How many business credit cards should I have?

For small companies, business credit cards can be something of a lifeline, helping to cover critical business expenses as they arise—and build credit to boot. However, as an organization grows, so will its expenses, which begs the question: how many business credit cards should you have? 

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The short answer is that it depends—specifically, on what your company’s needs are, and how reliably it can pay them off. There are upsides to carrying two or more business credit cards beyond the increased spending power, like sign-up bonuses and rewards programs. 

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In this article, we’ll discuss the most important considerations for using multiple business credit cards, so you can decide how many you should have. 

Should you have multiple business credit cards?

Having multiple business credit cards can be advantageous for managing cash flow, organizing expenses, and earning perks—all important upsides for any small business. Additionally, having multiple cards can increase your company’s total available line of credit, which can be useful in the case of emergencies or unexpected expenses. 

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However, it's crucial to manage these accounts responsibly to avoid falling into debt or negatively affecting your business's credit score. After all, American Express, Capital One, Chase, and the rest of the major business credit card issuers report in to the same business credit reporting agencies.

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Some small business owners might find that one or two cards are enough, while others might benefit from having several cards with different purposes and rewards programs. For example, if your small business has a lot of travel expenses, you might consider using a card with better travel rewards in addition to your primary credit card.

Factors to consider when deciding how many credit cards to have

Before deciding how many credit cards you should have, you’ll want to consider the following factors:

Credit score

Your company’s credit score is a major factor to consider when applying for multiple cards. According to Dun & Bradstreet, a business credit score of 80 to 100 is considered low risk, which is generally a good credit score. A strong credit report will give lenders an indication of your ability to manage credit responsibly.

Debt-to-income ratio

Your debt-to-income (DTI) ratio measures how much debt your business has in comparison to your income. A higher DTI can make getting approved for multiple cards difficult, so keeping yours as low as possible is important.

Business size and revenue

The size and type of your business can also influence how many cards you should get. Larger businesses, for example, may be able to get approved for more cards than smaller ones. Additionally, your business revenue can be a factor in determining approval.

Credit utilization rate

Your credit utilization ratio is the amount of credit you use relative to the total amount of credit you have available. Generally, it’s ideal to maintain your credit utilization rate at around 30% or lower. This shows lenders that you’re managing your credit responsibly.

Credit history

A longer, positive credit history will make applying for business credit cards easier and may result in better terms or credit limits. The length of your business credit history should coincide with the age of your business, or at least the timeframe when your business first began using credit. Lenders will look for an established business credit history before approving multiple cards.

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The benefits and drawbacks of having multiple business credit cards

As with any financial decision, having multiple business credit cards has advantages and disadvantages.

Benefits:

• Spending power: Multiple cards can allow you to make larger purchases or spread out costs over time.
• Increased rewards: Many business credit cards offer rewards, such as cashback or points, for purchases made with the card. Having multiple rewards credit cards can mean more savings.
• Greater convenience: With multiple credit cards, you won’t have to worry about running out of available credit when you need it most.

Drawbacks:

• Extra costs: Managing multiple business credit cards can be expensive, as there may be additional fees and interest charges.
• Higher credit utilization: Having multiple cards can increase your credit utilization rate, which could hurt your credit score if it gets too high.
• More responsibility: Managing multiple cards requires careful planning to make sure you don’t miss payments or exceed your credit limits.

How many business credit cards can you have?

There isn’t an exact formula to determine the number of credit cards a company should use. The best way to decide how many business credit cards you should have is to assess your financial situation and determine which cards best meet your needs. 

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Remember, it's important to handle credit card debt carefully and stay within your credit limits. Doing so will help ensure you get the maximum benefit from your credit cards and protect your business credit score.

Tips for managing multiple business credit cards

While having multiple business credit cards can offer some benefits, sensibly managing them is key. Here are a few tips to help you manage your cards effectively:

• Establish clear spending limits: Decide in advance the maximum amount you’ll spend with each card. This can help you avoid overspending and minimize your credit utilization rate.
• Pay your bills on time: Missing payments can result in late fees, penalty interest rates, and a lower credit score. Establish a budget and payment schedule to make sure you make all your payments on time.
• Know the terms and conditions: Read through each card’s terms and conditions to understand the fees, rewards, and other relevant details.
• Track your spending: Track all your purchases and payments to make sure you stay within your spending limits and budget.

Manage your cards in one place with Ramp

Whether you decide to use two or ten business credit cards, Ramp can help you manage them all. With Ramp, you can easily keep track of all your business cards in one place, and view updates in real time. Our comprehensive software combines corporate cards, expense management, bill payments, accounting, and reporting, streamlining your financial processes.

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You can gain control over your spending with Ramp’s unlimited virtual credit cards, zero-touch expenses, and rewarding transactions—all with no annual fees. Managing your business finances with our automated software can save your business time and money.