4 Ways to Get the Most Out of Your Business Credit Card

Updated on January 17th, 2022
cash to credit card flow

A business credit card offers some clear advantages for a small business owner: Access to additional capital, reward and travel perks, potential 0% interest on purchases, sign-up bonuses … the list goes on. And in some cases, it can even replace traditional business financing as a better, more affordable option to cover business expenses. But in order to get the most from a business credit card, you have to use it effectively and avoid costly mistakes.

If you’ve decided a business credit card is for you, it’s time to make that little piece of plastic work overtime in your favor. Maybe you’ve already secured a business card or you’re looking for the very best one. Either way, here are four ways to make sure you get the most out of that card.

If you’re shopping around for cards, it’s important to find the card that works best for your specific business. Though it may be tempting to sign up for the card with the biggest sign-up bonus, each card is orchestrated differently in order to serve different types of businesses. It can be overwhelming, but it’s important that you do your homework before signing up for a card at random.

Know the Ropes

From the moment you sign up, it’s important to know the ins-and-outs of your card. Blindly using it could cause damage to your credit score, put yourself into a pit of debt, and needlessly put stress on yourself and your business down the road.

If you’ve signed up for a card that offers a 0% introductory rate, make sure you know when the offer expires. A 0% APR is a great way to save money and get low-cost capital, but if you forget to pay your balance off before the end of the introductory period, you could owe hefty interest.

It’s also a good idea to learn the details of your card’s perks. Many business credit card options offer points or cash-back deals, but they all work a little differently.

For example, the Chase Ink Business Preferred offers three points per dollar spent on travel, shipping, internet, cable, and social media advertising, which can be a great choice if you have a lot of spend in those categories. The best credit card customers are those who pay attention to their cards’ perks and maximize the benefits.

Stay on Top of Payments

Chances are, you’re a responsible business owner who stays on top of finances. However, rough patches happen—and it’s important to know the repercussions if you fail to pay back your debt. Though business credit cards sometimes affect your business credit score, many are also tied to your personal credit score. This means that failure to pay your bills hurts not only your company but your personal finances as well.

If you can afford to do so, it’s a good idea to pay off your credit card debt monthly. This allows you to avoid paying interest, saving money in the end. If you can’t afford to pay off the balance in full, it’s a good idea to keep your credit card balance less than 30% of your spending limit.

Using a business credit card irresponsibly can create unnecessary headaches down the road. By not setting limits, you could find yourself falling into a vicious cycle of debt. You may not be able to keep up with these, and you may end up ballooning over time.

Deduct Interest on Taxes

Credit card repayments can stack up, and sometimes you need to carry a balance. If you do end up paying interest, some of that interest may be deductible if the purchase was for business expenses. Additionally, your annual fees and other charges are also deductible. Though the best way to use a credit card is never to pay unnecessary fees. Sometimes they happen and when they do it’s a good idea to claim them on your tax return.

Maximize Your Benefits

It may be a good idea to start your process by making a list of all your business expenses. Afterward, decide which expenses will work best on a credit card. Let’s say you find that there are a certain number of expenses that fall under the same category. It might be a good idea to find a card that offers the biggest perks for those categories.

If you find that your small business requires you to travel a lot, the Chase Ink Business Preferred℠ is a great option.  Currently, there’s a bonus of 80,000 points—which translates to $800. You can get this if you spend $5,000 in the first 3 months. To qualify, you’ll need a minimum credit score of 700, and there’s an annual fee of $95. However, the travel perks are well worth the fee.  

For those in the market for 0% APR, the The Blue Business℠ Plus from American Express is another great choice. You’ll get 0% APR for the first 15 months, one of the longest introductory periods on the market. You also get 2 points on every dollar you spend for your first $50,000 annually. To qualify, you’ll need a minimum credit score of 660.

All of these options require a relatively high credit score—which may be discouraging if you have below-average credit. Luckily, there are still plenty of options. Prepaid cards like the Bento for Business, or a card with a security deposit like the Capital One® Secured Mastercard® are great options to help build credit.

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As a small business owner, you’ve already got enough to worry about. By taking steps to thoroughly understand the terms of your credit card, using it responsibly, and maximizing your rewards you’ll find just how useful it can be.

Meredith Wood

Meredith Wood

Meredith Wood is the Head of Content and Editor-in-Chief at Fundera, an online marketplace for small business loans. She helps people navigate the small business loans world.

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