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Business credit cards play a role in managing small business expenses. Making everyday purchases, strengthening your cash flow, building a credit history and reaping rewards are just some of the benefits of opening and using a business credit card. With a strong market of credit card vendors, small businesses should take their time to understand what is the best credit card for their situation. We also look at vendors and key things to know about merchant accounts and credit card processing.
Reasons to use a business credit card
Business credit cards can provide a lot of value to small business owners. In addition to providing access to capital to operate your business, a business credit card Can be a tool for building credit, providing cash flow flexibility, and more. Let us look at some of the key benefits of using a business credit card:
- FLEXIBILITY: A business credit card gives you flexibility with your cash flow. For example, it may be better to use a credit card (as opposed to cash or a debit card) to delay payment until next month. A business credit card gives you options.
For more information on how to use business credit cards (and other credit and loan products) to improve cash flow, please visit our article titled Smart Ways to Increase Cash Flow with Small Business Financing,
- timely payment: Set up operating expenses and bills to be automatically paid from your credit card so there’s no business interruption.
- Credit: If you are a new business, a business credit card is a tool for establishing a business credit profile. New business owners usually have to use their personal credit and personal bank accounts to fund their business in the early days. it allows you to separate yourself personal loan Score by business. If your business currently has bad credit, you can rehabilitate it with a business credit card by making all your payments in full each month.
- facilities and awardsBenefits: Many business credit cards come with benefits, perks, introductory offers and rewards to encourage you to open and use your credit card. Business credit cards can specialize in certain types of rewards (eg, travel, cash back) that can provide even more benefits to your business.
- purchase protection: If your credit card falls into the wrong hands, you are generally not liable for purchases you didn’t make.
With so many credit card vendors to choose from, it’s worth taking your time to select the right card for your specific situation. Let’s review some popular credit card vendors and one popular card they issue for small businesses.
Choosing the Best Business Credit Card Vendor
Business credit card providers offer a variety of rewards cards to meet different business needs. For example cashback, reward points, no annual fee, travel, hotels, airlines, no forex fees, 0% intro APR, and more. It is important to understand which award will benefit your business the most getting the best credit card for your small business.
Apart from listing some of the best credit card vendors below, we also list a popular credit card issued by them, its annual fee, and its introductory offer. Keep in mind that fees and offers are always changing, so review the seller’s website for the latest information.
Traditional Credit Card Merchants
Traditional credit card vendors such as Visa, Amex and MasterCard and traditional financial services institutions such as banks can be popular choices for your small business credit card needs. Some vendors and card options include:
- American Express: American Express Blue Business Cash™ Card, $0 annual fee, $250 statement credit when you make $3,000 in purchases with your card in your first 3 months.
- chase: Ink Business Unlimited® Credit Card, $0 annual fee, Earn $900 bonus cash back after you spend $6,000 on purchases in the first 3 months from account opening.
- capital a: Capital One Spark Cash Plus, $150 annual fee, earn up to $1,000 cash bonus; $500 on $5,000 spent in the first 3 months, and $500 on $50,000 spent in the first 6 months from account opening.
- bank of americaBank of America® Business Advantage Unlimited Cash Rewards MasterCard® Credit Card, $0 annual fee, $300 statement credit online bonus when you make at least $3,000 in net purchases in the first 90 days from account opening.
- Wells Fargo: Wells Fargo Business Elite Signature Card, $125 annual fee (waived first-year fee), $1,000 cash back bonus, or 100,000 bonus points when you spend $25,000 in the first three months.
- us bankEarn $500 in cash back with the US Bank Business Triple Cash Rewards World Elite MasterCard, $0 annual fee. Spend $4500 on the Account Owner’s Card only in the first 150 days from account opening.
All of the credit card vendors listed above have multiple options for a variety of business situations. Review vendor websites for a complete list of card offers and options.
Airline and Hotel Credit Card Vendors
Airlines and hotels can also be business credit card issuers in conjunction with traditional credit card vendors. These cards can be a great option for traveling businesses. For example, some small businesses may value airline upgrades as a central component of their rewards program. Some vendors in the space include:
- DeltaDelta SkyMiles® Reserve Business American Express Card, $550 annual fee, Earn 60,000 bonus miles and 10,000 Medallion® Qualifying Miles (MQMs) after $4,000 in purchases on your new card in your first 3 months of card membership.
- United: United Club℠ Business Card, $450 annual fee, Earn 75,000 bonus miles after you make $5,000 in purchases in the first 3 months that your account is open.
- SouthwestSouthwest® Rapid Rewards® Performance Business Credit Card, $199 annual fee, earn 80,000 points after you spend $5,000 on purchases in the first 3 months.
- HiltonThe Hilton Honors American Express Business Card, $95 annual fee, earn 130,000 Hilton bonus points after you spend $5,000 in purchases on the card in the first 3 months of card membership, plus a free night award after you spend $10,000 in purchases on the card earn. Card in the first 6 months. Offer ends 12/21/22.
- Wyndham: Wyndham Rewards Earner® Business Card, $95 annual fee, and earn 45,000 bonus points after you spend $2,000 on purchases in the first 90 days.
Merchant account and credit card payment processing
In 2020, the The Federal Reserve released statistics regarding credit card usage in the United States., The report’s statistics show that credit cards are ubiquitous among American consumers. Here are some of the key findings of the report (as of 2020):
- 83% of adults had a credit card
- 98% of adults with incomes over $100,000 have a credit card
- 94% of adults with incomes over $50,000 have a credit card
Whether you run a gas station, an eCommerce website, a clothing retailer, or any other type of small business you can think of, accepting credit cards as a payment method is essential because most of your customers have them. and use them. Accepting credit cards involves a merchant service vendor/merchant account, commonly referred to as credit card processing companies.
When it comes to finding the best credit card payment processing service for your business, there are specifics to know, terms to know, vendors to research, and fees to understand. For example, whether you’re a high-volume processor or a low-volume processor, in-person versus online-only payments, and more. let’s review:
- feesCredit card processors tend to have fee-based pricing models and there are a number of fees to be aware of. They include but are not limited to cancellation fees, per transaction fees, software and equipment fees, startup fees, subscription/monthly fees, refund fees, chargeback fees (typically only a concern of high volume, high risk businesses), PCI fees, etc. Compliance fees, foreign transaction fees, and more.
- Personal Payment: If your business is going to accept in-store/in-person payments, you’ll need a point-of-sale terminal that has a card reader, commonly called a POS system. For entrepreneurs who operate a mobile business and accept payments in person (for example, a food truck or farmers market vendor), a cell phone can act as a POS system.
- virtual terminal: Virtual Terminal lets you accept credit cards online. It is essential for eCommerce businesses.
- vendorsSimilar to business credit cards, the credit card processing landscape is full of vendors. Finding the best vendors for your business requires research and is determined by the type of business you have. However, some popular vendors in the space are Helcim, Stax, Square, and Stripe.
Let us have a look at some of the best credit card processing companies:
Helcim offers interchange plus pricing. Interchange fees are based on two factors: the type of card used by the customer and the per transaction fee from the credit card processor. On average, Helcim charges 1.86% + $.08 for in-person transactions and 2.40% + $.25 for keyed/online transactions. They also offer all-in-one merchant solutions that include a POS terminal, a virtual terminal, invoicing, developer APIs, and more. On their website, they also advertise without any monthly fee and any hidden charges. For more information, visit their website: https://www.helcim.com
Stacks is an all-in-one merchant solution with a monthly pricing model that tailors its product to small businesses, large businesses, and industry. Their key value proposition is a customized solution for your business backed by a customer support team to ensure success. For more information, visit their website: https://staxpayments.com
An all-in-one merchant solution that also provides business solutions and management tools like payroll and email marketing. In-person transaction fees are 2.6% + 10 cents, online transaction fees are 2.9% + 30 cents, and manually entered transactions are 3.5% + 15 cents. Square lets you calculate your fees using their fee calculator: https://squareup.com/us/payments/fee-calculator
An all-in-one merchant solution that accepts a wide range of payment methods including international payments and ACH direct debit. Basic pricing for credit card transactions is 2.9% + $.30. Stripe offers customized pricing for interchange pricing, high-volume transaction businesses, and more. For more information, visit their website: https://stripe.com/
As an add-on benefit, these service providers have integration with Quickbooks, which means you can avoid manual entry and automate the transfer of sales activity to QuickBooks.
credit card processing fee
The two main pricing models credit card processing companies use are interchange-plus pricing and flat-rate pricing. Understanding how each works will help you make the best decision for your specific situation:
interchange-plus pricing: An adjustable-rate pricing model where the processing fee depends on the type of credit card your customer uses (i.e., Visa, MasterCard, Discover, etc.).
flat rate pricingA flat-rate pricing model means that there is one rate for each transaction your business processes, regardless of the type of credit card your customer uses.
Which is best for your business? It depends on your transaction volume, your average transaction size, and the percentage of total sales by credit card brand (for example, Visa is 65% of total sales, Mastercard is 25% of total sales, etc.) ). Many of the vendors we’ve listed above have processing-fee calculators or FAQs and the ability to schedule a demo to discuss your specific situation.