Whether you run a shop on eBay or a store at the mall, a small-business credit card can help you manage expenses. Benefits include rewards for common business purchases, a higher credit limit than you might have with a consumer card, and the ability to separate business from personal spending–useful at tax time.
But before you apply, consider some potential downsides. Some issuers share account activity with consumer credit agencies–meaning that if you default on a business card, your personal credit could suffer. Plus, issuers of business cards don’t have to comply with consumer credit card protections, such as ceilings on over-limit and late fees. However, just as with consumer cards, cardholder liability for unauthorized purchases is limited to $50; MasterCard and Visa extend zero-liability coverage to their small-business credit cards. Ask your issuer what protections it offers.
We like three no-fee business cards. Chase Ink Cash Back Rewards (0% annual percentage rate for 12 months, then 13.49% to 19.49%) pays 5% cash back on up to $25,000 spent yearly at office-supply stores and on phone, internet and cable-TV services; 2% on up to $25,000 spent at gas stations and restaurants; and 1% on everything else. Capital One Spark Cash Select (0% for nine months, then 13.24% to 21.24%) offers 1.5% cash back on all purchases and charges no foreign-transaction fee. Bank of America Cash Rewards for Business MasterCard (0% for nine months, then 11.49% to 21.49%) pays 3% back at gas stations and office-supply stores (up to $250,000 spent a year, then 1%), 2% on restaurant purchases, and 1% on everything else.