Best Business Credit Cards

How To: Identify the Best Business Credit Card

23 August 2021

If you’ve made the decision to get a business credit card, you’re probably wondering which is the best one for your business. With many options to choose from, it can be hard to arrive at a decision - but don’t worry. We’ve distilled it into simplistic terms, and below, you’ll find all the information you need to get the right business credit card.

In this article, we’ll cover the different types of business credit cards available, the key features of each and the criteria to consider when choosing for your business. What you won’t find here are the reasons ‘why you should get a business credit card’ in the first place. We’ve covered that in a separate article you can find here.

Getting Started

Finding the right credit card for your small business or start-ups can be difficult, as many business credit cards are targeted at larger enterprises that have more money to play with or long-standing credit history. Plus, without a track record or, in some cases (pre-revenue start-ups or perceived high-risk sectors.. yep, we’re looking at you crypto startups), banks won’t even consider the application.

Additionally, a lot of credit card providers will try to entice with rewards schemes - helpful in theory and certainly attractive - but do they help YOUR business run efficiently and effectively?

Depending on your business needs, the credit card you choose will offer different features and benefits. You might be after minimal reliance on personal finance history, a quick and easy one-stop finance solution, or simplified expense management.

Don’t worry; there is a credit card out there that serves your business needs. Now, to help you figure out which is best.

What features of a business credit card are actually important?

Ease of use

To put it simply, the best type of credit card for your business is one that you and/or your team (cardholders) can easily use. Currently, many businesses are using personal cards, debit cards, overdrafts or even cash to pay for expenses and, whilst these work, they each come with what we’ll refer to as ‘excess baggage’. For instance:

Personal credit cards make it difficult to separate business and personal expenses. You’ll usually have to pay a bookkeeper or accountant to delineate between the two at tax time. Debit cards are linked to your cash account, which adds an element of risk when providing these cards to employees or making online purchases, and adding cardholders is a huge hassle.

Overdrafts, whilst not a spending mechanism, can fill the void when it comes to cash flow. However, they often come at a premium rate.

An effective business credit card is easy to use for you and your employees and doesn’t expose you to the same problems, especially if it has the ability to integrate and streamline processes like receipt collection, transaction visibility, and automatic reconciliation with your cloud-accounting software. This can be a huge time-saver and gives SME business owners a simplified, holistic understanding of spending.

Straight-forward application process

Whilst it’s not a feature per se, a straight-forward application process is worth serious consideration. Most banks will offer a relatively easy sign-up, however, the application process can quickly become cumbersome. Typically, there’ll be a lot of paperwork involved (in this day and age...c’mon!), and sometimes a branch visit is required—a nightmare for busy small business owners.

However, with the emergence of digital banks (often called neobanks), this is changing. Applications are moving online, and the need for a ‘wet signature’ is being replaced. It goes without saying that you shouldn’t need to put up with cumbersome application processes any longer. Time is too valuable to wait in line at the bank.

Expense management

A growing business often has a myriad of business expenses to keep track of, and having the ability to track and manage each of these in the one place can be a helpful time-saving tool.

When it comes to businesses in their infancy, every cent counts - so having full financial visibility should be a non-negotiable for your SME. By streamlining the entire expense management process, business owners are able to track company expenses all in one place and remove the need for data entry when closing the books each month.

This proves particularly effective when you need a solution for company spending; the best business credit cards remove the need for expense reports, receipts and reimbursements, and allows business owners to easily manage expenses and operate to a budget.

Fees and rates

A business credit card shouldn’t just help you save time, it should help your small business save money too! Hidden fees, interest rates, and hefty annual sign-up fees can be frustrating, making the entire process more inefficient while you check charges and account for extra spending.

Fees and rates tend to align with the type of business credit card.

  • Low rate card: no annual fee, low monthly interest rate
  • Rewards: annual fee, high monthly interest rate
  • Frequent flyer: premium annual fee, high monthly interest rate
  • Charge card: premium annual fee, plus additional cardholder fee with 30-days terms.
  • **Subscription: this is a new category, whereby you pay a flat monthly subscription fee (like Netflix for business credit cards) and no interest rate

A business credit card that affords full transparency of fees and rates should be a top priority for any business. The best business credit card for a small business should understand small business owners needs, and any associated fees should be reflected.

Archa believes that when it comes to fees and rates - these should be clear, easy to understand, and minimal.

To reward or not to reward?

Another important consideration when it comes to fees and rates is what are you actually paying for? Some credit cards charge an annual fee, which can cost $20 all the way through to $700+. Typically, the higher the cost, the greater the reward (points!). The real question here; “are reward points worth it?”

There isn’t a more polarising argument when it comes to credit cards than reward points. Some are all in. Whilst others feel the benefit is negligible. Now, we’re not here to provide a ‘yay’ or ‘nay’ when it comes to points; we’re here merely to lay out the facts.

Reward points can save you money on travel expenses, including flights, accommodation and even entertainment. You can also redeem points for entertainment, gift vouchers or recreation, which can double as a way to reward your staff - but be mindful, this will need to be declared.

Where reward points are less useful is when they’re accumulated and go unused. Why? A card with more ‘perks’ can often mean a higher fee, so if your SME doesn’t require things like lounge passes or frequent travel, then you’re unlikely to make use of a rewards scheme; you might be better off using a no-frills credit card, which means lower annual fees.

Ask yourself: will reward points play a significant role in your business?

Cashflow

Invoices get paid at the end of the month. Bills get paid mid-month. Suppliers want to get paid in advance. Unexpected purchases crop up at the eleventh hour. If this sounds familiar, then cash flow assistance should be a priority when choosing your business credit card.

All business credit cards will provide you with, well, credit; however, that can come in different forms. You need to consider whether a charge card will meet your needs (full balance due each month) or whether you will carry a balance at the end of the month. If you need longer than a month to repay the full balance, then you’ll want to check the number of interest-free days included.

In addition to the credit aspect, other in-app tools and features can help you manage cash flow. Whether it be simple notifications to inform you of money coming in or going out, tools to move money between accounts efficiently, or simply being able to easier categorise your spending. Accessing the right business credit card can help you keep on top of spending in many different ways.

No matter the type of assistance your business requires, maintaining positive cash flow is essential to giving your business its best shot at success.

Ask yourself: how long do I need to repay the balance? Does the card include features that will help me keep on top of spending?

How Archa business credit cards work

You’re most likely wondering - is Archa the best business credit card for my small business?

Archa’s business credit cards have been designed with small business owners in mind. We know that they’re short on time, so we’ve made a credit card that not only provides credit but makes controlling and managing expenses simple. We’re here to make life easier with a simple, data-driven approach that puts YOU (hello, business owner) in a better position to grow your business without the distractions of financial administration.

Archa has an easy to use mobile app. Compatible and integrated with your cloud accounting software, Archa allows businesses to track and better understand spending thanks to detailed yet simple analytics and reporting. The application process is 100% online, and if you qualify, you can get started in a matter of hours.

With Archa, there’s full transparency, and when it comes to expenses, we have you covered.

  • Pay your bills on time
  • Bills paid
  • Manage employee spending
  • A flat monthly subscription fee
  • No interest rates

Archa thinks… So you’ve figured out what your small business actually needs, and you’ve prioritised your specific needs over the unnecessary bells and whistles.

If your business is growing rapidly and spending in such a way that a rewards program would be of use and you’re able to cover the larger associated fees, you might like to look into a corporate credit card from a large financial institution.

However, if your small business needs a simple yet effective spend management tool that affords cash flow understanding, no-nonsense fees and rates, is easy to use and offers full transparency and visibility - you might like to try our corporate credit card. Archa might just be the business credit card to help your SME grow.

Try the beta version: HERE

Corporate Credit

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