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A lot of people don’t realize the enormous value that they can get from business credit cards. Sure, there’s the obvious value from those lucrative sign-up bonuses the offer but the value extends well beyond earning lost of miles and points. This article will take you through nine different ways that business credit cards are worth it and why you should consider signing up for them.
Interested in finding out the hottest travel credit cards for this month? Click here to check them out!
1. Great sign-up bonuses
Business credit cards often offer some of the best welcome bonuses out of any cards out there on the market. For example, the Chase Ink Preferred has had a publicly available 80,000 point offer out for some time compared to the 50,000 point offers for the Chase Sapphire cards.
The Amex Business Platinum recently offered 50,000 Membership Rewards after spending $10,000 in the first 3 months and then an additional 50,000 Membership Rewards after you spent $15,000 more in the first 3 months. (It’s had even higher offers in the past as well.)
It’s also not unheard of to find other business cards offering welcome bonuses of $1,000 cash back at times either.
By earning these huge sign-up bonuses, you’ll be able to accumulate high balances in various reward programs quickly and be able to take advantage of those amazing business class and first class redemptions more often. And if you like conserving your points, it’ll also mean that you can go longer between credit card applications.
The drawback is they that they do often require more spend to hit these sign-up bonuses so that’s something you have to be on the lookout for.
2. They don’t report to your personal credit report
Many business credit cards do not report to your personal credit report. For example, small business credit cards from Chase, Amex, Bank of America, Citi, Wells Fargo and others will not show up on your personal credit report. However, some like those from Capital One will report to your personal credit report.
This is very important for a few reasons, which I’ll get into with the reasons below.
3. Stay under 5/24
By signing up for business cards that don’t report to your personal credit report, you can fly under the radar longer with Chase since those cards won’t count towards your Chase 5/24 status.
The Chase 5/24 rule does not allow you to be approved for certain Chase cards if you’ve opened up five or more new credit cards (or revolving accounts) in the past 24 months. This is a harsh rule because it means you might not be eligible for some of the best travel cards like the Chase Sapphire Reserve or Chase Sapphire Preferred.
But by picking up business cards, you can remain under 5/24 for a very long time or you can slowly work your way to getting to 4/24 so that you can pick up at least one card subject to the rule.
4. Won’t lower your credit score
Since you won’t have new accounts showing up on your credit report, you won’t have to worry about your credit history getting dropping due to a lowered average age of accounts.
Your credit history only makes up 15% of your FICO score and your average age of accounts in the second most important factor for that category, so this isn’t a huge factor in your credit score, but when you’re opening up a lot of cards, any help you can get to lengthen your average age of accounts is good to take advantage of.
But do keep in mind that the credit inquiries from business credit cards will still show up on your personal credit report. The effect of those hard inquiries will diminish after 90 days and they usually only impact your score by a hand full of points, but you should still be aware that they will show up.
5. Easier to cancel cards
If you ever need to cancel your business card, it won’t affect your average age of accounts so you don’t have to worry about trying to keep these cards open like you would a personal card. This is a huge advantage if you’re facing a high annual fee but you’re not able to get the fee waived or receive a retention offer.
6. Won’t affect your credit utilization
Sometimes things come up and you might need to put a large purchase on a credit card that you don’t have the funds to immediately pay back. Well, if you do this on a business card that is not reporting to your personal credit report then you won’t have to worry about it affecting your credit utilization, which makes up 30% of your FICO score!
There are cards like the Amex Blue Business Plus which offer 0% APR and are perfect for these situations. You can avoid paying interest AND you can avoid hurting your credit score with a high balance.
7. Makes award travel more sustainable
By picking up business cards here and there, it will make award travel more sustainable for you in the long-run. Your credit score will be in better shape and you’ll be able to capitalize on more opportunities as they appear, whether they are for personal and business credit cards.
We’ve been able to put together a couple of amazing round the world trips and there’s no way we would’ve been able to make those happen without hopping on several business business credit cards over the years.
8. Solid perks
Some of these business cards offer perks that are rare to find on similar cards. For example, the Chase Ink Cash and Chase Ink Unlimited both offer primary rental car coverage and they have no annual fee. This is virtually impossible to find with other no annual fee credit cards.
The Chase Ink Preferred cell phone protection will protect you against damage, theft, or involuntary and accidental parting of your cell phone when you use your Chase Ink Preferred to pay your phone bill. The protection requires a $100 deductible per claim and allows a maximum coverage limit of $600 per claim and $1,800 dollars per 12 month period. Read more about that here.
Other times business cards can open up special opportunities like the Southwest Rapid Rewards Business Credit Card. Chase recently prevented applicants from picking up two personal Southwest credit cards which made obtaining the coveted Southwest Companion Pass more difficult.
But with the Southwest Rapid Rewards Business Credit Card’s all-time high 60,000 point sign-up bonus you can still earn the Companion Pass with only two credit cards. Find out more about the Companion Pass here.
9. Extra bonus earning potential
Business credit cards often allow you to earn bonus points in categories that personal credit cards just don’t offer. For example, the Chase Ink Preferred earns 3X on the first $150,000 spent in combined purchases on:
- Shipping purchases
- Internet, cable and phone services
- Advertising purchases with social media sites and search engines
The Chase Ink Cash will earn you 5% cash back on the first $25,000 spent in combined purchases each account anniversary year at:
- Internet, cable and phone services
- Office supply stores
And the SimplyCash Plus Business Credit Card from American Express allows you to earn 3% cash back on the category of your choice from a list of eight categories:
- Airfare purchased directly from airlines
- Hotel rooms purchased directly from hotels
- Car rentals purchased from select car rental companies
- U.S. gas stations
- U.S. restaurants
- U.S. purchases for advertising in select media
- U.S. purchases for shipping
- U.S. computer hardware, software, and cloud computing purchases made directly from select providers
If you’re already earning bonus points on things like dining and travel, then business cards can allow you to supplement your earning with your internet, cable, and phone bills, in addition to things like shipping, gas, and other expenses.
Business credit cards play a vital role in maximizing credit card rewards. They allow you to go much further in award travel and to mitigate the damage to your credit report in the process. If you’d like to find out some tips and tricks for how to get approved for business credit cards, I suggest that you give this article a read right here.
UponArriving has partnered with CardRatings for our coverage of credit card products. UponArriving and CardRatings may receive a commission from card issuers. Responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.
Daniel Gillaspia is the Founder of UponArriving.com and creator of the credit card app, WalletFlo. He is a former attorney turned full-time credit card rewards/travel expert and has earned and redeemed millions of miles to travel the globe. Since 2014, his content has been featured in major publications such as National Geographic, Smithsonian Magazine, Forbes, CNBC, US News, and Business Insider. Find his full bio here.