a good fit. It offers 5 percent cash back on the first $25,000 spent on combined purchases at office supply stores and on cellular phone, landline, internet and cable TV services each account anniversary year. It also offers a $500 bonus if you spend $3,000 on purchases in the first three months of opening the account.

There are plenty of other choices, so look around to make sure you maximize the benefits. The perks can be very valuable. 

See related: Can you apply for a business card - before you own a business? Business card reviews, Best business credit cards

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Updated: 12-09-2018