What Is a Business Credit Card and How Does It Work?
Business credit cards help manage cash flow and build business credit by earning rewards on expenses and providing free employee cards with spending controls. They operate similarly to personal credit cards: you charge expenses, pay down the balance, and repeat.
Key Features of Business Credit Cards
- Most have a set credit limit and require a minimum monthly payment.
- Paying the full balance avoids interest charges; otherwise, interest ranges from about 18% to 28% APR.
- Business charge cards have no preset limit but require full monthly payment, ideal for businesses with strong cash flow.
Benefits of Using a Business Credit Card
- Earn cash back or travel points on every dollar spent, usable for personal or business needs.
- Receive discounts on business expenses from brands like Adobe, Dell, Lyft, and Apple.
- Many business travel cards offer statement credits for flights, checked bags, and more.
- Access higher credit limits, sometimes starting at $10,000, and larger sign-up bonuses than personal cards.
- Build and strengthen your business credit profile over time.
Business credit cards "offer literal perks, like discounts and rewards, as well as a host of other benefits."
Using a business credit card strategically can enhance your company’s financial flexibility and reward potential.
Author’s summary: Business credit cards simplify expense management, offer valuable rewards and discounts, and help businesses build credit with flexible payment options and higher credit limits.