If you’re a startup founder or entrepreneur, you know how important it is to have access to capital and cash flow to grow your business. One of the ways you can do that is by using a business credit card that offers you rewards, perks, and flexibility for your spending needs. But with so many options out there, how do you choose the best business credit card for your startup?
In this blog post, we’ll compare some of the most popular and beneficial business credit cards for startups in 2023, based on factors such as personal guarantee, spending limit, annual fee, credit history, and rewards categories. We’ll also share some tips on how to use your business credit card wisely and responsibly, and how to partner with us for more financial solutions for your startup.
What to Look for in a Business Credit Card for Startups
Before we dive into the specific cards, let’s go over some of the criteria that you should consider when choosing a business credit card for your startup.
1. Personal guarantee
A personal guarantee is a legal agreement that makes you personally liable for the debt on your business credit card if your business fails to pay it back. Some business credit cards require a personal guarantee, while others don’t. If you want to avoid putting your personal assets at risk, you might prefer a card that doesn’t require a personal guarantee. However, these cards usually have stricter eligibility requirements and lower spending limits than cards that do require a personal guarantee.
2. Spending limit
A spending limit is the maximum amount of money that you can charge on your business credit card. Some cards have preset spending limits based on your credit history and income, while others have flexible spending limits that adjust based on your payment history and spending patterns. If you need a lot of cash flow for your startup expenses, you might prefer a card with a high or flexible spending limit. However, these cards may also have higher interest rates and fees than cards with lower spending limits.
3. Annual fee
An annual fee is a charge that you have to pay every year to keep your business credit card account open. Some cards have no annual fee, while others have annual fees ranging from $95 to $695 or more. If you want to save money on fees, you might prefer a card with no annual fee. However, these cards may also have lower rewards rates and fewer perks than cards with annual fees.
4. Credit history
Your credit history is a record of how you’ve managed your debt obligations in the past. It affects your credit score, which is a number that lenders use to assess your creditworthiness and risk level. Some business credit cards require good or excellent credit scores (typically 670 or higher) to qualify, while others are more lenient and accept fair or average credit scores (typically 580 to 669) or even no credit history at all. If you have a low or limited credit history, you might prefer a card that caters to your situation. However, these cards may also have higher interest rates and fewer benefits than cards that require good or excellent credit.
5. Rewards categories
Rewards categories are the types of purchases that earn you points, miles, or cash back on your business credit card. Some cards offer flat-rate rewards on all purchases, while others offer bonus rewards on specific categories such as travel, gas, office supplies, advertising, or dining. If you want to maximize your rewards potential, you might prefer a card that matches your spending habits and offers bonus rewards on the categories that you spend the most on. However, these cards may also have higher annual fees and more restrictions than cards that offer flat-rate rewards.
The Best Business Credit Cards for Startups in 2023
Now that we’ve covered the basics of what to look for in a business credit card for startups, let’s take a look at some of the best options available in 2023.
1. Brex 30 Card
The Brex 30 Card is one of the few business credit cards that doesn’t require a personal guarantee or a credit check. Instead, it bases its approval and spending limit on your business’s cash balance and revenue. This makes it ideal for startups that have professional funding and want to avoid personal liability. The Brex 30 Card also offers generous rewards on various categories such as travel, rideshare, restaurants, software, and all other purchases. You can redeem your points for travel bookings through Brex Travel or transfer them to airline partners such as JetBlue and Singapore Airlines. The Brex 30 Card has no annual fee or foreign transaction fee but it does charge a $5 monthly fee per user if you have more than five users on your account. It also has a 30-day payment cycle instead of a monthly billing cycle which means you have to pay off your balance in full every month.
2. Capital One Spark Cash Plus
The Capital One Spark Cash Plus is one of the best business credit cards for startups that have heavy spending and want to earn unlimited cash back on all purchases. It offers 2% cash back on every purchase with no caps or categories to worry about. The Capital One Spark Cash Plus also offers a generous welcome bonus of $500 cash back after spending $5,000 in the first three months and another $1,500 cash back after spending $50,000 in the first six months. That’s a total of $2,000 cash back in bonuses alone. The Capital One Spark Cash Plus has an annual fee of $150 which is waived for the first year but it also comes with perks such as free employee cards, purchase protection, extended warranty protection, and fraud protection.
3. Capital One Spark Classic for Business
The Capital One Spark Classic for Business is one of the best business credit cards for startups that have fair or average credit scores and want to build their business credit history. It doesn’t require a minimum personal credit score or income to qualify but it does require a personal guarantee. The Capital One Spark Classic for Business offers 1% cash back on every purchase with no caps or categories to worry about. You can redeem your cash back anytime for any amount as a statement credit or check. The Capital One Spark Classic for Business has no annual fee or foreign transaction fee but it does charge a high variable APR of 26.99% which means you should pay off your balance in full every month to avoid interest charges.
4. The Business Platinum Card by American Express
The Business Platinum Card by American Express is one of the best business credit cards for startups that travel frequently and want to enjoy premium benefits and perks. It offers 5x points on flights and prepaid hotels booked through Amex Travel and 1.5x points on purchases of $5,000 or more (up to 1 million additional points per year). The Business Platinum Card by American Express also offers a huge welcome bonus of 100,000 points after spending $15,000 in the first three months plus another 50% more points after spending an additional $15,000 in the same period (up to 150k points total). You can redeem your points for travel bookings through Amex Travel or transfer them to airline and hotel partners such as Delta and Marriott. The Business Platinum Card by American Express has an annual fee of $595 but it also comes with perks such as up to $200 in airline fee credits per year, up to $200 in Dell credits per year, up to $179 in CLEAR credits per year, up to $100 in Global Entry/TSA PreCheck credits every four years, access to over 1,300 airport lounges worldwide, complimentary elite status with Hilton and Marriott, and more.
5. U.S. Bank Business Triple Cash Rewards World Elite Mastercard
The U.S. Bank Business Triple Cash Rewards World Elite Mastercard is one of the best business credit cards for startups that want to enjoy a long interest-free period and balance transfers. It offers an introductory 0% APR on purchases and balance transfers for the first 15 billing cycles then a variable APR of 16.99% – 26.99% after that. The U.S. Bank Business Triple Cash Rewards World Elite Mastercard also offers 3% cash back on eligible gas station purchases, cell phone services, office supply stores, and restaurants, and 1% cash back on all other purchases. You can redeem your cash back anytime as a statement credit, deposit into a U.S. Bank checking or savings account, or U.S. Bank Rewards Card. The U.S. Bank Business Triple Cash Rewards World Elite Mastercard has no annual fee but it does charge a balance transfer fee of either $5 or 3% of the amount transferred, whichever is greater, and a foreign transaction fee of up to 3% of each transaction in U.S. dollars.
How to Use Your Business Credit Card Wisely
A business credit card can be a great tool for your startup if you use it wisely and responsibly. Here are some tips on how to do that:
1. Pay off your balance in full every month
This will help you avoid paying interest charges and fees, build your credit score, and maintain a good relationship with your card issuer. If you can’t pay off your balance in full, try to pay more than the minimum amount due and pay off your highest-interest debt first.
2. Track your expenses and budget
A business credit card can help you track your expenses and budget more easily by providing you with monthly statements, online tools, and mobile apps. You can also categorize your expenses by type, date, or vendor, and export your data to accounting software or spreadsheets. This will help you monitor your cash flow, manage your taxes, and plan for the future.
3. Use your rewards and perks
A business credit card can offer you rewards and perks that can save you money and enhance your travel experience. For example, you can earn cash back, points, or miles on your purchases and redeem them for statement credits, gift cards, travel bookings, or transfers to partner programs. You can also enjoy benefits such as travel insurance, car rental insurance, purchase protection, extended warranty protection, airport lounge access, hotel discounts, and more. Make sure you understand how to use your rewards and perks and take advantage of them whenever possible.
4. Protect your card and account
A business credit card can expose you to fraud and identity theft if you don’t protect your card and account properly. You should always keep your card in a safe place, sign the back of it, and memorize your PIN. You should also review your statements regularly, report any suspicious or unauthorized charges immediately, and update your contact information with your card issuer. You should also use strong passwords, encryption software, and antivirus software to protect your online account and transactions.
How to Partner with Us for More Financial Solutions
A business credit card is not the only financial solution that we can offer you for your startup. We are a trusted partner that can help you with other aspects of your business such as:
1. Business loans
We can provide you with fast and flexible business loans that can help you cover your startup costs, working capital needs, equipment purchases, inventory replenishment, expansion plans, and more. We offer competitive interest rates, flexible repayment terms, and minimal paperwork. You can apply online in minutes and get approved in hours.
2. Business checking accounts
We can offer you a business checking account that can help you manage your daily transactions, deposits, withdrawals, transfers, and payments. We offer low fees, high limits, online banking, mobile banking, bill pay, remote deposit capture, overdraft protection, and more. You can also link your business checking account to your business credit card for easy access and convenience.
3. Business savings accounts
We can offer you a business savings account that can help you save money for your short-term or long-term goals. We offer high interest rates, no monthly fees, online banking, mobile banking, and more. You can also link your business savings account to your business credit card for easy transfers and withdrawals.
A business credit card can be a valuable tool for your startup if you use it wisely and responsibly. It can help you access capital, earn rewards, enjoy perks, track expenses, build credit, and more.
However, you should also be aware of the potential pitfalls of using a business credit card such as interest charges, fees, debt, fraud, and identity theft. You should always pay off your balance in full every month, track your spending and budget, use your rewards and perks, and protect your card and account.
If you need more financial solutions for your startup, we are here to help. We are a trusted partner that can provide you with business loans, business checking accounts, business savings accounts, and more. We are committed to helping you grow your business and achieve your goals.