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Business credit cards play a role in managing small business expenses. Making everyday purchases, strengthening your cash flow, building a credit history, and taking advantage of rewards are just some benefits of opening and using a business credit card. With a robust marketplace of credit card vendors, small businesses should take their time to understand what the best credit card is for their situation. We also look at vendors and key things to know about merchant accounts and credit card processing.

Reasons to use a business credit card

Business credit cards can provide a lot of value for small business owners. Beyond the obvious of giving your business access to capital to operate, a business credit card can be a tool to build credit, provide cash flow flexibility, and more. Let’s dive into some key benefits of using a business credit card:

  • Flexibility: a business credit card gives you flexibility with your cash flow. For example, it might be preferable to use a credit card (as opposed to cash or a debit card) to delay payment until next month. A business credit card gives you options. 

For more information on how to use a business credit card (and other credit and lending products) to improve cash flow, please visit our article titled Smart Ways to Increase Cash Flow with Small Business Financing.

  • On-time payments: Set operational expenses and bills to be paid automatically with your credit card so there are no business interruptions. 
  • Credit: If you are a new business, a business credit card is a tool to establish a business credit profile. New business owners typically have to use their personal credit and personal bank accounts for their business in the early days. This allows you to separate your personal credit score from the business. If your business currently has bad credit, you can rehab it with a business credit card by making all your payments in full each month.
  • Perks and Rewards: Many business credit cards come with benefits, perks, introductory offers, and rewards to incentivize you to open and use your credit card. Business credit cards can specialize in certain types of rewards (i.e., travel, cash back) that might provide even more benefit to your business.
  • Purchase protection: If your credit card falls into the wrong hands, you are typically not liable for purchases you did not make.  

With so many credit card vendors to choose from, it’s worth it to take your time to select the right card for your specific situation. Let’s review some popular credit card vendors and a popular card they issue for small businesses.

Choosing the best business credit card vendor

Business credit card providers offer many types of rewards cards to fit various business needs. For example cashback, reward points, no annual fee, travel, hotels, airlines, no foreign exchange fees, 0% intro APR, and more. Understanding which reward will benefit your business the most is key to acquiring the best credit card for your small business.

In addition to listing some of the best credit card vendors below, we also list a popular credit card they issue, its annual fee, and its introductory offer. Keep in mind that fees and offers are always changing, so review the vendor’s website for the latest information.

Traditional Credit Card Vendors

Traditional credit card vendors like Visa, Amex, and Mastercard, and traditional financial services institutions like banks can be popular choices for your small business credit card needs. Some vendors and card options include:

  • American Express: American Express Blue Business Cash™ Card, $0 annual fee, $250 statement credit after you make $3,000 in purchases on your Card in your first 3 months.
  • Chase: Ink Business Unlimited® Credit Card, $0 annual fee, Earn $900 bonus cash back after you spend $6,000 on purchases in the first 3 months from account opening.
  • Capital One: Capital One Spark Cash Plus, $150 annual fee, Earn up to a $1,000 cash bonus; $500 once you spend $5,000 in the first 3 months, and $500 once you spend $50,000 in the first 6 months of account opening.
  • Bank of America: Bank of America® Business Advantage Unlimited Cash Rewards Mastercard® credit card, $0 annual fee, $300 statement credit online bonus after you make at least $3,000 in net purchases in the first 90 days of your account opening.
  • Wells Fargo: Wells Fargo Business Elite Signature Card, $125 annual fee (first-year fee is waived), $1,000 cash back bonus, or 100,000 bonus points when you spend $25,000 in the first three months.
  • U.S. Bank: U.S. Bank Business Triple Cash Rewards World Elite Mastercard, $0 annual fee, Earn $500 in cash back. Just spend $4500 on the Account Owner’s card in the first 150 days of opening your account.

All of the credit card vendors listed above have multiple options for different types of business situations. Review the vendor websites for a full list of card offers and options.

Airline and Hotel Credit Card Vendors

Airlines and hotels can also be business credit card issuers in conjunction with traditional credit card vendors. These cards can be a great option for businesses that travel. For instance, certain small businesses might value airline upgrades as the central component of their rewards program. Some vendors in the space include:

  • Delta: Delta SkyMiles® Reserve Business American Express Card, $550 annual fee, earn 60,000 bonus miles and 10,000 Medallion® Qualification Miles (MQMs) after spending $4,000 in purchases on your new Card in your first 3 months of Card Membership.
  • United: United Club℠ Business card, $450 annual fee, earn 75,000 bonus miles after $5,000 on purchases in the first 3 months your account is open.
  • Southwest: Southwest® Rapid Rewards® Performance Business Credit Card, $199 annual fee, earn 80,000 points after you spend $5,000 on purchases in the first 3 months.
  • Hilton: The Hilton Honors American Express Business Card, $95 annual fee, earn 130,000 Hilton Bonus Points after you spend $5,000 in purchases on the Card in the first 3 months of Card Membership, plus earn a Free Night Reward after you spend $10,000 in purchases on the Card in the first 6 months. The offer ends on 12/21/22.
  • Wyndham: Wyndham Rewards Earner® Business Card, $95 annual fee, and earn 45,000 bonus points after spending $2,000 in purchases in the first 90 days. 

Merchant accounts and credit card payment processing

In 2020, the Federal Reserve released statistics regarding credit card usage in the United States. The data from the report suggests that credit cards are ubiquitous among US consumers. Some key findings from the report are (as of 2020):

  • 83% of adults had a credit card
  • 98% of adults with an income over $100,000 have a credit card
  • 94% of adults with an income over $50,000 have a credit card

Whether you operate a gas station, an eCommerce website, a clothing retailer, or just about any other type of small business you can think of, accepting credit cards as a payment method is essential because the overwhelming majority of your customers have and use them. Accepting credit cards involves a merchant services vendor/merchant account, more commonly referred to as credit card processing companies.

There is nuance involved, terms to know, vendors to research, and fees to understand when it comes to finding the best credit card payment processing service for your business. For example, whether you are a high-volume processor or a low-volume processor, in-person vs online-only payments, and more. Let’s review:

  • Fees: Credit card processors have fee-based pricing models and there are a lot of fees to be aware of. They can include but are not limited to cancellation fees, per transaction fees, software and equipment fees, startup fees, subscription/monthly fees, refund fees, chargeback fees (usually only a concern of high-volume, high-risk businesses), PCI compliance fees, foreign transaction fees, and more.
  • In-person payments: If your business is going to accept in-store/in-person payments you will need a point-of-sale terminal that has a card reader, more commonly referred to as a POS system. For entrepreneurs who operate a mobile business and accept payments in person (for example, a food truck or a farmers market vendor), a cell phone can act as a POS system.
  • Virtual terminal: A virtual terminal gives you the functionality to accept credit cards online. This is required for eCommerce businesses.
  • Vendors: Similar to business credit cards, the credit card processing landscape is packed with vendors. Finding the best vendor for your business requires research and is determined by your type of business. However, some popular vendors in the space are Helcim, Stax, Square, and Stripe.

Let’s take a look a closer look at some of the best credit card processing companies:

Helcim

Helcim offers interchange plus pricing. Interchange fees are based on two factors: the type of card the customer uses and a per transaction fee from the credit card processor. On average, for in-person transactions, Helcim charges 1.86% + $.08 and for keyed/online transactions 2.40% + $.25. They also offer all-in-one merchant solutions which include POS terminals, a virtual terminal, invoicing, developer APIs, and more. On their website, they also advertise no monthly fees and no hidden charges. For more information, visit their website: https://www.helcim.com

Stax

Stax is an all-in-one merchant solution with a monthly pricing model that tailors its product to small businesses, large businesses, and by industry. Their key value proposition is a customized solution for your business supported by a customer support team to ensure success. For more information, visit their website: https://staxpayments.com

Square

An all-in-one merchant solution that also offers business solutions and management tools such as payroll and email marketing. In-person transaction fees are 2.6% + 10 cents, online transaction fees are 2.9% + 30 cents, and manually entered transaction fees are 3.5% + 15 cents. Square lets you calculate your fees using their fee calculator: https://squareup.com/us/en/payments/fee-calculator

Stripe

An all-in-one merchant solution that accepts a wide range of payments including international payments and ACH Direct Debit. Base pricing for a credit card transaction is 2.9% + $.30. Stripe offers customized pricing for Interchange pricing, high-volume transaction businesses, and more. For more information, visit their website: https://stripe.com/

As an add-on benefit, these service providers have integrations with Quickbooks which means you can avoid manual entry and automate the transfer of sales activity into QuickBooks.

Credit Card Processing Fees

The two main pricing models credit card processing companies use are interchange-plus pricing and flat-rate pricing. Understanding how each works will help you make the best decision for your specific situation:

Interchange-plus pricing: an adjustable-rate pricing model where processing fees depend on the type (i.e., Visa, Mastercard, Discover, etc) of credit card that your customer uses.

Flat-rate pricing: a flat-rate pricing model means there is one rate for each transaction your business processes, regardless of the type of credit card your customer uses.

Which is best for your business? That depends on the volume of your transactions, the average size of your transactions, and the percentage breakdown of total sales by the credit card brand (for example, Visa is 65% of total sales, Mastercard is 25% of total sales, etc). Many of the vendors we listed above have processing-fee calculators or the ability to schedule a demo to discuss FAQs and your specific situation.

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