Ask an Expert: What’s the Best Business Credit Card for Startups?

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This post comes from Jason Bushey, who writes about credit cards daily on Creditnet.com.

I recently received this question from a Money Talks News reader:

I own a small technical startup out West and I’m in the market for a new business credit card. Is there a particular card you recommend for small startups like mine? My credit is pretty good and I have open personal accounts in my name already. — Aziz S.

My response

Thanks for the question, Aziz. Business credit cards are beneficial for small companies like yours because they often carry lower interest rates than personal cards and competitive rewards programs that help you earn points, miles or cash for the items you plan on purchasing anyway.

The first thing to consider is whether or not you would prefer a credit or charge card. We’ve talked a little about this in the past, but for small startups I recommend sticking with a basic business credit card. That way, you can pay in installments if need be rather than having to pay the full balance each month, which charge cards require. Of course, interest will come into play if you do intend to carry a balance, which is why it’s important to consider both interest rates and introductory purchase periods.

Of the business cards available right now, the one I recommend most for startups is the SimplyCash Business Card from American Express.

First, there’s a 0 percent interest introductory period of six, nine or 12 months depending on the creditworthiness of the applicant. After that, business cardholders pay an APR of 12.24 percent, 17.24 percent or 19.24 percent, which is again based on creditworthiness. Unlike many American Express business cards, there’s no annual fee to carry this card.

The next thing I like about this card is the rewards program. This card offers bonus cash back in several different business-friendly categories, including 5 percent cash back at U.S. office supply stores. Cardholders can also earn 5 percent cash back on wireless phone service purchases directly from U.S. service providers, and 3 percent cash back at U.S. gas stations.

The only catch here is that there’s a cap of $12,000 in purchases per year on each of those three categories individually, for a maximum of $1,560 in rewards. That said, I’m not sure what kind of small startup pays $12,000 per year in wireless phone service alone, so it’s hard to imagine all of those bonus cash-back limits coming into play. Plus, cardholders still earn unlimited 1 percent cash back on all other purchases, and 1 percent in bonus categories once they’ve reached their limit.

What I like particularly about this card is that the rewards program is both simple and beneficial for cardholders. There aren’t thousands of points to track, and it makes clear which purchases are and are not eligible for bonus cash. Plus, they’re in the categories that help most any business run. That there’s no annual fee on this card is merely icing on the cake.

In conclusion

While it’s certainly not the only business card card right for small startups, the combination of the interest-free introductory period, the bonus cash, the competitive APR tiers, and the fact that there’s no annual fee work to make this the best offer currently available for business owners like Aziz.

Note: While we attempt to be completely objective when reporting on credit cards, this site may be compensated by issuers when a reader applies for a credit card through the links within credit card stories or on our credit card search page. Also note that any terms, rates or other features described in this article can change without notice. Always double-check everything with the issuer before applying for any credit card.

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