How to Choose a Business Credit Card

A good credit card for your business can make your life easier. It offers rewards, more flexibility, and security when transacting, which are all good reasons to give it a closer look. However, with so many options out there, it can be hard to separate the good from the bad. The best way to figure out which business credit card is right for your needs is to take a close look at what’s available.

Before you pick a business credit card, make sure you consider the specific needs of your business. If you are looking for a business credit card, then you’ve come to the right place! In this post, you’ll find all the information you need to select your perfect option. We take you step-by-step through the process of choosing a business credit card. The result will be an informed decision that can be of enormous benefit to your business.

What is a Business credit cards?

Business credit cards are tailored for businesses, but they have similar features to those of personal credit cards. A business can use the card to cater to everyday spending, earn rewards, and help build credit.

Business credit card

How does a business credit card work

Business credit cards work the same way as personal credit cards. Your card will have a maximum credit limit. This is the maximum you can spend. As you use the card, the limit decreases. The limit will go back to the maximum once you make payments.

The business owner may have to give a personal guarantee. This means the business owner may have to pay the card expenses if the business fails to do so. Business credit cards have multiple advantages, including the following:

  • Higher credit limits than the personal credit cards
  • Enables you to separate business and personal expenses.
  • Get rewards and cashback.
  • Purchase protection and discounts
  • Gives you up to 30 days of interest-free business expenses.
  • Improves your credit score

Factors to consider when choosing a business credit card

Before you select a business credit card, there are important factors you should consider. Here are the main ones:

Annual fees

Most business credit cards charge an annual fee. It’s important to review the annual fees you will pay. A rule of thumb is that the more features and benefits the card has, the higher the annual fee.

Interest rate (APR)

It’s important to choose a credit card with a lower annual percentage rate. While the ideal situation is to pay any credit card debt before it begins to accrue interest, it’s best to choose a credit card with a lower interest rate.

In case your business runs into headwinds, you will need to pay the minimum amount on your credit card. Choose a card with the lowest APR.

Rewards

Earning rewards on your credit card will save you money. You can redeem the reward at gas stations or redeem it as cash. Each card has its reward system, and it’s important to find out how the system works before you select a credit card.

Consider where you are likely to use the card and select one that offers rewards at those entities.

Additional features

Some cards offer additional special features. Such features come in handy if something goes wrong while traveling for work or attending industry conferences or events. Here are some of the unique features you should look into:

Travel protection

Check whether the card offers travel accident insurance, baggage delay insurance, or roadside assistance.

Travel benefits

Travel benefits such as airport lounge access, and complimentary concierge services make business travel easier.

Protection

Check for extended warranty protection or purchase protection such as cell phone insurance.

Employee credit cards

Look out for credit card companies that offer your employees cards at no charge.

Account management tools

Check what money management tools come with your credit card of choice.

Discounts

Check for cards that offer discounts on products you regularly purchase.

What is the difference between a personal credit card and a business credit card?

There are two main types of credit cards: business and personal. The terms “business” and “commercial” are also used to describe some types of credit cards.

 Business credit cards are designed for use by a person or organization that conducts business transactions. A business may be a corporation, partnership, or sole proprietorship.

 Personal credit cards are issued in the name of an individual consumer and can be used for personal or business purchases. They often carry rewards programs, but they may also have higher interest rates than business cards do.

The main differences between personal and business credit cards include:

  • Credit limit: Business credit cards typically have higher limits as compared to personal credit cards. Credit card issuers consider business income and personal income when issuing business credit cards.
  • APR terms: Business cards have a shorter payment term as compared to personal credit cards.
  • Consumer protection laws: Consumer protection laws are stronger with personal credit cards as compared to business credit cards.
  • Rewards programs: Some businesses prefer cash-back rewards over travel rewards because they can spend their money on anything they want rather than having to book travel through a specific airline or hotel chain.
  • Interest rates: Businesses with good credit scores may qualify for low-interest rates on their new accounts, while those with poor ratings may have higher interest rates than consumers.

Reasons to obtain a business credit card

The top reasons to get a business credit card are:

  1. You can earn rewards for business expenses. You may be able to earn points or miles that you can redeem for travel or other perks, such as gift cards or merchandise.
  1. The card provides you with a line of credit that is separate from your finances. If you use the card responsibly and pay it off each month, this will help build your credit history.
  1. You can track expenses and set spending limits on the card online or through an app. This will help you keep track of how much you’re spending on business purchases and allow you to monitor your spending habits over time.
  1. Business credit cards often have more flexible payment terms than other types of cards, such as personal cards or charge cards (which require full payment every month). For example, some business cards have no annual fee and no foreign transaction fees, both features that make them attractive to small-business owners who travel abroad frequently and spend money overseas with their cards every year.
  1. Business owners can sometimes get special rates on loans if they use their credit card as collateral (a practice known as “margin”).

How to choose a business credit card

The selection of a business credit card is an important decision for your business. The card you select will be used to make purchases on behalf of your company and can impact your ability to obtain future financing from banks and other lenders.

 To select the right business credit card, follow these five simple steps: 

  1. Evaluate your needs.

Before you start looking at different cards, it’s important to know what kind of features and services are important to you. Do you need a rewards program? Is cash back more valuable than miles? What about travel insurance or concierge services? Knowing what your business needs will help narrow down your options and make the process much easier.

  1. Compare the fees and features of different cards.

Consider the features and fees of various cards and choose one whose benefits align with those of your business. Choose a card that offers the lowest fees and the best features for your business. Here are some of the benefits to look out for.

  • Financing offers such as periods of 0% APR on new purchases give your business much-needed leverage.
  • Purchase protection and insurance
  • Luxury perks such as access to lounges when traveling
  • Account management tools to help you make better financial decisions.
  1. Consider how much you’re willing to spend on fees.

You need to assess the cost of the credit card. The ideal situation is to pick a card with the lowest fees. Review the options available and choose the one with the lowest fees.

  1. Check reviews and ratings

Once you have identified some basic requirements for your business credit card, it’s time to take a closer look at the details. The best way to do this is by reading reviews from other businesses that use these cards as well as checking out their ratings from third-party sources like Consumer Reports.

Reviews and ratings provide valuable insight into how satisfied customers have been with their experiences with each card issuer over time.

Requirements to get a corporate credit card or business credit card

To qualify for a business or corporate credit card, you must have the following documents:

  • A duly filled application form
  • Bank statements for the last 6 months
  • Memorandum and Articles of Association
  • Certificate of Incorporation
  • Audited Accounts for the last 2 years
  • Board resolution from the account signatories
  • Duly filled out credit card application form of each signing staff

The best business credit cards in Kenya

Business owners need to research the best credit cards for their businesses. Ideally, you should select a card that suits your business and offers the best credit card rewards. Here are some of the best business credit cards.

Card IssuerFeaturesFees
NCBA Business Credit cardUp to 50 days interest-freeAvailable in Kes and USDFlexible credit limits on employees’ accountsOffer comprehensive travel insurance such as a 24-hour hotline, travel delay insurance, medical and legal referralsWaived joining fees up to 31 Dec 2022.An interest rate of 3.5% per month
Absa Bank business credit cardAccepted in over 30 million outlets worldwideRequires a guarantee in form of a deposit equivalent to the card limit.
GT Bank Corporate credit cardUp to 45 days interest-free 
KCB Bank Corporate credit card Joining fees of Ksh 4,000Annual fees of Ksh 4000An interest rate of 3.5% per month Cash advance interest of 6% of the amount accessedLate payment fees of 5% on the outstanding amountKsh 1000 over limit feesMinimum repayment of 10%

When picking a credit card for your small business, you are going to have to take a few things into account. The most important thing is to verify that the card you select will work best for your business type and the variety of products that you sell. By looking at various cards with different interest rates and fees, you can quickly determine what would be the best fit for your business.

Be sure not to get overly excited by all the benefits of some great rewards cards. While there are many perks, it’s important that your credit card can help grow your business.

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