While selecting a credit card might seem like a rather minor concern given everything else a small business owner must tackle, its importa...

While selecting a credit card might seem like a rather minor concern given everything else a small business owner must tackle, its importance should not be overlooked. Even though small business owners are generally held personally liable for business credit card use and information about this use is typically relayed to their personal credit reports, business credit cards are not governed by the same laws as general-consumer credit cards. That means things like universal default and double-cycle billing are fair game, and issuers are free to arbitrarily increase interest rates on existing business credit card debt if they so choose. Now, this doesn’t mean you shouldn’t use a business credit card, but it does mean that you must carefully choose the cards with which you fund your company and make everyday purchases if you are to enjoy any sort of debt predictability.

So, the million dollar question is: How does one go about finding the right business credit card?

Intended Usage

It all starts with the way in which you plan to use your card. Given the level of risk associated with revolving a balance on a business credit card and how detrimental a constant threat of unexpected cost-of-debt increases would be to your ability to allocate funds and create any sort of reliable long-term business plan, you must use a personal credit card for any business expenses that will not be paid for in full by the end of the month. In order to save on interest, find the 0% credit card with the longest introductory period possible.

It’s important to still use a business credit card for purchases that you will quickly pay for in full, however. Unlike personal credit cards, business credit cards allow you to easily track and manage company spending as well as give custom-limit cards to a large number of employees while earning rewards on their spending. When searching for the business-credit-card half of this two-card strategy, focus on maximizing rewards.

But what happens if you want to use a single credit card?

Issuer Awareness

If you covet the convenience of using a single credit card for all of your company spending, your card’s issuer becomes extremely important.

Card Hub recently conducted a study on the business credit card policies of the 10 largest credit card issuers in the U.S., and discovered that Bank of America was the only major issuer to voluntarily apply all the major provisions of the new credit card law, the Card Act, to its business card offerings. That means favorable payment allocation for cardholders with multiple balances, no universal default, a mandatory 45 days notice before changes to key account terms, no double cycle billing, and most importantly, no interest rate increases on existing debt unless you become 60 days delinquent. As a result, BofA is, by our measurements, the best business credit card company in the country, and if you want to use a single card for all of your small business needs it should most likely be a Bank of America business credit card or a card from any other local bank or credit union that has voluntarily extended all CARD Act protections.

Final Tips

You now have a general game plan for selecting the best business credit card for your company’s needs, but there are a couple more things you need to know.

First, many small business owners simply assume that the credit card for which they’ll qualify depends on their company’s credit standing. While that does factor in, your own personal credit score is far more important and should dictate whether you’ll apply for a business credit card for excellent credit or a secured business credit card, for example.

Finally, if your business takes you overseas either through travel or dealings with foreign vendors, make sure your card doesn’t have foreign transaction fees. Over 90% of all credit cards charge 3% fees for transactions processed outside the United States, which means the costs associated with an overseas business trip – including flights and hotels booked through foreign companies while you’re still in the U.S. – could be unnecessarily high.