Alternative Ways to Choose the Best Business Credit Card

October 29, 2020

In a competitive business landscape, small- to medium-sized businesses need to take advantage of every resource at their disposal to get ahead. With helpful options for both spending and saving money, your small business credit card can be one of the most valuable resources at hand.

Many companies simply look for the card with the best rewards points, or just default to what other companies are doing. In doing so, they miss out on potential opportunities.

Below, we’ll discuss the different credit card types along with three methods you can employ to find the best business credit card for your company:

  • Method 1: Identify your company needs first, then choose a card to match
  • Method 2: Research available business credit card benefits and features, then prioritize them
  • Method 3: Consider how a particular credit card can empower your accounting and finance team

Method 1: Identify Your Company Needs First, Then Choose a Card to Match

All businesses need capital to operate, and often, that comes in the form of credit. According to a National Small Business Association study, 43% of small- to medium-sized businesses struggle to secure funding. So, they turn to credit.

While the demand for business credit is undeniable, the specific reasons a company needs business credit and how they will utilize that credit are unique to the company.

With this method of finding a small business credit card, ask yourself:

  • How much credit do you need? – Different creditors offer different limits. If you’re looking to make a single large purchase, paid off over a long term, a loan may be your best option.
  • How flexible is your payment schedule? – Some companies utilize credit as more of a short-term loan, paying off balances near immediately. A charge card may be your best bet.
  • How important is travel to your company? – Certain cards offer travel rewards and partner programs to help pay for or recoup airline costs. Choose a card issuer that offers travel rewards, no foreign transaction fee offerings, and other incentives if your company requires traveling.
  • Do you need your business credit card to facilitate real-time accounting? – Some cards integrate into your existing accounting platforms or offer their own software to help control company spend.

Answering these questions helps to establish a baseline understanding of what you need. Once that’s done, you can start to compare the various types of cards available to you as a small business owner.

Quick Note: Charge Cards vs Credit Cards

If this is the first time you’re searching out a line of credit for your business, you may not know there are other options available apart from credit cards.

The most common differentiator? Charge cards.

A corporate charge card offers that same access to credit but with a shorter term limit. Balances cannot be carried from month to month, since the total is due by the end of each billing period. In exchange for fully paying your bill, you don’t have to pay additional interest.

Method 2: Research Available Business Credit Card Features, Then Prioritize Them

The second method entails focusing first on outside research.

Scan all available credit issuer options and compile a list of their particular offerings and perks. After, you can compare features to see which ones make the most sense for your company. Some of the most common benefits of business credit cards you’ll come across include:

  • High credit limits – Business credit cards often offer a high credit limit, relative to personal lines of credit. For maximum flexibility, you should seek out the highest credit limit you can find.
  • Rewards programs – Special rewards like cash back, points, miles, or other perks help you save and earn direct value as you spend. Seek out a card with the best flat value, or with rewards program categories that correspond to your regular spending. When in doubt, direct cash rewards is a simple, straightforward rewards program.
  • Partner perk programs – Some cards come with special discounts and deals with vendors and retail partners. Find a small business credit card that helps you save on goods or services you would otherwise be buying already.
  • Costs to operate – Start up fees or a high annual fee can make a business credit card expensive. Ideally, you should seek out a card you can use at low or no cost.
  • Number of cards you can issue – Do you need to give an employee card to each person on your team? Some card companies limit the number of physical or virtual cards you can issue. Or, each issued card may cost a certain amount. Look for a card company that offers unlimited physical and virtual cards at little to no cost to you.
  • Interest rates (APR) – Balances carried on credit cards are subject to a compounding interest rate, also known as annual percentage rate (APR). You want the lowest interest rate possible.

All of these features offer value, some more so than others. It’s important to understand the granular details of a given card, and which ones are most valued for you as a small business owner.

The Most Important Features You Should Prioritize

You should look for features that maximize your potential savings and overall efficiency at the lowest cost to you. That goes for upfront costs, as well as incentivized spending and saving mechanisms.

For example, when looking at a points rewards program, you’ll want to convert the points to the real cash value it provides. Then compare this to other miles programs and direct cash back programs available on other cards. Additionally, you’ll want to be aware that the points system incentivizes and gamifies spending in certain categories by offering point multipliers for specific purchases. If you want to earn cash rewards or other rewards points from your business expenses, make sure your card perks align with your line of business.

But value isn’t just raw dollars saved. It also includes intangible efficiencies.

In another example, consider a card that allows you to generate unlimited individual cards—physical, virtual, or both. You could then set limits on each card and dole them out to employees as needed to gain further control over internal business expenses. There’s no direct dollar value associated with this. But being able to designate cards for individual spending categories helps simplify recordkeeping. Time and effort saved helps your teams focus on more pertinent business matters.

Method 3: Consider How a Particular Credit Card Can Empower your Accounting and Finance Team

The third and final method follows a more measured approach.

Rather than prioritizing either internal needs or specific features, the idea is to tackle both at once. By considering fit, you shop for a card with features that cater to your company’s specific needs. Most accounting and finance teams are forced to spend 5-15 days closing the books each month. That process involves many repetitive and frustrating reconciliation tasks.

Consider a smart corporate card with accounting software integrations that will help your company operate more efficiently. It should also integrate easily into the software your business already uses. That goes for accounting programs, like Quickbooks and Xero, as well as communication programs, like Slack. That way, there’s little to no adjustment and workflows are streamlined.

Business credit cards can do much more than function as a loan. And their features aren’t limited to savings initiatives. They also empower spend management and easier bookkeeping.

This empowerment can extend to every employee, making the whole team involved in the company’s financial goals.

The Benefits of Automation and Spend Management

One of the best ways for a business line of credit to empower your business is through automated spend management. Paired with powerful analytical tools, smart corporate card and spend management programs can automatically provide insights that turn into real dollars saved.

How does it work? Components of an effective spend management platform include:

  • Real time visibility – You should be able to track business expenses as they happen. There’s no need to wait for reports at the end of the month to make adjustments. You should be able to sort expenses according to card user, spend category, and other factors, placing the transaction directly into the general ledger.
  • Receipt management – When an employee makes a purchase using your card, they should be prompted to snap a picture of their receipt and upload it to the platform. That way, reimbursement and end-of-month bookkeeping are neater and faster.
  • Instant spend approval – To control spending at the level of individual purchases, you can integrate approval into your messaging platforms. With the press of a button, managers and executives can approve spend. This also might eliminate expense reporting processes for employees entirely.
  • Analysis and recommendations – Your spend management platform should also automatically recommend ways to save based on regular (or irregular) monthly spend. This could be something as simple as finding duplicate SaaS spend.

With robust tracking and analysis, a spend management platform helps you understand and control company spend. Meaning, the best business credit cards don’t just fit; they empower your business.

Ramp’s Smart Card Program: Your Best Option

Whichever method you prefer, we’re confident that Ramp’s smart card is the right card for your business. With an industry-leading spend management platform, as well as flat, unlimited 1.5% cash back, we empower saving without incentivizing spending. Plus, Ramp can help power your business at no cost to you, with no startup or annual fees and zero interest for small businesses.

Ready to empower your business? Applying is easy.


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