Credit cards allow company owners to easily keep track of and disburse funds for both predictable and unforeseen costs. Business owners use these cards for routine monthly expenditures and recurring payments like rent and utilities. They are also used by certain companies to cover the cost of business trips and the acquisition of required supplies and materials. Though it’s ideal to pay these bills in full every month, many small company owners find that charging them to a credit card and then paying the entire balance each month simplifies their cash flow management.
Businesses can improve their access to capital by establishing and expanding their commercial credit profiles through the judicious use of credit cards. Many credit cards geared toward small businesses provide incentives like cash back and/or miles that may be put toward operational costs. If the bonuses are very generous, it may be in your best interest to put as much of your spending as possible on the cards.
Beginning the Process of Small Business Benefits
In most cases, a good credit score is required for your company in order to get approved for a corporate credit card with a large spending limit and valuable benefits. You may apply for one of these cards without relying on your personal credit history by providing your business’s EIN, articles of incorporation or partnership, and financial documents. In the absence of a credit history for the firm itself, lenders will look to the personal credit of the company’s executives and owners.
Once the review process is through, progress toward those advantages can be made. Creditworthy businesses or their owners may be eligible for a card that offers bonuses like increased cash back or points on certain types of expenditures, or even a zero-interest introductory period.
The 2020 Budget for Small Businesses
Many small companies’ typical purchasing habits, including the usage of company credit cards, have been disrupted by the 2020 COVID-19 coronavirus pandemic. In order to keep their businesses running and pay their employees, many business owners are turning to credit cards as a source of emergency funds.
One strategy for small businesses to weather the economic storm is to use a rewards-oriented business credit card for routine expenses and a consumer credit card with a low or zero APR (possible with a new card’s introductory offer) for investments critical to the company’s survival. This allows you to make payments with minimal or no interest for a significantly longer period of time. Consider some of the top corporate credit cards for small businesses in 2020 as you begin formulating a strategy.
The Best Credit Card for Rewards
To help small businesses get off the ground, Capital One offers the Spark Cash for Business credit card. In the first three months after creating an account, Capital One will reward your firm with a $500 incentive if you charge $4,500 to your business credit card. A further perk is a 2% cashback payout that may be cashed out whenever you choose. The $95 annual cost is reasonable for a business credit card, especially considering that it is free for the first year as a promotional offer.
The Best Credit Card for Travel Rewards
Chase’s Ink Business Preferred credit card, one of the newest on the market, comes with significant benefits for businesses of any size. If the company spends $15,000 in the first three months after creating the account, it will receive 100,000 bonus points. The fact that the bonus points can be utilized for any kind of trip is a big plus for the business owner if its personnel are frequently on the road. There is a $95 yearly charge on this card as well.
The Best Credit Card for Long-Term Payments
Credit limits on the American Express Blue Business Cash card are flexible, allowing business owners to make larger purchases as needed. There is no yearly fee for this card, and cardholders earn 2% cash back on the first $50,000 in purchases and 1% on everything thereafter. The profits of a company are deposited into the bank accounts of its proprietors. Also, the American Express welcome bonus for new members has been extended through August 31, 2020, because of the global coronavirus epidemic.
The Best Costco Credit Card
If your company makes frequent purchases from Costco, you may want to consider opening a Costco Anywhere Visa Business Card account. This card provides advantageous benefits for businesses, including four percent cash back on gasoline purchases up to seven thousand dollars annually (one percent after that), three percent cash back on dining and travel costs, two percent cash back on all Costco purchases, and one percent cash back on everything else. There is no yearly charge, and the 15% APR is low compared to other credit cards.
