How many business credit cards should you have?
Editor's Note
The best business credit cards offer a variety of perks and attractive earning rates that can benefit many types of businesses. However, some business owners will need more than one card. They may want access to higher spending limits or wish to spread their purchases across different cards based on bonus categories.
In any case, having more than one business card can give your business the purchasing power it needs while using each card's unique perks to maximize savings and rewards.
In this article, we'll explore when it makes sense to hold more than one business credit card and the benefits multiple cards can offer your small business.
Should a business have multiple credit cards?
When it comes to deciding on the number of credit cards you should have, business owners can take the same approach as personal cardholders and use more than one credit card. This helps to increase purchasing power, build credit and increase rewards.
By having more than one card, a business can increase its purchasing power with a higher overall credit limit. Having only one credit card can limit a business's access to credit.
For example, a business owner with a limit of $15,000 on an Ink Business Preferred® Credit Card (see rates and fees) may run into trouble if they need to spend $10,000 on business expenses in one month.
In this situation, it would benefit the business to have more than one card so their purchasing power isn't restricted to the remaining $5,000 and their company can operate smoothly.
It also makes sense to have multiple business cards if your business routinely spends in categories that your current card doesn't cover. You don't want to leave rewards on the table, especially if you're spending thousands in a particular category every month.
On the other hand, having multiple credit cards can complicate spending tracking and, in some cases, raise your business's annual expenses.
Let's dive deeper into the benefits of having multiple business cards, as well as some things to keep in mind.
Related: Business credit cards: What they are and how they work
Benefits of multiple business credit cards
Carrying more than one business card has many benefits. Like we mentioned above, it enables your business to earn rewards in multiple common spending categories, helping offset expenses.
Like personal cards, business cards can earn cash back, miles or points. For example, the Ink Business Unlimited® Credit Card (see rates and fees) offers 1.5% cash back on all purchases.
Additionally, businesses that spend on travel can earn 5 points per dollar on airfare and prepaid hotels booked on AmexTravel.com with The Business Platinum Card® from American Express. You can also gain valuable statement credits when you purchase at select merchants, such as Dell in the U.S., Adobe and Indeed (enrollment required; terms apply; Adobe credit is subject to auto-renewal).
You'll get up to $150 in statement credits on U.S. purchases made directly at Dell and an additional $1,000 statement credit after spending $5,000 or more per calendar year, up to $360 in statement credits back every calendar year for Indeed and $250 in statement credits back after spending $600 or more on U.S. purchases every calendar year for Adobe purchases. (Enrollment is required)
These cards can help businesses cover some annual costs, bringing tangible value to business owners.
Since having multiple cards open at once increases your overall available credit, your business can more easily maintain a lower credit utilization ratio, which is good for building business credit over the long term.
Business credit scores work differently from personal credit scores, but the core concept is the same: A higher business credit score can result in access to better rates on business loans or business lines of credit from banks.
Related: Amex Business Platinum card review: Big bonus and luxury benefits
Things to consider before applying for multiple business credit cards
Before you apply for additional business cards, here are a few things to consider.
Annual fee
Depending on which business cards you have applied for, they may or may not have an annual fee. Having multiple business cards could become costly if you're paying an annual fee on more than one card.
For example, the aforementioned Amex Business Platinum has an annual fee of $895 (see rates and fees). If a business adds other cards to the mix, it can quickly increase expenses.
Benefit utilization
Business credit cards have their respective benefits and perks, whether it be bonus cash-back categories, statement credits or travel benefits like lounge access. If your business won't use the majority of a card's benefits, it may not be worth paying the annual fee.
On-time payments
Most business credit cards have flexible repayment terms that allow you to carry over a balance from month to month, but that involves making minimum monthly payments. As a business owner, if you have two, three or more business credit cards, you need to decide if you're in a position to make minimum payments on multiple cards each billing cycle.
If minimum payments are not made on time, you may incur late fees and a negative hit to your credit report. Remember that every card you carry a balance on will continue to accrue interest, increasing your business expenses and eating into your rewards earnings.
Related: The best way to pay your credit card bills
How many business credit cards should you apply for?
While there is no limit on the number of business cards you can apply for, it's important to note that every submitted application will result in a hard inquiry on your credit report. Not only can this lower your personal credit score, but it can also decrease your business credit score.
Before applying for additional cards, consider which ones best fit your spending habits, what benefits will help your business, the APR rates and whether your company can manage multiple credit cards.
Bottom line
The number of business credit cards you should carry depends on your business's needs and how you will use the various perks and benefits that business credit cards offer. While only having one card sounds simple, multiple cards can increase a business's purchasing power and open up the possibility for more flexible rewards.
Learn more: Best business credit cards
For rates and fees of the Business Platinum Amex, click here.
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