For business owners just getting their companies off the ground, a startup business credit card is a great alternative to business loans.
If you can pay your bills on time, you’re looking at excellent rewards and hefty signup bonuses. And if you need financing, these credit cards can offer flexible loan amounts and a 0% intro APR period.
Still, qualifying for a business credit card with a startup can be tricky. We break down the best startup credit cards and help you through the application process.
Apply for These Cards
Best Low APR Card: The Chase Ink Business Cash℠ Credit Card
The Chase Ink Business CashSM credit card is a great option for a startup business credit card. It offers both rewards and a low-interest period, without an annual fee. You get 12 months of 0% APR, followed by a variable rate of 13.99%-19.99%, depending on creditworthiness, as well as a signup bonus of $300 when you spend $3,000 in the first three months of card membership.
You also get a solid rewards package:
- 5% cash back at office supply stores and on internet, cable, and phone services, up to a combined $25,000 spent annually
- 2% cash back on gas and restaurants, up to a combined $25,000 spent annually
- An unlimited 1% cash back on all other purchases
You receive your rewards on your account anniversary, but since there’s no annual fee, you won’t incur charges by keeping your card open. Plus, there’s no fee for additional employee cards, and you can enjoy perks like purchase protection, travel assistance, and rental car insurance.
Best Rewards Credit Card: The Chase Ink Business PreferredSM
The Chase Ink Business PreferredSM is one of the best startup business credit cards out there. You get awesome travel perks, pairing a hefty one-time bonus with strong ongoing rewards. For a signup bonus, you get 80,000 Chase Ultimate Rewards points when you spend $5,000 in the first three months of card membership. You also get ongoing rewards of 3 points per $1 spent on travel, shipping, advertising, and internet, cable and phone services; and 1 point per $1 elsewhere. It does come with a $95 annual fee (waived the first year), but it doesn’t charge extra for foreign transactions or additional employee credit cards.
You might wonder why we’re recommending the Ink Business Preferred, which earns a maximum of 3 points per $1 on bonus categories, instead of the no annual fee Ink Cash, which earns up to 5 points per $1 on bonus categories. First, a signup bonus of 80,000 points is nothing to scoff at—if you value Ultimate Rewards points at 1 cent apiece, that’s an added $500 in value, more than enough to cover the Preferred’s annual fee for six years.
But the real value in the Preferred is that, with this card, your points can be worth much more than 100 to the dollar. With this premium card, you have access to Chase’s Orbitz-powered travel portal, where your points are worth 25% more. This means you’re getting 3.75% rewards on bonus categories and 1.25% elsewhere, and your signup bonus is worth $1,000.
However, you can do even better than that: Ultimate Rewards points are transferable at a 1:1 rate to Chase’s airline and hotel partners, which include British Airways, United, Southwest, and Hyatt. If you transfer your points strategically and snag high-value nights and flights, you can wring 3 cents or more out of each point. This puts your bonus rewards rate at 9%, your base rewards rate at 3%, and your bonus’ value at $2,400. That’s a pretty significant upgrade.
If you don’t plan to carry a balance on your startup business credit card, the Ink Preferred is one of the best options out there for rewards, and particularly for business travelers.
Best Card for Average Credit: The Capital One® Spark® Classic for Business
If you have less than stellar credit, look no further than Capital One. The Capital One® Spark® Classic for Business is a rarity, offering both rewards and no annual fee to business owners with fair credit. Many fair-credit cards have yearly charges, but the Spark Classic not only waives annual fees, it does away with foreign transaction fees as well. To top it off, you get 1% cash back on every purchase you make.
With the Spark Classic, you can build up your credit history and eventually graduate to a good credit card like the Ink Cash or Capital One® Spark® Cash for Business that earns a higher rewards rate.
Can your business qualify for a startup business credit card?
When you apply for a small business credit card for your startup, you can go one of two routes.
You can apply based on your business’ track record—three to five years of revenue and expense statements, a strong history of paying vendors on time, and a strong business credit score. For startups, though, three to five years is approximately an eternity.
The second option, one that almost all small business owners take, is to apply using your personal credit history. You as an individual guarantee the credit card, and in exchange, your application gets evaluated based on your FICO score. The benefit is that you can secure business financing that might otherwise be out of reach.
The downside? You are personally responsible for your debts, even if your business is an LLC. If your company fails and you’re unable to pay your debts, you might have to file for bankruptcy, which will hamper your credit score for years to come.
However, if you stay on top of your payments, you have some influence on whether your startup business credit card activity is reflected in your personal credit history. Most issuers report business card usage to business credit bureaus. As long as you’re making on-time payments, that information lays the groundwork for solid terms on future loans. But know that not every issuer reports business cards to personal credit bureaus.
Some, like Capital One and Discover, default to reporting all activity. Others, like U.S. Bank, American Express, and Chase, report only if you’re seriously delinquent. Finally, banks like Citibank and Wells Fargo have a policy of not reporting business card usage to personal bureaus. Depending on how confident you are in your business’ responsible card usage, you can choose the reporting policy that’s right for you.
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