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Business Credit Cards for Startups: A Complete Guide

Business-Credit-Cards

Starting a new business is an exciting yet challenging time. As a startup founder, you have to make many important decisions that will impact the future success of your company. One of those key choices is selecting the right business credit card. Business credit cards can provide startups with flexibility, rewards, and other benefits that help stretch limited budgets further. However, not all credit cards are created equal. You need to carefully evaluate your options to find the best card for your specific business situation and goals. This comprehensive guide will walk you through everything you need to know about choosing business credit cards for startups. We’ll cover the following topics in detail:

Why Do Startups Need Business Credit Cards?

There are several compelling reasons for early-stage companies to get a dedicated business credit card, including:

Simplified Finances

Using a separate business credit card makes it easy to keep company and personal expenses organized and streamlined. All business purchases and vendor payments can be made from the same card account. This simplifies bookkeeping and accounting come tax time.

Business Spending Rewards 

Many business credit cards come with robust rewards programs on categories like office supplies, technology, advertising, and more. This allows startups to earn valuable perks and potentially cashback as they build their new ventures.

Building Business Credit 

Getting a credit card specifically in your startup’s name can help establish business credit. Having strong business credit will make it easier to qualify for loans, lines of credit, and other financing down the road.

Higher Credit Limits

Business credit cards often come with higher spending limits compared to consumer cards. This gives startups more purchasing flexibility and convenience.

What to Look For in a Startup Business Credit Card?

With so many options on the market, how do you choose the right card for your startup? Here are the most important features and factors to evaluate:

Rewards Tailored for Startups

Seek out cards that offer bonus categories on common startup expenses like digital ads, internet and phone services, computer hardware/software, office supplies, etc. The more rewards you can earn in these areas, the better.

Generous Introductory Offers 

Many cards provide special perks at sign-up, like 0% intro APR periods or large cash back bonuses after meeting initial spending requirements. These can help offset early startup costs.

No Annual Fee

Try to avoid business credit cards that charge expensive annual fees, as these can eat into slim profit margins for early-stage companies. Cards with no annual fee are ideal.

Flexible Redemption of Rewards

Look for straightforward and flexible options to redeem earned rewards. Some cards let you apply cashback towards purchases or statement credits, instead of restrictive airline mile programs.

Reporting to Business Credit Bureaus

Select a card that reports payment history to major business credit bureaus like Dun & Bradstreet. This helps build your startup’s credit profile for future borrowing needs.

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Top 5 Business Credit Cards for Startups

Based on the criteria above, here are 5 of the best business credit cards currently available for startups and new businesses:

1. Chase Ink Business Unlimited

  • No annual fee 
  • 1.5% cashback on every purchase
  • $750 signup bonus after spending $7,500 in 3 months 
  • 0% APR for first 12 months

With no annual fee, unlimited 1.5% cashback, and a hefty signup bonus, the Ink Business Unlimited is a top choice for cost-conscious startups. The 12-month 0% APR intro period is also very helpful.

2. Capital One Spark Cash Plus

  • $150 annual fee waived the first year
  • Up to 2% cashback (2% on all purchases after spending $50k annually)
  • $500 signup bonus after spending $4,500 in first 6 months
  • 5% cashback on hotels and rental cars booked via Capital One

This card offers exceptional earning potential with 2% flat-rate cash back once your startup crosses $50k in annual card spend. The $500 signup bonus and no first-year annual fee make it even more attractive. 

3. American Express Blue Business Plus

  • No annual fee  
  • 2x Membership Rewards points on all purchases up to $50,000 annually
  • 15,000 point signup bonus after spending $3,000 in first 3 months

Amex MR points are valuable for transferring to airline/hotel partners. The 2x earning rate up to $50k in purchases is easy to maximize for startups. And no annual fee is a big perk.

4. Bank of America Business Advantage Customized Cash Rewards

  • $0 intro annual fee for first year, $59 after that
  • 3% cashback category of your choice
  • $300 signup bonus after spending $3,000 in first 90 days

The customizable 3% cashback category is perfect for targeting your startup’s biggest expense item. Low intro annual fee and $300 signup bonus add appeal.

5. Wells Fargo Business Platinum

  • 0% intro APR for 9 months 
  • Up to 1.5% cashback on purchases
  • Cell phone protection when paying monthly bill with card 
  • $500 signup bonus after spending $5k in first 3 months

Wells Fargo’s intro 0% APR for 9 billing cycles lets you finance large startup purchases interest-free. Cell phone protection is a nice perk, and the $500 signup bonus helps offset expenses.

Steps to Getting Approved for a Business Credit Card

As a young startup, you may face some initial challenges getting approved for a business card with limited company history. Here are some tips to boost your approval odds:

Apply using your Social Security Number – This links the card to your personal credit record, which is typically more established than your business credit report.

Highlight your personal income – List your personal income sources (from other jobs or investments) on the application to showcase your ability to repay.

Get a secured card first – Consider going for a secured business credit card, which requires a refundable deposit. This can help build initial business credit.

List expected future revenue – Provide realistic estimates of your startup’s anticipated annual revenue. Lenders like to see growth potential. 

Apply with existing bank relationships – Banks may look more favorably on current account holders that also apply for credit cards.

Expert Tips for Maximizing Business Credit Cards

Once approved for a startup business card, be sure to implement strategies to maximize the benefits:

  • Pay off balances in full each month to avoid interest charges.
  • Set payment reminders to never miss a bill and hurt your new business credit profile.  
  • Look for opportunities to earn sign-up bonuses from additional cards as your business grows.
  • Use employee cards to keep employee spending separate from owner spending.
  • Set customized spending limits on employee cards to control costs.
  • Use built-in card management tools to track expenses by category, employee, project, etc.
  • Take advantage of any complimentary insurances, extended warranties, or other cardholder protections.
  • Contact the card issuer to request credit line increases over time as your business scales.

Alternatives to Business Credit Cards for Startups

For very early-stage startups with limited revenue and expenses, a business credit card may not make sense yet. Some alternatives to consider instead include:

  • Personal credit cards – Use your existing consumer cards temporarily for startup expenses.
  • Business charge cards – An option with no preset spending limit and backing by business assets.  
  • Prepaid debit cards – Load funds you allot for business expenses monthly to minimize overspending.
  • Business lines of credit – Unsecured lines of credit without a fixed monthly payment.
  • Business checking account credit line – Linked to business bank accounts, with variable repayment.
  • Business term loans – Fixed term loans that provide a lump sum of financing.

These more flexible options can help bootstrap a business at launch without full‐fledged business credit cards. As your startup gains traction, revisit adding a card.

Final Thoughts on the Best Credit Cards for Startups

Choosing the right business credit card is an important piece of building the financial infrastructure for your new venture. With so many options available, take the time to thoroughly evaluate cards based on your specific situation and needs. Focus on maximizing value from sign-up bonuses, cashback rewards, 0% intro APRs, and other valuable features. Avoid unnecessary annual fees whenever possible. Treat business credit card spending responsibly, and your company will be well positioned to qualify for cards with higher limits and more benefits over time. With the right starter card, you can stretch your limited startup budget further, seamlessly manage expenses, earn perks on your purchases, and lay the groundwork for major growth. Now that you know what to look for, it’s time to give your startup the business credit card it deserves!

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