Top 5 Small Business Credit Cards

american express cardTransparency, accountability, and mutual responsibility❠describe the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 in the words of President Obama. While this reform, passed by Congress on May 22, 2009, protects personal credit card holders from deceptive credit card practices, it continues to leave small business credit card holders vulnerable to hidden fees (late fees, over-limit fees, double-cycle billing), rate increases, and unclear language.

As a result, 18.8 percent of small businesses filed bankruptcy in 1998 due to contract and related disputes with creditors, followed by 554,000 new, small businesses closing and 35,000 new, small businesses filing bankruptcy in 2003, according to research studies managed by the U.S. Small Business Administration.


CARD Act Protections for Small Business Credit Cards

To address the need for the protection of small business credit card holders, the credit card rating company established a small business credit card study called CARD Act Protections. This study assigns a rating of 0-100 to the 10 largest credit card companies in the U.S. according to their compliance with the CARD Act Protections criteria. (Note that some of the credit card companies refused to participate in the study).

The five criteria included the following:

Interest-rate increases (APR penalty) no sooner than 60 days of cardholder delinquency on existing balances

Elimination of double-cycle billing

Elimination of universal default

Change in card-agreement terms no sooner than 45 days of providing notice

Assignment of payments (above the minimum) to the balance with the highest interest rate


Top Credit Cards for Small Businesses

Based on this criteria rating, one has the ability to determine the top credit cards for small businesses. Beginning with the highest rating, the top credit cards are listed as follows:

1. Bank of America Visa Business Credit Card

This small business credit card was the only one of the 10 major credit cards that scored a 100 percent rating for CardHub’s CARD Act Protections criteria. The specific features of this business card include the following:

25-day payment period

45-day minimum payment of rate changes

No rate increases on existing balances

No over-limit fees

Extended grace period on purchases

Mailing small businesses its one-page Clarity Communication❠letter that describes its rates, fees and payment information


2. Capital One

This small business credit card met 60 percent of CardHub’s CARD Act Protections criteria. Its need for improvement was in the area of eliminating rate increases. In addition to its good CARD Act Protections, Capital One Business Platinum offers attractive membership awards to small businesses, which include the following:

No annual fee

Introductory zero percent APR; 14.99-22.99 percent variable APR

No fees for extra employee cards

One percent cash back (with no monthly minimum)

Business-set spending limits

Reward points for travel


3. American Express

Third place in meeting 15 percent of CardHub’s CARD Act Protections criteria was American Express. One of its cards that offers excellent perks to small businesses is its SimplyCash Business Card. Some of the rewards are listed below:

No annual fee

Five percent cash back on office supplies and wireless services

Three percent cash back on fuel

One percent cash back on other purchases

Employee cards with business-set limits


4. Chase

In CardHub’s CARD Act Protections study, Chase offered decent credit card transparency and agreed to begin offering some of CardHub’s CARD Act Protections such as extending payment grace periods. Of most popularity, the Chase Ink Cash Business Card offers the following membership rewards:

Introductory zero percent APR; 13.24-19.24 percent variable APR

No annual fee

Earn 2% Cash Back on Dining and Gasoline  – When you buy gasoline or pay for dining out, you’ll earn an 2% cash back on the first $25,000 spent annually

Customized credit line

100 percent bonus cash back


5. Discover

Although Discover had not practiced any of CardHub’s CARD Act Protections during the study, it adopted the practices of offering a 25-day grace period between the availability and payment of a bill as well as eliminating over-limit and pay-by-phone fees. One of the most noteworthy Discover small business cards is its More (SM) Card that offers the following perks:

No annual fee

Zero percent APR for the first 15 months; 11.99-20.99 percent variable APR

Five percent cash back on first $2000 on office supplies

Two percent yearly cash back on first $2000 of gas

One percent unlimited cash back

Free employee cards


Choosing the Right Credit Card

Overall, protection is a central need that is considered in rating the top five credit cards for small businesses. After choosing small business credit cards that meet CardHub’s CARD Act Protections criteria, small businesses will see a decrease in the statistics of closures and bankruptcies among small businesses that include law offices, restaurants, convenience stores, and salons.

It is also important to note that small business Credit Card Deals are significant in that they help small businesses to establish credit, to simplify bookkeeping (card statements outline business spending), to have emergency coverage, to receive employee cards that can be monitored, and to earn rewards.

(Joy is a freelance writer for a website that is able to compare everything from credit cards to car insurance. She enjoys learning about personal finance and helping educate others about the benefits of properly handling one’s finances. If she is not learning about personal finance, she can be found playing her new Wii Fit.)

photo by Images_of_Money