How I Am Choosing A Business Credit Card

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I have always thought of business credit cards as quirky product. They seem to just be a “me too” approach to the standard consumer cards. For my purposes, I was happy to receive both versions when there was a card offered with a fantastic sign up bonus.

Times Have Changed

As I write more, I am starting the process of taking my earnings a lot more seriously. Ultimately, I think I will actually need a business credit card for its intended purpose. I will use this card to separate business expenses from personal ones, easing my paperwork burden when it comes time to do my taxes. As a credit card expert, I thought my readers could benefit from hearing about my decision making process in choosing the best business card.

Factors I Am Considering

  • Expenses. I probably don’t have a lot of business expenses that I can claim. There will be things like phones, Internet, office equipment, and a little bit of travel. Let’s say I ballpark my annual business spending at $10,000 a year for now.
  • Financing. I don’t plan on managing my business credit card any different than I have my personal credit cards. I will always pay my balance in full, and never owe any money for interest. Therefore, I don’t even bother to examine factors such as APR or balance transfers.
  • Foreign Transaction Fees. Some of my travel will be international, so a card with no foreign transaction fees would be nice, but it is not essential. When I travel outside the US, I can continue to use either of the two cards I now have that don’t charge these fees, and just itemize the expenses later.
  • Rewards. Obviously, I will be seeking the maximum value possible from credit card rewards. Since my annual spending is somewhat low, I have far more to gain from a sign up bonus than I might from my annual spending, at least for now.

Evaluating The Top Business Cards For My Purpose

  • American Express Delta SkyMiles Platinum Business.  This card offers a mere 25,000 miles as a sign up bonus (20,000 after the first purchase, and 5,000 for adding an additional cardholder.)  That is a modest reward, especially as they are in hard to use Delta miles. There is no annual fee the first year, but after one year I will get a free domestic companion certificate, probably worth $300-$500 to me.  The checked bag fee waiver may be nice, but only earning one SkyMile per dollar spent is weak, and I rarely spend much for paid Delta flights.
  • American Express Starwood Preferred Guest Business. This is a fantastic card, and their standard offer is for 10,000 Starpoints from the first purchase, and 15,000 additional when you spend $15,000 in six months. Unfortunately, that goal seems out of reach if I were to actually use this card only for business purposes. Considering that I already have the personal card, the $65 annual fee will probably be an unnecessary expenditure, even though it is waived the first year.
  • Southwest Airline Premier Business Visa. They currently have offers for 50,000 points for their business card, worth $830 in fares. The annual fee is $99 a year, which is equal to the 6,000 bonus miles you receive when you pay it. Being a Visa, I will always be able to use it rather than just most of the time, like an American Express. Right now, this is the leading contender.
  • Other Cards. I looked for a British Airways Visa for business, but couldn’t find one. Another 50,000 miles of their would have been great, as would the lack of foreign transaction fees. I also looked for a business version of the Chase Sapphire Preferred, but it doesn’t exist. This card has a great sign up bonus and no foreign transaction fees, and I thought it might be worth trying out. There are a variety of cash back cards out there, but since my spending will be so low, there really isn’t much to be gained. If if I got 2% cash back on my $10,000 of annual spending, that is only $200, a quarter of the value of the sign up bonus of the Southwest card.’

Conclusions

I am happy to actually use a business card for my business, but I still expect a huge reward. Right now the Southwest card appears to offer the best sign up bonus, as well as very useful spending rewards worth 1.66 cents per dollar. If you are considering using a business card for your work, what factors are you considering?

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