Most small business owners don’t think a lot about how they’re paying expenses. Sure, you get concerned about outflows exceeding income, lament having to pay some bills, and grumble a bit when costs seem too high. That’s not giving the issue thoughtful consideration, though. Surprisingly, there are a lot of card options out there right now with no fees and decent rewards. I stumbled on a small business credit card find at a time when I really needed it.
If you’re paying annual fees or don’t even have a business credit card, stop that. It’s important to separate your personal and business expenses. Having only checks, cash, or direct deposit options for transactions is challenging. A good business credit card is handy to have.
Rewards programs can add up quickly
The best business card I’ve found is Chase Ink*. This card offers a $500 reward if you spend $3000 in the first 90 days. Cashback is also awarded at 1.5% on every dollar charged for an unlimited period – including during this initial reward spend. Many cards reduce or terminate cashback once you reach a certain spend cap. Plus, it offers 0% interest for a year.
These days, credit card companies are tripping over each other to get your business. If you don’t have a rewards card or have one that makes you jump through hoops to collect, consider another. Of course, credit scores are a factor. Most companies will look at the history of the owner of a small business to determine offers and interests rates.
The other great thing about the Chase Ink card is rewards are applied to the card balance as soon as they’re earned. That includes the $500 bonus. Many cards demand you amass a minimum balance for payback then require more aggravation trying to figure out how to get it.
Like many small business owners, I had a credit card through the bank that held my business checking accounts. When I noticed they offered no rewards, I contacted my banker to fix this. He set me up with a rewards card. Yea!
I later discovered the card required minimum $25 increments earned before you could collect the rewards. Then there was no way to automate distributions. This meant too much time spent getting into the right spot on the website, navigating a structure that seemed designed to confuse, and being led through a bunch of sales pitches for product purchases. Boo!
The upside to being flooded out
Water levels in my office rose to two feet during Hurricane Michael. As I envisioned the nightmare ahead of me with FEMA flood insurance for the house and an office that likely wouldn’t be covered at all, it was time to get creative about bridge financing.
Sure, I could borrow from the bank at 6%, but there was no telling how much spent would be reimbursed or how long it would take to get a check. As it turned out, more than six months passed before FEMA processed the claim. The interest on that borrowed money would have been significant.
About the same time of the storm flood, I noticed I was getting a flood of credit card offers in the mail promising cash back and 0% financing for a year or more. Yippee – money to offset some repair expenses! It was nice to have the 0% interest float time to raise the money to cover house repair costs too.
I’ll cancel most of the cards once I pay them off when the 0% period ends. The Chase Ink card, though, is a keeper. Customer service has been good and the seamless transfer of rewards to the credit card balance each month makes it easy. That quick $500 cash back was welcome too.
If you’re going to spend the money anyway . . .
Whether you have big purchases planned for the near future or will merely use a credit card for normal monthly expenses, it makes sense to get one with incentives. There are other cards that offer cash rewards in the $100-$200 range for smaller initial spends, but do read the fine print on these as there can be some gotchas.
The 1.5% unlimited cash back on all purchases Chase Ink offers is the best I’ve found, but maybe you’re more focused on travel points or product purchase points? There are cards offering that too. Me, I like cash; so monthly money toward the card balance is my choice. I also don’t want a card that costs me time trying to redeem points.
This small business credit card find that put a big smile on my face. It’s still there as I continue to enjoy 0% interest on money borrowed. Next week I’ll give you five tips for decreasing small business owner expenses.
*Yes, this is a referral link and I do get compensated if you use it and get approved for a card, but that’s not why I’m recommending it. My experience with the product has been excellent thus far and the best small business credit card deal I’ve found.