In the last week publish, Credit Fundamentals covered elusive cards “by invitation only.” For number 7, I will talk about the cards that require a few extra steps, but relatively easy to get — business credit cards.
Business credit cards have two main advantages.
For one, these cards typically have higher credit limits than personal credit cards. As a single entity, a business tends to earn more than a person.
Additionally, business credit is distinct from personal credit. If your business is incorporated under a structure that permits limited liability and it goes bankrupt, your personal credit and assets will not be affected.
Individuals may qualify for business credit cards without incorporating a business. For example, sole proprietors or freelancers qualify for business credit cards.
But it comes with more liability, and lenders often use your personal credit report to check and investigate in the absence of a commercial credit report. If you are applying for business credit without incorporating a business, you will apply under your social security number and a bank will handle your personal credit.
But if your business is big enough and you are incorporating it, you can use an employer identification number. An EIN keeps personal and business expenses private. It also eliminates the need for a “personal guarantee,” which is a promise that you have to pay for the business cards with personal funds if the company can’t pay for it.
1. Favorite Chase Ink Business
The Chase Ink Business Preferred Card from JPMorgan Chase & Co. is a solid option.
The card offers a lucrative sign-up bonus of 100,000 points after spending $15,000 in three months. It comes with an annual fee of $95. He also earns three times the cash back on advertising costs, cable service, internet service, phone service, shipping purchases and travel expenses.
This card also earns “ultimate rewards” points, meaning you can combine points with a personal Chase Sapphire Reserve card and receive 1.5x the points redemption value through the Chase Travel Portal.
Additionally, there are unlimited employee cards. If you’re a business owner, all business-related purchases your employees make are cash back for you.
2. Amex Blue Business Cash
For a business card with no annual fee and a solid revenue structure, American Express Co. offers the Amex Blue Business Cash. The card gradually rewards user spending, with cash back totaling $250 after spending $5,000 and an additional $250 after spending $10,000.
After these sign-up bonuses, he earns 2% cash back on all purchases up to $50,000, then 1% thereafter. This is a card for a business owner who appreciates simplicity and wants value for money without having to think too much.
This is the fifth and final issue detailing credit cards, as I’ve covered all the major categories. I hope my credit card recommendations have given you some ideas about the benefits and points credit can give you.
We’ll be focusing more on the two “L” words in future issues – leverage and lending – and how they fit into a company’s future capital structures.