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My friend Matt started a business and wanted to know what the best business credit card was. I’ll list what I consider the best options below but in general here’s what I look for:

• No annual fee: If you’re a startup, you want to keep costs as low as possible until you get your revenues up. Having to pay a hundred dollars a year, as little as that sounds, is a hundred dollars you can’t put back into your business to grow it as quickly as possible. Just as I wouldn’t get a consumer credit card with an annual fee, if I was a startup I’d avoid a card with an annual fee. Fortunately there are plenty of options.
• Rewards: I look at rewards from two angles. First, I want to get better than 1% rewards or cash back in categories that I will be spending a lot in such as office supply, advertising, etc. Second, if I’m getting points, I want to ensure the reward catalog has products I would buy with my own money. I don’t want gift cards to chain restaurants I never visit. I don’t want electronics or DVDs I can buy for cheaper online.
• Promotional APRs: Many businesses have been built on the shoulders of consumer credit card debt. I don’t advocate going into debt to start a business, but if you’re going to then it’s best to get a credit card that will give you 0% APY for six or twelve months on your purchases or balance transfers. These offers are becoming rarer because credit card companies are reducing their risk but they still exist.
• Don’t use your consumer credit card: You can use a consumer credit card as a business card but be sure to use it only for business expenses (even this is suspect, depends on who you ask). If you don’t properly separate the two “worlds,” then you could run into liability issues down the road. Be sure to check with a business attorney or your accountant though.

Best Business Credit Cards

Citi has a new AT&T Universal Business Rewards Card ^[3] that offers 0% APR on purchases for six months, a great benefit if you’re just starting a business and need some start-up capital. It also gives you 5% rewards on AT&T products and services purchased through AT&T, to help defray the cost of some of your utilities. You can also get 3% rewards on purchases at some office supply merchants, gas stations, and “professional services.” Finally you get 1% rewards everywhere else.

This is the card I’d recommend if you’re in the market for a business credit card. I list the other two options for completeness sake but this Citi card is what I would recommend because you don’t run into the problem of card acceptance.

• What I like: I like that it’s a VISA card, so it’ll be accepted everywhere.
• What I dislike: Citi’s reward catalog leaves much to be desired. I usually convert points into student loan payment checks but if I didn’t, there’s not much in there that I would want to spend my points on. You can review the catalog to see if there are things you like because there’s nothing worse than having a boatload of points and feeling like you must convert it into something you can’t use.

I use the American Express Business Gold ^[4] because I took advantage of a $250 promotion ^[5] they ran a few years ago. Since then, I’ve stuck with the card and it’s $125 annual fee because they give a 5% discount on Yahoo Search Marketing advertising, I’ve accrued a ton of points and their rewards catalog actually has things I want (at favorable point conversion rates). They’re one of the most well known names in the business card world because a lot of large corporations use them but there are some big downsides, such as the annual fee and the less than universal acceptance of AMEX cards.

I would not recommend this card for a startup. You need to keep costs low and having to pay $125 a year, as little as that seems, is money wasted.

• What I like: I like their rewards program and how I can convert points to Southwest Rapid Rewards flight vouchers ^[6]. It’s rare that I see something I want in a rewards catalog. It’s even rarer for the points conversion to work in my favor!
• What I dislike: The annual fee of $125 is a bit much, especially since you can get a no annual fee business credit card from Discover or Citi in a heartbeat. The fact that it’s an American Express card is also tricky because not as many merchants accept AMEX. If you have any international business travel, AMEX acceptance abroad is even worse than in the United States.