One of the biggest problems with starting your own business is that you have to fork out a lot of money, not just when financing it but also when purchasing items you need and covering other expenses that crop up.
To help you along and prevent your startup from never taking off, you should get your hands on the best business credit cards for startups 2020.
Why do you need a business credit card?
You can get extra financing when you need it on the go, but a business credit card is also great for purchase emergencies and to make use of its various perks and rewards. These days, the best business credit cards are all about making you thrive in your startup by focusing on what you really need as a business owner.
Let’s dive into a detailed review of all five business cards, looking at their benefits, drawbacks, extra features, and more so you can choose the one to suit your business needs the best.
Best Business Credit Cards For Startups – Reviews And Recommendations For 2020
Winner: Blue Business Plus Credit Card from American Express
Financing is one of the biggest obstacles that startups encounter, so you want to know that you have a way around them. If you need a bit more financing for your business, the Blue Business Plus Credit Card from American Express is one to consider. It’s been specially designed for freelancers or small business owners who are just starting out.
- 2x membership points for first $50,000 spent annually
- Credit cards (with limits you can set) for employees
- Excellent customer service
- You never know when you’ll need to surpass your credit limit, and American Express has thought about that. This is why this card is great for startup owners: it provides you with more buying power because you can make purchases for your business that are higher than your spending limit without having to deal with a penalty.
- You’ll get excellent rewards. As a member, you’ll receive 2x membership reward points for making purchases in any category during the first $50,000 that you spend every year. Then, you’ll be able to earn unlimited 1x points.
- You’ll be able to make use of the 0% introductory Annual Percentage Rate (APR) for all your purchases for the first year after you open the account.
- You don’t have to worry about annual fees so you can just enjoy the rewards you get for your business purchases.
- If you want to get credit cards for your employees, this is the one to purchase. There are no fees for these credit cards and the bonus is that you’ll be able to set credit limits for your employees as well as track all their spending.
- There’s a catch when it comes to how you can surpass your credit limit – you’ll have to pay the extra amount you’ve spent in full (as part of your monthly minimum payment) within that same month. So that’s something to bear in mind before you swipe on expensive items for your business!
- If you want to use points that you’ve earned with this card for travel, you’ll have to deal through American Express directly to book travel that’s funded by your rewards.
- This card isn’t suitable for people who own larger businesses because you’ll need more cash at hand to cover your greater number of expenses.
- American Express has excellent customer service, so you’ll have someone to talk to if you encounter a problem. They have a Global Assist Hotline.
- This credit card has everything covered: it gives you account alerts and online statements, as well as a year-end summary. This really helps you to better organize your business’s finances.
- The mobile app that you can use to check balances and do other tasks is highly rated as being one of the best in the industry.
If you own your own business or you’re starting a freelance career, this best business start up credit card from American Express is a solid product to help make your banking easier and ensure you can get your company off the ground.
Runner-Up: American Express Business Gold Card
If you’re looking for a business credit card that will give you lots of rewards, as well as some other perks for your business, this one’s for you.
- 4x points for most-used purchase categories
- Fast application and approval
- Pay for purchases over time
- This Gold card has good rewards: you’ll earn 4x points for two categories in which you spend the most every month. This is great because if you’ve been spending a lot of money in certain categories, you can easily accumulate many points.
- It has a nice offer you can take advantage of: by spending $5,000 on business purchases within the first three months of opening your account, you’ll earn 35,000 membership rewards points. You know that expenses and purchases can easily add up, so this is an offer you can definitely make good use of as a startup owner.
- You don’t have to experience any stress when applying for this card. The process occurs online and takes mere minutes for you to be approved, which makes it one of the best small business credit cards for new businesses.
- What’s really nice about this credit card is that you can make use of the feature of paying over time for your purchases, as long as they’re $100 or more.
- You don’t have to worry about setting spending limits, as this card ensures you’ll have buying power when you need it.
- You won’t have to deal with any foreign transaction fees, which is a big bonus if you do a lot of business abroad.
- Despite its lack of foreign transaction fees, this card comes with a high annual fee of $295.
- The reward system that’s in place – 4x points – is limited to the first $150,000 you spend annually.
- If you don’t choose the option to pay over time with interest for your large business purchases, you’ll automatically be forced to pay your balance every month in full, which can be tough for new business owners.
- A category that’s listed for spending and earning rewards is shipping. If you’re starting a business on eBay, Amazon, or similar, this card will enable you to accumulate points very quickly.
- If you want to use your membership rewards to book a flight with American Express Travel, you’ll receive 25 percent of your rewards back.
If you want lots of rewards, you do a lot of business overseas, and/or you need a card that enables you to pay off your purchases, the American Express Gold Business credit card is worth considering, as long as you can overlook its hefty annual fee.
Alternative 1: Brex Corporate Card
If you’re starting a tech or other company, you’ll love the Brex Corporate Card. In fact, it’s been especially designed for entrepreneurs because of its unique features. Let’s take a look at its benefits and what you need to know before signing up.
- No credit score required during application
- Compatible with major accounting software
- Excellent partner rewards
- One of the biggest benefits of applying for this credit card is that you don’t have to worry about personal guarantees and no credit history needs to be taken into consideration. To get approved for the card, Brex will take other factors into account, such as your investors and spending patterns. These are what will determine your limit.
- Getting your card is quick and fuss-free: you’ll receive a virtual card within minutes of applying online and you can expect your physical card within three to five business days.
- This card has rewards that are tailored to startup owners, such as the chance to earn 2x points on software subscriptions and 4x points on travel.
- There are no annual fees to have to deal with.
- The card is a charge card so you don’t have to pay interest as your balance needs to be paid in full at the end of every pay period.
- If you want to use the Brex Corporate Card, you’ll have to prove that your business has a minimum balance of $50,000 and you’ll do this by linking your corporate bank account. This amount might seem steep if you’re just starting out.
- Although you might breathe a sigh of relief knowing that you don’t have to have your credit history scrutinized when getting approval for the card, if you don’t have much to show in terms of your business expenses and investors because you’re just starting out, you might feel that this card isn’t suitable for you. It might be better to sign up for it when your business is off the ground.
- Brex cards are part of the Mastercard network so they can be used in more than 200 countries.
- There are no foreign transaction fees.
- One of the best perks of using this card if you’ve got a startup is that it will help you better manage your money by providing you with various tools. These include transferring transaction data into your accounting software, thanks to how Brex is compatible with Xero, NetSuite, Expensify, and QuickBooks. You can also give your bookkeeper access to your account.
- When you sign up, you’ll receive five free cards.
- Not only will you earn membership points when using your Brex card, but you’ll also get partner rewards that are worth over $50,000. These are made up of $5,000 credit over two years for Amazon Web Services, 20 percent discounts on annual Zoom subscriptions, and up to $150 in credits to be used on Google Ads.
Brex is a fantastic card to consider for your business, especially if you don’t have credit history or a poor one, as you won’t be subject to credit checks. However, having a minimum business balance of $50,000 is probably a cause for some hesitation.
Alternative 2: American Express Business Platinum Card
This card is the best one to choose if you want to earn more travel perks! So, if you’re going to be on the move a lot for your business, it’s definitely a good one to consider. But here’s everything you need to know about it.
- 5x points for hotels and airfare
- Earn high rewards in first 3 months
- Best for travellers
- The American Express Business Platinum Card’s reward system is great. You can earn 75,000 after spending $15,000 on qualifying purchases within the first 12 weeks of opening your account.
- If you own this card, you’ll be automatically eligible for gold status in Marriott Bonvoy and Hilton Honors loyalty programs.
- You’ll get 5x points for your prepaid hotels and airfare that’s booked via Amex Travel.
- This card has a hefty annual fee of $595, which isn’t compatible with many people’s budgets.
- If you fail to pay your balance every month in full, you’ll be charged 2.99 percent of any past due Pay in Full amount or $39 – whichever amount is larger. That said, you’ll have to deal with late payment fees with many credit cards on the market.
- If you don’t really travel much for your business, you will probably lose out on some big rewards. Bear in mind that the card offers only one point for every $1 on most purchases.
- Back to those travel perks! It’s worth bearing in mind that this card offers many other travel benefits, such as giving you instant access to airport lounges if you’re a cardholder. These include Delta Sky Club when flying Delta and Priority Pass.
- The card also offers $200 in annual airline fee credits. This is definitely a card that’s focused on making your travels much more comfortable.
If you travel a lot, the Platinum Business Card by American Express will be a valuable card to own – as long as you don’t mind paying the expensive annual fee, that is. On the other hand, if you’re not going to be making the most of its travel perks and rewards, it’s a good idea to consider a different credit card on our list of best credit cards for startups reviews.
Alternative 3: American Express Blue Business Cash Card
If you’re reeling from the high annual fee of some other business credit cards on the market, you’ll love this start up business credit card. The American Express Blue Business Cash Card has no annual fees. It’s a must for anyone who wants to receive cash back instead of rewards. Let’s check out its features that make it perfect for startups.
- Above-limit spending
- Cash-back rewards
- Expense management tools
- By owning this card, you’ll get a two-percent cash back on your first $50,000 you spend on purchases every year. Then, you’ll receive a one-percent cash back for every eligible purchase after you’ve spent $50,000 per calendar year.
- Although approval depends on your payment history, credit history, and financial resources, you could be approved to make purchases that go above your limit. This can be highly beneficial when you’re starting and setting up your own business. Your limit will also change according to your credit record, payment history, and usage.
- If you love receiving cash back, you’ll love that using this card could enable you to receive up to $300 back on eligible purchases that you’ve made within three months of signing up to the card.
- The card has 0% intro APR on the purchases you make in the first year.
- When the 12 months have passed, you’ll be assigned an APR that depends on your creditworthiness.
- You will have to pay a 2.7 percent foreign transaction fee. This is a bit higher than the average foreign transaction fee provided by other credit cards.
- The opportunity of getting rewards after spending $50,000 might seem impossible for you to achieve. On the other hand, if you’re going to spend even more than this amount, it might be better to choose a credit card that doesn’t have a spending limit, even if it does have an annual fee.
- You can make use of extra features with this card, such as free cards for your employees, car rental damage and loss insurance, as well as expense management tools to help you stay within your budget.
If you want to receive cash back instead of rewards, this credit card is a good choice for you. The same applies if you have an excellent credit score because then it can help you make the most of the card’s perks. After all, your business credit card should always work for you!
Business Credit Cards For Startups FAQ
If you’re just starting out as a business owner, there are some important things to know when it comes to credit cards.
Let’s check out some of the most common questions you might have.
How do I get my first business credit card?
If you’re in the market for your first business credit card, there are some important things you need to know so that you’ll be approved for it.
- You’ll need to know your credit score. While there are some business credit cards that don’t factor in your credit score or history (such as the Brex Corporate Card we’ve featured in our buying guide), many other cards will consider these. Therefore, it’s essential to make sure that you know your credit score and can improve it if necessary.
- You’ll need to do your homework. There are different features that different business credit cards will have, so you have to ensure you find the one that gives you what you need the most. While having a business credit card that’s focused on travel perks might sound exciting, it’s not going to be value for money if you never travel. Luckily, we’ve done your homework for you by providing you with some of the top business credit cards that are available in this buying guide.
- You should then apply for the card.Once you’ve figured out the best card for your business, you can apply to get it. Some cards enable you to apply without having a business income, so check if that’s the case before going ahead. Many cards make online applications really easy and you might even get approval within minutes, as is the case for the American Express Business Gold Card that we featured in our reviews.
- Make sure you have all the information you need. During the application process, you’ll have to provide some important information pertaining to your business. This will probably include the following:
- Your tax ID number. This is essential if you have a tax ID that’s been assigned to your business, but if you don’t have one you can mention your Social Security number instead.
- Your business name and legal structure. Your business’s legal structure refers to how your business is organized, such as if you’re a sole proprietorship or LLC.
- Your phone number and address. These should be the address and number you use for your business but they can be your personal details, such as if you’re working as a freelancer.
- The date when your business was established.
- Your business’s total revenue. If you don’t have any revenue yet, you can mention that in your application.
- Your business industry. Don’t confuse this with your business structure. This is basically the industry you’re working in, such as the transportation or technology sector.
- Information about shareholders. If other people own 25 percent or more of your business, you will have to provide their personal details, such as their Social Security numbers.
- Personal guarantees. Bear in mind that you might need to personally guarantee debt you accumulate on your credit card, but this depends on the type of card you want. For example, the Brex Corporate Card doesn’t require this.
Once you have submitted your credit card application online, you might receive instant approval or you’ll see that your application status is marked as “pending.”
If you find that your application status doesn’t change, you can contact the credit card company to find out if it’s still being reviewed.
Once you’re approved, you’ll receive your card. Virtual cards, such as those provided by Brex, will be sent to you immediately, while physical cards should reach you within a few business days.
What is the easiest business credit card to get?
There are different definitions of what it means to purchase an “easy” card.
For some people, an easy credit card is one that’s easy to sign up for, such as the Brex Corporate Card, which doesn’t require you to have a solid credit history in order to be approved for it.
You can apply and get approved for the card online within minutes, which makes the whole process a breeze.
By not having to worry about your credit score or credit history, this is probably one of the easiest business credit cards to get.
For other people, an easy credit card is one that enables you to simplify its reward system by having cash-back benefits.
In this case, a card like the American Express Blue Business Cash Card makes using a business credit card easy and convenient.
It can also fit into your lifestyle, such as if your rewards points usually go to waste.
This card can also be considered to be an easy one because it helps to simplify your finances.
This is because when you sign up for the card you’ll receive many expense management tools to help you stay on top of your business budget.
How do I build credit for my LLC?
If you want to start building credit for your LLC, it’s a good idea because it will enable you to take advantage of more access to business credit products that you need for your company.
Here’s how to do it.
- You’ll need to form your LLC and ensure that it’s separate from your personal identity, then you need to get a federal employer identification number, which is a free IRS service.
- Open a business bank account that’s in the name of your business.
- You should also have a dedicated phone line and get a D-U-N-S number. This will identify the physical location of your company. This is important because credit bureaus will use this number to check your business payments and other activities.
- Know your credit report. Credit bureaus don’t have to legally give you access to your business credit reports, however the major ones will give you a copy of your report for a fee.
- Get a business credit card. Opening a business credit card is a good way to start building credit for your LLC. This will ensure that your payments are reported to credit bureaus, so it’ll help you build your business credit profile. You’ll obviously also be able to make use of all the rewards and benefits offered by the credit card that you’re interested in purchasing that will enhance your business.
- You should also open accounts with vendors. These will further help you to build your credit profile. If you already have these accounts, you should check that the vendors report the payments to bureaus, as Credit Karma reports.
- Once you have accounts with vendors, always strive to pay your accounts earlier than their deadline dates. This will not only ensure you get a good score when it comes to paying vendors but it will help you achieve a high Dun & Bradstreet Paydex score, which is a commonly used business credit score.
- To ensure that your credit score remains good, you should regularly check your score, at least a few times per year. This will also alert you to any fraud or errors that could hamper your chances of borrowing funds.
When it comes to choosing the best business credit cards for startups, it’s important to compare the different cards’ fees.
There are various fees you have to take into account, so let’s take a look at them.
Does the card charge an annual fee? As we’ve seen in our credit card reviews,this can vary quite a bit from one card to another. Some cards charge no fees while others can charge hundreds of dollars per year.
On average, you’re looking at interest rates for business cards that are about 15 to 23 percent. These are a bit lower than the rates you’d have to pay for consumer cards, as U.S. News reports.
Late payment penalties
Being charged a fee for a late payment is common, and you can expect to pay approximately $35 for it.
Foreign transaction fees
If you use your business credit card when you’re abroad, you could be charged a fee.
The good news is that 41 percent of business credit cards don’t charge transaction fees, as U.S. News reports, but the ones that do will usually charge less than 2.7 percent of the transaction.
What type of bonuses can you get?
As we’ve seen in this buying guide of the best business credit cards for startups, there are many bonuses you can enjoy with your business credit card.
Generally, these cards offer more bonuses and rewards than personal credit cards for the simple reason that businesses usually spend more money than individuals.
With some business credit cards, the bonuses start rolling out from when you apply for the card as a welcome offer.
You can also find cards that reward you well for using the card on certain purchases within the first three months of owning it.
An example is the American Express Business Platinum card with which you can earn 75,000 points after spending $15,000 on qualifying purchases within the first three months of opening your account.
To encourage you to spend money on your business, it’s common for business credit cards to reward you with points for various purchases.
For example, the American Express Blue Business Plus Credit Card gives you two membership reward points for purchases during the first $50,000 you spend annually.
The rewards you receive can be redeemed in various ways, such as in gift cards, merchandise, or statement credits.
If you’re looking for specific rewards and bonuses, such as when it comes to travel, you’ll do well to choose a card such as American Express Business Platinum Card that offers many traveling discounts and perks, so it’s perfect if you do a lot of your business abroad.
You can even find business credit cards that give you the type of bonuses you want, such as if you prefer receiving cash back instead of reward points. An example of such a card is American Express Blue Business Cash Card.
If you’re starting a business or working as a freelancer, there are business credit cards specifically for you.
But, if you feel overwhelmed at the thought of signing up to a business credit card, we’ve taken the stress out of the experience by giving you the best credit cards for startups.
They all offer you ways for you to run your business in the best way and provide you with rewards that will make your business better.
Whether you’re looking for cash back or travel rewards, there’s something for everyone.
We’ve also answered some important questions about business credit cards, such as how to apply for a business credit card and what you need to know about improving your credit score to put you in a better position when you need financing.