When it comes to selecting the best business credit cards, the fine print is king. Most business credit cards offer similar introductory terms, such as 0% APR on balance transfers and purchases. However, the details of the card terms often reveal surprising differences.
Significantly the consumer protections of the new Credit CARD Act do not apply to business credit cards. As a result, business credit card issuers still can, and many do, levy harsh penalties on business cardholders. In extreme instances, a late payment can trigger default penalty rates as high as 29.99% APR on existing balances.
To help small business owner navigate through the choppy sea of business credit card offers, here are our picks for the best business credit cards of 2010:
For Business Cardholders Who Don’t Carry a Balance
Capital One Venture for Business
For business owners who want to leverage business expenses to earn rewards, Capital One’s Venture for Business card offers one of the best rewards credit card programs out there. Cardholders earn two miles for every dollar spent—twice what many other programs offer. Rewards earnings can be redeemed not just for free travel, but for cash back, car rentals, hotel stays, gift cards, and other rewards as well.
The miles earnings translate into a straight 2 percent rewards earnings for every dollar spent. Miles earnings can be put towards any airline at any time, with no expiration dates or limitations on the number of miles that can be earned. The redemption value for cash back redemption varies, however, and according to Capital One customer service representatives, is based on each cardholder’s individual credit rating.
Capital One currently offers 10,000 sign-up bonus miles to business cardholders who spend $1,000 in the first three months, and an additional 5,000 miles for signing up additional cardholders within the first 60 days. The card’s $59 annual fee is waived the first year.
An added benefit of the card for frequent overseas travelers is that Capital One does not charge foreign transaction fees on overseas purchases; these fees run upwards of 3 percent for most other card issuers.
For Business Owners Looking for a 0% APR Balance Transfer
Chase Ink with Ultimate Rewards
For business owners looking for short-term 0% APR financing—Chase’s Ink with Ultimate Rewards card offers 0% APR on both new purchases and balance transfers for the first six months with a balance transfer fee of 3%. After the end of the promotional period, cardholders pay an APR ranging from 11.24% to 17.24% variable, depending on creditworthiness.
The Chase Ink Ultimate Rewards card also offers rewards at a rate of one point per dollar spent. Rewards earnings can be used towards travel, shopping, entertainment, and more. Ink holders can earn double points on travel booked through the online “Ultimate Rewards Travel Booking Tool,” and 10 points per dollar on purchases made though the “Ultimate Rewards Mall.” There are no expiration dates or limits on points accrued.
Cardholders will want to stay on their toes with this card, however. Making a late payment, exceeding the credit line, or having a payment bounce may result in a 29.99 % default APR on the existing card balance. The default rate will also be triggered if cardholders make any of the above transgressions on other accounts held with JP Morgan Chase-related companies.
Best Business Credit Cards for Carrying a Balance
For business cardholders who wish to carry a balance from month to month, Bank of America business credit cards offer a unique advantage. Unlike other card issuers, Bank of America has pledged that it will apply the new rules of the Credit CARD Act for the bank’s business credit cards as well.
This means that Bank of America business cards, such as the Platinum Plus for Business MasterCard, unlike other business cards, should offer protection from retroactive interest rate hikes as well as 45 days notice prior to rate increases on future purchases.
The BofA business credit cards currently feature some of the lowest APRs in the industry. The regular APR weighs in as low as Prime + 5.99% for people with good credit. The APR increases with declining credit scores; cardholders with not so great credit can expect to pay interest rates as high as Prime plus 16.99%. Both the Bank of America Platinum Visa for Business and Platinum Plus for Business MasterCard come free of annual fees and currently offer 0% APR intro on purchases for 6 months.
The cards come with the usual additional benefits of business credit cards, such as free employee cards with controllable spending limits, monthly employee spending reports, and, as an extra perk, Employee Misuse Insurance Protection.