The Best Business Credit Cards for Startups

10 min read

Executive Summary

✨ NEW Get Early Access to Tillful Card | Learn more about the differences between business credit cards vs. personal credit cards, when you should look beyond a business credit card, and our top picks for the best business credit cards startup edition.

Disclaimer: Our first priority is giving you the best financial advice for your business. Tillful may receive compensation from our partners, but that doesn’t affect our editors’ opinions or recommendations in the content on our website. Editorial note

The ultimate guide to the best business credit cards for startups

A good business credit card can benefit your startup or brand new small business in the long run by helping you better manage your finances and build business credit. You can earn rewards, get some credit history under your belt, and optimize cash flow management all by leveraging a business credit card.

Many startup founders may be tempted to use personal credit cards when first establishing their business, but we don’t recommend doing so. Using personal credit cards for the company not only makes tax reporting and yearly expense management more complex but in case if you fail to do proper reporting, heavy usage on personal credit cards can be followed by audits

While on the topic of mixing personal and business credit, you should also note that while technically, personal credit cards can be used for both personal and business expenses, business credit cards can only be for business purposes. Most, if not all, business credit cards come with an explicit clause in the contract prohibiting their use for personal expenses. It’s better to keep things simple: use a personal credit card for personal use, and a business credit card for business use.

Using a business credit card instead of a personal credit card is not only the best practice, but comes with a number of business-related perks that can help you both save money and invest in your company’s overall growth. There is no dearth of business credit cards for small businesses in the market today, but some are better equipped for startups than others. Let’s  delve into some key differences between business and personal credit cards, when you should look beyond a business credit card, and our top picks for startups.  


Need a better business credit card or need to build credit faster? The Tillful Card for Business has opened up for early access! Tillful Card is purpose-built for small business owners with the benefits and features you care about most. Get on the waitlist here.


 

What is a business credit card and how is it different from a personal credit card?

Small business credit cards are designed to cover expenses for small businesses, freelance gigs and side hustles. They tend to come with features that businesses need, such as employee cards. Here’s a quick comparison of the two. .

Business Credit Card vs. Personal Credit Card
Here's how the features compare.
Features Business Credit Card Personal Credit Card
Credit reporting Business activities can be reported to both consumer and commercial credit bureaus, affecting both personal and business credit scores. Activities are generally reported monthly to the three major consumer credit bureaus: Equifax, Experian and TransUnion.
Credit limits Usually more spending power. Generally, lower spending power.
0% intro APR periods Very few offer introductory 0% APR terms, for nine or 12 months, and often just apply to purchases, not balance transfers. Many cards feature introductory 0% APR periods that can last 12 months or longer.
Bookkeeping benefits Many offer itemized reports of your spending so you can track expenses. Personal credit cards generally don't offer detailed reports.
Consumer protection Consumer protection laws, including the Credit Card Act of 2009, don't apply to small-business credit cards. Consumer protection laws apply.
Bonus categories Business credit cards often offer bonus rewards on business expenses like phone bills, digital advertising and office supplies. Personal credit cards often offer bonus rewards at grocery stores, gas stations, etc..
SOURCE(S): CNBC, Forbes, Investopedia

 

When should you use a business credit card?

Another important thing to understand before getting a small business credit card is knowing when to use a credit card for your small business, and when another financing option, such as a business line of credit, might be a smarter or better fit. Here are three key instances when you should consider getting a credit card for your small business:

  • You need less than $50,000: If you need a relatively smaller sum to kickstart a service or launch a new product, credit cards with a higher spending limit might be the best way to go. Business credit card limits usually top out at $50,000 for the most qualified businesses.
  • You don’t qualify for a bank loan: If you find yourself disqualified for a bank loan, try for a business credit card instead. In addition to providing you with the financing you need, these cards will also enable you to earn rewards on business-related purchases.
  • You need flexible financing for your business at hand: Another ideal situation to seek a credit card is when you are in need of flexible and fast working capital for your business.

 

What to look for when choosing the best credit card for your startup

Now that we have covered what business credit cards are, how they are different from personal credit cards, and when you should opt for one, it is time to look into some of the primary features to consider before selecting the best business credit card for your startup. 

  • No personal guarantee: No personal guarantee is a great perk for any small business owner, but especially for founders during the risky early days of building a startup. As a quick primer, a personal guarantee is an individual’s legally binding promise to repay credit issued to their business card with their own personal assets in case the company is unable to pay off the debt. This means that you will be held personally liable for charges on your credit card balance if your company goes under or is otherwise unable to make payments. While we aren’t encouraging you to prepare for the worst, we do recommend you be ready for it.  Having a credit card with no personal guarantee is a safe choice.
  • No credit check: As a new startup or small business looking for capital to take off, you likely don’t have any business credit, which can bar you from obtaining financing. Thankfully, there are a few small business credit cards that are available with no credit check. This becomes an ideal feature for early-stage startups looking for fast and flexible financing options. Alternatively, look for cards that accept poor credit.
  • Low APR and/or no introductory APR: to use for aggressively scaling/startup capital): The lower the annual percentage rate, or APR, on a credit card, the better it is for your startup, allowing you to carry a balance with less interest. Just be sure to read the terms and conditions of the offer carefully. Some credit cards will charge a penalty APR for the entire introductory period if you don’t pay in full at the end of it, for example.

Need a better business credit card or need to build credit faster? The Tillful Card for Business has opened up for early access! Tillful Card is purpose-built for small business owners with the benefits and features you care about most. Get on the waitlist here.


 

The Top Business Credit Cards for Startups and New Small Businesses

With so many small business credit cards out there, it can be a bit daunting to decide which one is the best for your startup. Plus, it is also important to note that features like no personal guarantee and low APR aren’t always the easiest to find. There are a handful of credit cards that offer every ideal feature for small businesses and here’s a rundown of the top three for your consideration.

Brex Card 

One of the best credit cards for startups, the Brex Card doesn't require any personal guarantee, has no annual fee, offers a 0 percent APR, and doesn’t require a credit check to qualify. Brex evaluates the creditworthiness of a startup by evaluating the company's cash balance, spending patterns and backing investors. 

New Brex credit cardholders can earn up to 50,000 signup bonus points after spending $9,000+ in the first 30 days. With this card, you also get discounts with relevant tools that most startups use, including Slack, Zoom, AWS and more. Brex also offers generous rewards, which can be tailored to help you earn more based on the type of business you run. You can earn up to eight times on ride-sharing expenses and 1.5 times on advertising expenses. You can earn up to three times on eligible Apple purchases made through the Brex portal, five times on travel booked through the Brex portal and four times at restaurants. 

Just remember that the Brex card is a charge card, which means that you need to pay off the balance at the end of every payment cycle (daily or monthly). While it doesn’t allow you to carry debt, it is still a great product for helping you build business credit while providing attractive rewards. This card is an ideal option if you have a thin credit file but your company is well-funded.

 

Divvy Card

The Divvy Business Card brings in some very unique perks to the small business credit card world and is yet another great option. Ideal for startups of all sizes this card also comes with no annual fee and zero percent APR. No personal guarantee is required. Some of the additional unique perks in the dashboard include varying degrees of account access, individual budgeting options, and reimbursement for expenses from your personal payment method to keep within budget. With Divvy, you can earn rewards based on the frequency in which you pay off your balance. This feature enables you to earn potentially 3.5 times more points by paying your bill weekly instead of monthly.

This card gives small businesses unprecedented control over how the company money is spent and also helps prevent impulse extravagance. One thing to note here is that the rewards system isn’t the best with Divvy. They offer a gamified rewards-earning process where what you earn depends on which bonus categories you spend in and how often you pay your bill. Finally, like the Brex card, the Divvy card is a charge card.

 

Ramp card

This card by one of the leading fintech startups in the world is definitely among the top credit cards for small businesses and startups. Claiming to be “the only corporate card and spend management platform designed to help you spend less”, the Ramp corporate credit card is arguably the best for small businesses and startups. Investors and key stakeholders seem to agree. As per the latest reports, the fintech startup is raising $300 million in a Series C round. The start-up was valued at $1.6 billion in April this year and is set to double its valuation at $3.9 billion.

The Ramp card does offer a wide range of features, which is why it is so popular. Ramp differentiates itself from competitors by saving the average client 3.3% annually on their spending by automatically identifying unnecessary expenses. Plus, the ​​Ramp’s card offers a flat 1.5% cash back rate on all purchases. The Ramp card also offers a robust suite of bookkeeping-related benefits, plus there’s no annual fee for businesses with less than 50 employees. However, larger companies will have to pay a monthly fee — keep that in mind as you scale.

 

Top 3 Business Credit Cards
Best for startups and new small businesses.
Cards Top features Qualification criteria Ideal for
Brex Card No annual fee, 0% APR, No personal guarantee, No credit check, Dynamic credit limits, Instant virtual card-access, $50,000 welcome bonus Minimum bank balance $50,000, a US EIN, and not operating as a sole proprietorship Best suited for well-funded startups.
Divvy Card No annual fee, 0% APR, Multiple virtual card-access, Customizable permissions for employee cards, Budgeting options Minimum $10,000 in transactions per month Relatively low barrier to entry; suitable for a for-profit venture, irrespective of the size of the company.
Ramp Card No annual fee, 0% APR, No personal guarantee, Built-in spend control , No late fees, No card replacement fees, Unlimited virtual card-access Business must be a registered corporation or LLC. Minimum bank balance $100,000. Suitable for well-funded or more established startups and small to medium-sized businesses.
SOURCE: Brex, Divvy, Ramp

 

When you’re new on the block, building credit and obtaining extra cash to invest in your business can prove a bit challenging. You may be tempted to mix personal and business finances by using a personal credit card, but this can prove risky, tedious, and won’t help you build business credit. With these three business credit cards for startups, you should be well on your way to investing in your company’s financial future (and getting rewarded while you’re at it).

About the author

Catherine Giese

Written by Catherine Giese

Catherine is the Social Media Manager at Tillful. She writes answers to our most-asked questions and covers the news updates that small business owners need to know.

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