8 Signs It’s Time to Get a New Business Credit Card
Update: Some offers mentioned below are no longer available. View the current offers here.
If you're one of the 25 million Americans who has remained loyal to the same credit card for a decade or longer, as one survey showed — or you've never switched cards in your lifetime — you're probably missing out. Business owners included in this group haven't taken advantage of recently increased welcome offers from cards like The Business Platinum Card® from American Express or ongoing rewards from a card like the Ink Business Preferred Credit Card.
In short, you're ignoring free money, potentially thousands of dollars worth of travel.Even if you've picked up a new card or two in recent years, that doesn't mean you have the right business credit card. Ask yourself whether you're able to take full advantage of what the card offers — or if your card leaves you wanting more. Either way, this may be an indication it's time to start shopping around for a better way to maximize rewards and benefits on your business spending.Let's look at eight signs it's time to look for a new business credit card.
1. You Don't Have a Business Credit Card
If you own a business — even if it's not your full-time occupation — and you don't own a business credit card, well, that's the easiest sign of all to spot. You should strongly consider getting one so at the very least so you can separate your personal and business expenses.But that's just the beginning. A business credit card also will allow you to start building business credit, which in turn can improve your odds for favorable bank financing later on as your business grows. Putting your business spending where it belongs also will reduce the strain you're putting on your personal credit score, which may be suffering because you're approaching your credit limit every month by placing business expenses on your personal credit cards.
2. Your Business Puts a Bunch of Money on Cards
You might be earning a great return on your business spending and still be missing out. That 2% or better return you're getting on most spending is helping you put money back into your business. But here are two areas where you might not be taking advantage of what big spending can do for you: Earning welcome bonus rewards and rewards and benefits for meeting annual spending targets.
Amex's Business Platinum card, which we mentioned at the top of this post, is offering a 75,000-point welcome bonus. You'll have to complete some pretty heavy spending to capture the full bonus, but if your business has a large budget, this should be no problem. Earn 50,000 bonus points after you spend $10,000 and an extra 25,000 bonus points after you spend an additional $10,000 all on qualifying purchases within your first 3 months of Card Membership. The full welcome bonus is worth $1,500, based on TPG's most recent valuations of American Express' Membership Rewards.
Use your monthly spending to your advantage by picking up a credit card that offers extras (like elite airline or hotel status) when you accrue $10,000 or more in annual spending. Here are some examples:
- Earn up to 15,000 Tier Qualifying Points each calendar year at a rate of 1,500 TQPs for every $10,000 you make in purchases on the Southwest Rapid Rewards Premier Business Credit Card. You need 35,000 Tier-Qualifying Points (or 25 paid one-way flights) in a calendar year to qualify for Southwest’s A-List status.
- You’ll automatically get Hilton Honors Gold status when you hold the Hilton Honors American Express Business Card, but you can bump yourself up to the top-tier Diamond status when you spend $40,000 on the card in a calendar year.
3. Your Business Has Changed
Think back to when you were just getting started. Here are a few possible scenarios that might reflect your experience:
- Your client base was mostly local, which meant you had reason to expense the occasional client dinner or night at the ball game, but you weren't getting on planes very often. Now your customers are spread throughout the country and you have to travel frequently. Even if your cash-back business card is great, you're probably not taking full advantage of the rewards available to you. Consider a business card that offers top rewards on travel-related purchases. The Business Gold Rewards Card from American Express pays 3x Membership Rewards points on one of five categories you get to select — airfare purchased directly from airlines, US purchases for advertising in select media, US purchases at gas stations, US purchases for shipping and US computer hardware, software, and cloud computing made directly from select providers — and then 2x on the remaining four, with a limit of $100,000 in purchases each year in each of the five categories. Spend $5,000 annually on airfare and you'll see a return of 15,000 Membership Rewards points, worth $285 based on our valuations.
- You were Employee No. 1 when you started out. There was no employee No. 2. Now you manage several (or more) people, some of whom you have given spending authority. Is your credit card prepared for this? Are you prepared to pay the sometimes big annual fees attached to authorized user cards? If not, find a business credit card that offers free employee cards. There are a bunch, including the Capital One Spark Cash for Business and the Capital One Spark Miles for Business.
4. You're Not Taking Full Advantage of All Your Spending
You found a great card to pay for business travel, and you opened a card like the SimplyCash® Plus Business Credit Card from American Express, which offers top rewards on purchases like office supplies. With this card, you earn 5% cash back at US office supply stores and on wireless telephone services purchased directly from US service providers on up to $50,000 in purchases during a calendar year, then 1% thereafter. Earn 3% cash back on up to $50,000 in annual spending (then 1%) from one of eight categories you pick from — airfare purchased directly from airlines, hotel rooms purchased directly from hotels, car rentals purchased from select car rental companies, US gas stations, US restaurants, US purchases for advertising in select media, US purchases for shipping and US computer hardware, software, and cloud computing purchases made directly from select providers. You’ll earn 1% cash back on all other eligible spending.
But you're still getting just a 1% return on your non-bonus spending, which is low. You'll need a card that pays big on everyday purchases like the Ink Business Unlimited Credit Card or the Blue Business®️ Plus Credit Card from American Express.
You earn 1.5% cash back on all purchases with the Ink Business Unlimited Credit Card. Because you can transfer your rewards to a Chase credit card account you own that's part of the Ultimate Rewards program, that 1.5% becomes 1.5x Ultimate Rewards points worth 2.1 cents apiece, according to TPG’s latest valuations. Your return is worth up to 3.15%.
Blue Business Plus offers an even better return: You’ll earn 2x Membership Rewards points on all purchases for the first $50,000 you spend each calendar year, then 1x point thereafter. Since Amex points are worth 1.9 cents each, according to TPG valuations, you’re looking at a return on all spending of almost 4%.
5. Card Perks You Love Have Changed
Credit card companies are cutting back on benefits that used to be pretty standard, like price protection and purchase protection. If card benefits were a factor in your decision to apply for a business credit card in the first place, you should be sure to check whether you still receive them. The only major issuer not to announce a rollback of benefits recently is American Express, which will offer improvements to its purchase protection and extended warranty benefits on both consumer and business credit cards beginning August 1, 2018.
6. Your High Annual Fee Is No Longer Worth It
Closing a credit card you no longer use can hurt your credit score, but you don't have to put up with an annual fee that costs you or your company hundreds of dollars a year if you don't use the card or the rewards and benefits are no longer worth the cost. You may be able to downgrade to another business card in the issuer's portfolio or ask for an annual fee waiver. If these efforts fall short, make sure to use all the points and miles you have earned before closing the card. Then look for a business card that charges no annual fee like the Bank of America Business Advantage Travel Rewards World Mastercard credit card, which pays 3x points on travel booked through the Bank of America Travel Center, and 1.5x points on all other purchases.
7. Your Card's Interest Rate Is High
Paying off your balance on time and in full every month is an important way to keep business costs in line and make sure you're receiving the full value of your rewards. If you carry a balance — even occasionally — you may be paying too much in interest. Business credit cards tend to carry higher interest rates than their consumer counterparts. With interest rates on the rise for everyone, you may want to consider a small business credit card that offers some period of interest-free financing. A few solid examples include:
- The Blue Business®️ Plus Credit Card from American Express, which offers a 0% intro APR on purchases and balance transfers for 12 months from account opening, then 14.74%, to 20.74% variable (See Rates & Fees). Pay $5 or 3% of the amount transferred on balance transfers, whichever is higher (See Rates & Fees). There is no annual fee (See Rates & Fees).
8. You Need to Make a Big Business Purchase
You may have your budgeted expenses covered by a business credit card that offers solid rewards in the bonus categories for which you spend the most. But what about expenses that aren't in your budget or are one-time large needs?
You'll want to look for a credit card that offers a few sound features, like the ability to charge more than your credit limit (or, even better, a card that has no set spending limit). Charge cards don't come with a set spending limit (that doesn't mean you have unlimited spending), and you'll want to look at the American Express portfolio of small business cards if the need financing for large purchases. You'll have to pay off your bill in full at the end of the month, but you can also take advantage of extra rewards on a card like the Business Platinum, which pays 1.5x points on a single purchase of $5,000 or more.
Otherwise, consider a card like the SimplyCash® Plus Business Credit Card from American Express, which allows you to spend above your monthly credit limit as long as you repay the account balance above the credit limit in full (plus your minimum monthly payment) by the bill’s due date.
If you need to carry a balance for more than 30 days, The Plum Card® from American Express gives cardholders 60 days to pay off a balance before accruing interest (See Rates & Fees). You’ll have to make your minimum payment — 10% of the balance from new charges plus any previously deferred balance in full — by the due date to avoid interest. In months where cash flow isn’t a problem, you can also enjoy a 1.5% discount on the portion of eligible charges you pay off within 10 days of your statement closing date.
You may be completely satisfied with the credit cards you're using today to help finance your business. And that's great. But as you look for ways to keep your budgeted expenses in check, don't forget to look at how credit cards can play into the equation. You may just find that adding a new business card can improve your firm's bottom line — or increase the rewards and free travel you and your employees can enjoy.
For rates and fees of the Blue Business Plus, please click here.
For rates and fees of the Amex Plum Card, please click here.