$500 for Signing Up: 5 Best Perks in Small Business Credit Cards

Posted by on January 7, 2013 in Business Financing [ 0 Comments ]

5 Best Perks in Small Business Credit CardsMany major credit card issuers target small business owners by offering tempting features for cardholders. Small business owners often turn to credit cards to deal with cash flow issues and make purchases for their business. Sounds like a match made in heaven, right?

First, a few words of caution…

Most card issuers are not very strict with their definition of “business,” so you could qualify if you have a small sideline business or a shop on Etsy. In these situations, when you don’t have a federal tax identification number and use your Social Security Number instead, your personal credit record could be adversely affected should you miss a payment or pay late.

In addition, you should also know that small business credit cards are not covered under the CARD Act of 2009 which implemented several consumer protections for individuals. That means that small business cards could still subject you to practices like double-cycle billing and arbitrary interest rate hikes. Be sure you understand the terms before you sign up for a small business credit card.

All of that said, here are some of the great perks card issuers offer with small business credit cards.

1. Signup Bonuses

Some card issuers offer cash signup bonuses of $200 — and even $500 — for cardholders who meet required spending thresholds by a certain deadline. The Chase Ink Bold card offers a $500 sign-up bonus (or $625 if the bonus is applied toward travel) after your first purchase. The regular Chase Ink card (not Bold) is currently offering a signup bonus of $200 if you spend $5,000 in the first three months.

2. Travel Rewards

Travel rewards have long been a staple of personal and business credit cards, and today’s small business cards are generous with miles and other travel reward programs. For example, Capital One’s Spark Miles card offers miles at a rate of 2% on purchases; those miles can then be accumulated and used for various travel expenses, like airfares, lodging, and gas. The Starwood American Express Business card offers more generous hotel rewards than other cards and offers a 25,000-point signup bonus that’s worth around $575.

3. Online Ad Management

This is a somewhat different perk, and one that only started being offered recently. The AdManager, launched in 2011 by American Express OPEN, is a tool that helps small businesses create and measure the effectiveness of online ad campaigns. Software for managing online ad campaigns is generally out of reach for small businesses with limited marketing budgets, but AdManager puts these tools in the hands of smaller businesses.

4. Discounts for Paying Early

American Express OPEN also offers the Plum Card, which gives cardholders flexible payment options. Paying early earns cardholders a 1.5% discount, or they can opt for up to 60 days to pay without interest. As of early 2013, this card is upping the pay-early discount to 2% for the first six months on all purchases up to $250,000. The annual card fee is waived for the first year, but for subsequent years it’s a rather-steep $250, so calculate whether your savings for paying early will offset the fee.

5. Cash Back Rewards

Generous cash-back rewards suit many small business owners, and card issuers deliver. The Chase Ink card has no annual fee and 5% rewards in bonus categories that are easily redeemable for gift cards. SimplyCash by American Express is a cash-back card that offers 5% cash back on purchases commonly made by small business owners, like wireless services, office supplies, and gas.

Small business credit cards are often used as a part of an overall business debt management plan. To choose the best one for your needs, start by analyzing your spending and credit habits. If you are diligent about paying the entire balance each month, look for low fees and don’t worry as much about interest rates. If, however, you carry a balance, look for a low interest rate first.

Once you’ve found two or three cards that fit your spending patterns, evaluate the perks offered to see which one would benefit your business most. Keep in mind that small business cards are not subject to the 2009 CARD Act provisions, so if you really need to protect yourself from surprise interest spikes, you may want to consider obtaining a personal credit card for business use instead.

Photo Credit: Philip Taylor

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