- Consider getting a business credit card if you own a company or work freelance jobs and side gigs.
- Compare sign-up offers, bonus rewards, and purchase protection when evaluating business credit cards.
- Read Business Insider's guide to the best small business credit cards for more in-depth information.
What makes business credit cards unique
If you earn money from anything other than your day job, a business credit card can help you separate your personal and professional finances.
Using a business credit card helps you keep personal and work expenses separate — an absolute must for clean accounting on both sides. Responsible use of your business credit card can even help improve your personal credit score over time.
Even without your own formal small business, you might still qualify for a small business credit card — and you might want to do so for a number of reasons.
Here's what you should know about how and when to consider getting one.
Business credit cards and their importance for small business owners
The best business credit cards offer many benefits in common with personal credit cards such as attractive welcome bonus offers, extended purchase protection, and travel insurance. In the case of airline credit cards and hotel credit cards, business cards can also come with day-of-travel perks such as free checked bags and anniversary award nights.
Financial management and expense tracking
Business cards often offer many additional perks that personal credit cards do not. For example, many business credit cards come with financial management and expense tracking tools for anyone who handles your company finances, simplifying expense reporting and other tedious tasks.
Build a strong business credit profile
Business credit cards also offer access to business credit lines, enhancing cash flow management and providing flexible credit options for businesses. Building out your business credit profile with a business credit card can help you pursue a larger business loan down the road or secure a better interest rate.
Benefits of business credit card rewards for businesses
There are a lot of great business rewards cards available on the market. So if you've been thinking about applying for one, now might just be the right time. Before you do, though, here are several benefits you should look for in any business credit card you apply for.
Generous sign-up bonus (welcome offer)
One of the best reasons to apply for a business credit card is that they often offer introductory bonuses that are as good as, or even better than, their personal counterparts.
For example, the Chase Sapphire Preferred® Card, with a $95 annual fee, is currently offering new cardholders 60,000 bonus points after you spend $4,000 on purchases in the first three months from account opening. On the other hand, the Ink Business Preferred® Credit Card is offering new cardholders 90,000 bonus points after spending $8,000 on purchases in the first three months from account opening, and it has a $95 annual fee. So you could potentially earn more bonus points, if you're able to meet the spending requirement, by applying for the business card.
The Hilton Honors American Express Surpass® Card has a $150 annual fee and its welcome bonus offer is 130,000 Hilton Honors bonus points after you spend $3,000 in purchases on the card in your first six months of card membership. With a $195 annual fee, The Hilton Honors American Express Business Card is currently offering a welcome bonus of 130,000 Hilton Honors bonus points after you spend $6,000 in purchases on the card within the first six months of card membership (Terms Apply).
Bonus earning categories
Like personal rewards credit cards, many business credit cards earn bonus points on particular purchase categories. No matter which business credit card you apply for, you should make sure it earns bonus points or miles where you actually spend the most money. Some business cards even offer a certain amount of flexibility when it comes to maximizing your purchase activity.
For example, the American Express® Business Gold Card earns an excellent 4 Amex Membership Rewards points per dollar on up to $150,000 in combined purchases per year on the two categories where you spend the most each month from a prescribed list of possibilities. So even if your buying habits vary from month to month, you can still take advantage of the card's bonus earning (Terms Apply).
Since many small businesses tend to make large one-time purchases, some business credit cards also offer bonus points or miles on big buys as well. For example, the Delta SkyMiles® Platinum Business American Express Card earns 3 miles per dollar on eligible direct Delta and hotel purchases, but also 1.5 miles per dollar on eligible transit and U.S. shipping purchases, plus single eligible purchases of $5,000 or more, on up to $100,000 per calendar year (Terms Apply).
Day-of-travel benefits
Many of the best travel cards — both business and personal — offer perks that make the travel experience itself that much better. These can include things like free checked bags and priority boarding, like many of the best airline credit cards do, or automatic elite status and free anniversary nights, like those offered by many of the best hotel credit cards.
For example, the CitiBusiness® / AAdvantage® Platinum Select® World Elite Mastercard® includes a free checked bag for cardholders and up to four companions on the same reservation plus preferred boarding. The Marriott Bonvoy Brilliant® American Express® Card confers automatic Marriott Bonvoy Platinum elite status with perks like bonus points on stays and late checkout, plus an annual free night redeemable at properties that cost up to 85,000 points (Terms Apply).
Aside from privileges with a particular airline or hotel chain, if you spend a lot of time passing through airports, you should consider a business credit card that comes with a statement credit of up to $120 to refund the application fee for Global Entry or TSA PreCheck®, like the Southwest® Rapid Rewards® Performance Business Credit Card.
You might also want a card that gets you into airline lounges, like The Business Platinum Card® from American Express, which includes free Priority Pass airport lounge access at over 1,700 lounges around the world**, plus entry to Amex's own Centurion lounges — and 10 visits to the Delta Sky Clubs when you're traveling on Delta (Terms Apply).
Travel coverage
If you're a frequent traveler and use your business credit card for work trips, you need to think about whether it offers adequate coverage in case things go wrong while you're on the road. Take a look at your card's benefits and make sure it extends protection for things like trip interruption, cancellation, and delays, as well as lost luggage and primary rental car insurance.
One card that offers exceptional travel coverage is the Ink Business Preferred® Credit Card. For example, if your flight is delayed by at least 12 hours (or your delay requires an overnight stay), you can be covered up to $500 for reasonable expenses such as lodging, transportation, food, etc.
The Business Platinum Card® from American Express extends trip cancellation insurance up to $10,000 per trip and $20,000 per 12-month period as well as trip delay insurance that kicks in at six hours and is good for up to $500 per trip in case you need to spend money on things like accommodations or meals (Terms Apply).
Purchase protection
Many small business owners need a business credit card specifically to make large purchases — such as for equipment or supplies — for work. If that's your situation, it is imperative to use a credit card that offers sufficient purchase protection in case something goes wrong with the things you buy.
For example, Chase's purchase protection on the Ink Business Unlimited® Credit Card and the Ink Business Cash® Credit Card will both cover you against damage or theft on eligible items up to 120 days after you make a purchase with caps of $10,000 per claim and $50,000 per account.
Certain American Express cards offer similar coverage, such as the Delta SkyMiles® Reserve Business American Express Card which offers purchase protection on eligible claims of up to $10,000 each and $50,000 per account per calendar year. Using a card with purchase protection like this can literally save you thousands of dollars if something goes wrong with a laptop you purchased for work, or an expensive monitor or TV (Terms Apply).
As a side note, some credit cards offer cell phone protection (usually subject to a deductible) against damage or theft, including the Ink Business Preferred® Credit Card.
What to know about business credit card benefits
There are plenty of great reasons to apply for a business credit card, and there are also some key benefits you should look for in any business credit card you are thinking of getting. The key to maximizing any business credit card you carry is to choose one with a great welcome offer that earns generous rewards across your top categories of spend and also saves you time and money through various travel and purchase protections.
And remember: A business credit card affects your personal credit — for better or worse.
Business credit card benefits and advantages frequently asked questions
Business credit cards offer detailed expense tracking and reporting tools that simplify managing company finances and can help in budgeting and tax preparation by keeping business expenses separate from personal expenditures.
Yes, responsible use of a business credit card, such as making timely payments and maintaining a low credit utilization ratio, can help build and improve your company's credit rating.
Typical rewards combine one or more of the following categories including cash back, points for travel, hotel stays, or merchandise, or exclusive discounts with partner companies.
As with any form of credit, the risks of using a business credit card include racking up debt if you don't pay your monthly statements in full, and possibly damaging your credit score if you miss payments or pay them late.
When choosing a business credit card, consider your individual business needs such as cash flow management, travel expenses, or inventory purchasing. Look for cards with reward programs that match your spending patterns, low interest rates, and beneficial terms and fees.
