Rewards Increasing on Business Credit Cards
LowCards is a Citi partner. These offers, valid when the article was written, may have expired. View our full editorial disclaimer here.
Consumer credit cards aren’t the only cards that have beefed up rewards to attract new customers. Issuers are looking to increase the number of small business credit card customers by sweetening the pot with lucrative cash and mileage offers.
The competition in the business card market heated up with the recent introduction of a line of products from Capital One.
Just like consumer cards, if you pay off your balance each month, the rewards can be very beneficial. But small business cards have higher interest rates than consumer cards. If you carry any type of balance from one month to the next, your top priority is getting a credit card with the lowest interest rate possible.
Here are some small business credit cards with generous rewards:
Capital One Spark Cash
Offers a $100 bonus once you spend $1,000 on purchases within the first three months. Earn 2% cash back on all purchases. There is no limit to the amount of cash you can earn. The $59 annual fee is waived the first year.
Capital One Spark Miles
Offers 10,000 bonus miles once you spend $1,000 on purchases within the first three months. Earn two miles for every dollar spent on purchases. There is no limit to the number of miles you can earn. The $59 annual fee is waived the first year.
New Ink Cash Business from Chase
Offers 15,000 bonus points for your first purchase which is worth $150. Earn an additional 10,000 bonus points or $100 when you spend $5,000 or more on your card in the first 3 months. Earn 5% cash back at office supply, wireless, cable and landline services, and 2% cash back at restaurants and gas stations. Earn unlimited 1% cash back on all all other business purchases. 0% APR for the first six months. No annual fee.
Ink Classic Business from Chase
Offers 15,000 bonus points for your first purchase, and an additional 10,000 bonus points when you spend $5,000 within your first 3 months. Earn 1 point per $1 spent on all purchases. Earn 2 points for every $1 spent on the first $25,000 worth of gasoline and lodging. Plus, you’ll earn five points per $1 on the first $25,000 spent annually on office supplies, wireless services, landline communication and cable services. 0% APR for the first six months. No annual fee.
The Plum Card from American Express
You can earn a 1.5% discount by paying your full balance within 10 days of your statement closing date. The $185 annual fee is waived the first year.
CitiBusiness World MasterCard
Offers 10,000 Thank You bonus points after you make $300 within the first three months of card membership. Earn three ThankYou points for every $1 spent at certain office supply merchants and on professional services. Earn one ThankYou point for every $1 spent on other purchases. 0% APR for the first six months. No annual fee.
Applying for a Small Business Card
Just like personal credit cards, issuers give the best terms to businesses that have an excellent credit history and have been operating for several years. Accessing credit for your small business depends on a number of factors: your personal credit history, how long you’ve been in business, cash flow and credit history for the business, and other available credit lines. Card issuers want to extend credit to businesses that show a track record of timely payment to suppliers and positive cash flow. Typically, the best business card offers are extended to companies that have been in business at least two years. A business owner’s personal credit will usually be assessed during the credit process when applying for a business card.
Concerns on Small Business Cards
Business credit cards function like consumer cards, but lawmakers did not include business cards in the CARD Act regulations. Hence, business cards contain many of the punitive terms that are no longer legal for consumer cards. Issuers may still change the card terms at any time without notice, including raising the interest rates on existing balances. Issuers may also apply a penalty rate immediately without providing notice of a violation, and this rate can last indefinitely. Issuers may direct payments to the lowest interest rate first, maximizing interest payments. Some issuers, like Bank of America and Capital One, voluntarily apply some of these consumer card protections on their business cards.
Business owners need to study the credit terms to see how the issuer will handle the card debt if the small business fails. Many cards have a provision called the “Individual and Company Liability” clause stating that the individual who applied for the card and the business are jointly responsible for the card debt. The applicant thus becomes personally liable for all charges on the card. If the business has trouble paying off the card, it will pull down the cardholder’s personal credit history. Some card issuers don’t use this provision in their credit terms. You must have well established credit history to avoid such a clause.