How to Choose the Right Business Credit Card for New Businesses

Most entrepreneurs – new and experienced – know that launching a new company often means managing many financial decisions at once. From figuring out ways to manage daily cash flow to tracking business spendings, every entrepreneur understands the need for and importance of financial tools to make lives easier. A key tool for new businesses is the right business credit card. A good business credit card for new businesses helps manage expenses, build credit, and earn rewards.

A 2024 report by Visa showed that eight-in-ten small businesses use credit cards to make business payments. Among them, almost 80% earn at least some type of reward currency; 59% collect bonus points/rewards (minimum 1x points), while 47% collect cashback (including some who collect both). The vast majority (73%) use their rewards or cashback for business purposes. For new business credit cards, it's important to consider interest rates, fees, and how easy it is to manage payments. Finding the best business credit cards for new LLCs involves careful comparison to make sure you're choosing wisely.

Steps to Choose the Right Business Credit Card

Step 1: Assess Your Business Needs

One of the first things you need to do before you select a business credit card for new businesses is to define what your company requires most. For instance, if your company spends a lot on travel, look for new small business credit cards offering travel perks or mileage points. If your company requires big upfront business purchases or does a lot of business spendings, a card with a low introductory APR could be ideal. You need to carefully check your typical business expenses so that you can select the best credit cards for your venture. You need to be certain that you understand your monthly spending patterns and potential future needs, as this directly influences which new business credit cards for LLCs will provide maximum benefit.

Step 2: Evaluate Interest Rates and Fees

Another point to remember while choosing a business credit card for new businesses is to focus on annual fees, interest rates and fees. Cards with low introductory APRs are attractive for new business credit cards, as they offer a period of interest-free financing. However, watch out for what happens after this introductory period. For instance, high ongoing APRs can quickly become costly. The best business credit cards for new LLCs generally feature transparent fee structures and competitive interest rates. Carefully review detailed disclosures to avoid cards with hidden fees. This will ensure that your new business credit cards for LLC are financially manageable.

Step 3: Rewards and Benefits Comparison

Whether it’s a personal credit card or a business one, most cardholders look for rewards and benefits while selecting a card. Rewards programs tend to influence the choice of a business credit card for new businesses. Cashback rewards are straightforward and useful for any business model. Other credit card benefits include flexible spending limits, free credit report, affordable cash advances, great reward points and more. A lot of popular credit cards offer unlimited cashback on purchases.

Alternatively, travel points can save a lot of money for companies frequently traveling. The best business credit cards for new LLCs will clearly match their reward offerings with your typical business expenses. Some cardholders also get to enjoy long intro APR duration, extended line of credit, access to airport lounges and more along with other credit card offers. Choose a business credit card for a new business that makes sure its rewards program matches closely with your spending habits, maximizing the benefits you earn from daily expenses.

Step 4: Understand Credit Requirements

Not all credit cards have the same requirements when it comes to credit scores. Each business credit card for new businesses is different. Most new credit cards require good to excellent personal credit scores. Some cards, however, cater specifically to startups or businesses with limited credit history. Secured business credit cards are great for building or improving credit history. This makes them ideal new business credit cards for LLCs just starting. Always check the eligibility criteria closely, ensuring the best business credit card matches your current credit profile.

Step 5: Additional Features and Tools

Look beyond standard benefits when selecting a business credit card for new businesses. Additional perks like expense management tools, integration with accounting software, and detailed reporting can greatly simplify financial tasks. These features make the best of business credit cards even more beneficial by streamlining bookkeeping and financial planning. Some credit cards also offer extra bonus points if you use your card on eligible spending categories along with balance transfer and gift cards. Consider how these extra features align with your administrative needs when choosing a new business credit card for LLC.

Step 6: Read Reviews and Seek Recommendations

Read online reviews and seek advice from peers you trust about their experiences with different business credit cards. Use online resources and websites to compare thoroughly and go over user reviews that highlight practical pros and cons of all aspects of a business credit card including introductory APR duration, reward points, bonus offers and welcome offers, if any. Reviews from other business owners can reveal valuable insights about customer service, ease of managing accounts, and reliability of rewards programs. This helps you confidently select the best business credit card that suits your business style and operational preferences.

How to Apply for a Business Credit Card

Applying for a business credit card for new businesses typically involves the following straightforward steps:

• Gather Required Information: You need to ensure you have all the essential details ready with you like your business name, business address, tax identification number (EIN) or your social security number if operating as a sole proprietor. Keep financial details such as estimated annual revenue and monthly expenses prepared too as you might need to provide them. Accurate information ensures smooth processing when applying for a business credit card for new businesses.
• Choose and Compare Cards: You need to select a business credit card for new business that fits your needs, carefully comparing interest rates, fees, rewards, eligibility requirements and even credit limit. Don’t forget to check reputable providers known for excellent customer service and favorable reviews to enhance your application experience and satisfaction with your choice.
• Submit Your Application: Be careful while filling out your chosen card's online application form. The process, in general, takes only a few minutes. Make sure that the details provided by you match your business records exactly to avoid any delays. Applications for the best business credit cardscan be approved quickly if all information is accurate.
• Await Approval and Card Delivery: Approval doesn’t take a long time. After approval, you'll receive your new card by mail, typically within one to two weeks. You should activate the card immediately upon receipt to begin managing your business expenses effectively and building your business credit profile.

Final Thoughts

Choosing the right business credit card for new businesses helps streamline expenses, build credit, and provide valuable perks. Carefully assess business needs, evaluate fees and rewards, understand credit requirements, and use available reviews to make an informed choice. Whether it's cashback, travel rewards, or financial tools, a good business credit card can significantly benefit your financial management. Taking these considerations seriously ensures your new business credit card for LLC is a financial asset rather than a liability.

FAQs

Can a new business owner qualify for a business credit card for new businesses?

Brand-new ventures can qualify for a business credit card for new businesses. Typically, credit card issuers look at personal credit history and scores, so having good personal credit helps. If your credit is limited, secured cards designed for businesses are available. These cards help establish or improve credit while offering necessary financial flexibility. Always check specific eligibility criteria to select the best business credit cards for new LLC tailored to your current credit status.

Are there business credit cards specifically suited for LLCs?

Many lenders or issuers offer business credit cards for new businesses, considering the specific needs and structure of LLCs. Cards like Chase Ink Business Preferred and Capital One Spark cater explicitly to LLCs, providing benefits that support small business operations and growth. These cards simplify financial management by offering detailed expense tracking and useful business insights, essential for startups and established LLCs alike.

What should I avoid when selecting a business credit card for new business?

Choose a business credit card with low fees, clear rewards, and strong customer service. Avoid high APRs after introductory offers and cards with poor reviews. Opt for transparency and reliability to maximize financial efficiency.

Can a business credit card for new businesses improve my credit score?

Responsibly using new business credit cards helps improve your personal and business credit scores. Timely payments and maintaining low balances enhance your credit profile, beneficial for future financing needs. Consistent and disciplined use positions your business favorably, enabling access to better credit options over time.

Are rewards from new business credit cards taxable?

Typically, rewards like cashback or travel points from business credit cards aren't considered taxable income. Instead, they're viewed as rebates. However, if you receive rewards such as sign-up bonuses or incentives for business referrals, they could be taxable. It's wise to consult a tax professional for clarity on handling rewards from your business credit card for new businesses.

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