Tips for Using Business Credit Cards Wisely

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Last updated on August 23rd, 2023

Misusing business credit cards can cost a company significant money. Fortunately, maximizing the value of business credit cards is easy – you just need a few expert tips. Here are five tips for using your business credit cards wisely.

Expert Tips for Using Business Credit Cards Wisely

Credit cards can be a lifeline for small and midsize business (SMB) owners. From rewards to discounts, lounge access to statement credits, business credit cards provide access to capital and can help companies save money through integrated management tools. Here are five top tips for getting the most out of a business card:

Look for Introductory Offers

One of the best ways to maximize the value of a business credit card is to take advantage of an introductory offer. Credit card welcome offers range from introductory APR to no annual fee and sizeable points or cash back bonuses. As a rule, welcome bonuses for business credit cards typically include at least one of the following:

No annual fee for the first year 0% introductory APR on balance transfers 0% introductory APR on balance transfers
No fees on eligible balance transfers or cash advances Statement credits Statement credits
0% introductory APR on purchases Bonus points or miles for meeting minimum spending requirements Bonus points or miles for meeting minimum spending requirements

Before taking advantage of an introductory or welcome offer, always read the fine print and terms and conditions carefully. Also pay attention to any deadlines mentioned in promotional martials so they don’t expire before applying.

Optimize Benefits to Maximize Rewards

Business cards differ from personal credit cards in the rewards they provide. A personal cash back credit card may feature the same bonus categories as a business card equivalent, but the business version will have different rewards rates. Special discounts and incidental credits are another way business versions of credit cards differ from the consumer option. These discounts include in-flight purchases, hotel or car rental savings, or preferred pricing on select services.

Maximizing rewards means optimizing company credit cards to mirror employee spending habits. Companies that send employees on international travel should consider an airline card that is part of a codeshare alliance (like Star Alliance, Oneworld, or SkyTeam). These cards may also offer TSA Pre-Check or other airport fast-track benefits. Similarly, companies with a large salesforce may benefit from a gas card, cash back card, or other rewards card.

Pay In Full Every Month

Credit utilization is one of the largest contributors to a business’s credit score. Put simply, credit utilization refers to the percentage of the total credit used from the total credit available. Therefore, companies should aim for lower credit use to attain a better credit rating.

Here are the critical scoring factors for businesses according to Experian:

Scoring Factor Explained
Business age How long has the company been open and operating as a business?
Credit applications How many new credit line applications does the company have in the past 9 months?
Credit opened How many new lines of credit has the company opened in the past 6 months?
Collections Does the business have any accounts in collection or any liens?
Payment history Does the business have a history of paying off their loans and credit lines on time?

Paying in full has another benefit – no interest charges. Only issue (and use) business cards if you can do so without carrying a balance from month to month. Doing so can save your company significant money over the long term.

Use Employee Spending Limits

Business credit cards are just like any other type– they require responsible use to avoid financial difficulties. Fortunately, many business cards provide comprehensive account management tools and business software integrations. These business features help account managers streamline their finances, track purchases, and even assist in writing off spending as a business expense.

One of the best tools to use on a business credit card is the individual spending limit control for employee-issued cards. A business card program includes a credit limit for the company and spending limits for each cardmember, with these limits set by the account manager. Typically, credit limits start as low as $100, although that minimum may vary by issuer.

Corporate cards are a better choice for large companies, as these bespoke business cards require a minimum of 15 authorized cardholders per corporation. These accounts are also better suited to oversee a huge amount of transactions.

Avoid Fees (if Possible)

Nobody likes hidden fees, but those small charges can exponentially inflate a company’s expenses if multiple employee cards are issued. Look for a business card without hidden fees, including foreign transactions, setup, or card replacement.

Perhaps the biggest fee to avoid is an annual fee. Business cards with travel rewards typically charge an annual fee of around $95 but there are plenty of excellent cash back cards that provide excellent rewards with no annual fee.

Foreign transaction fees are another fee to avoid. A foreign transaction fee is a charge added by a credit card issuer on any transactions overseas or with a foreign merchant. These fees are typically around 3% of the transaction cost and is added to the purchaser’s credit card statement. Look for cards with no foreign transaction fees to avoid excess costs at the end of the billing period.

Featured image by mwitt1337/PixaBay

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About: Cory Santos
Cory Santos

Cory is the senior credit card editor at BestCards, specializing in everything credit card-related. He’s worked extensively with credit cards and other personal finance topics, including nearly five years at BestCards. Cory’s extensive knowledge is an essential part of the BestCards experience, helping readers to live their best financial lives with up-to-date insights and comprehensive coverage of all facets of the credit card space, including market trends, rewards guides, credit advice, and comprehensive credit card reviews.

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