Unsecured Business Credit Cards for Startups

What is an unsecured business credit card? An unsecured credit card does not require a personal guarantee from the business owner.  Small business owners prefer an unsecured credit card. Rest assured, there are no affiliate links in this article.

 

Brad Nakase, Attorney

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Craig is the owner of a local startup catering business, which produces delicious dinners and desserts for the local community. As part of his business, Craig has a few vans which the company uses to deliver meals to parties and businesses around town. For a while, Craig has been considering applying for an unsecured business credit card in order to further build up his company’s credit as well as getting valuable rewards to use toward his business. He has researched some cards and found that certain ones offer travel perks, including gas and vehicle coverage, as well as cash back benefits. Craig thinks his startup business could really benefit from these offers, and he is positive that he can pay back bills on time.

Is an Unsecured Business Credit Card a Good Idea for a Startup?

For individuals who are careful about paying their bills on time, an unsecured business credit card can be a useful method of financing for their business. An unsecured business credit card has the advantage of requiring no money down. It offers short-term funding that provides business owners with thousands of dollars in cash flow. This is a great option for businesses that need a little money right away. Also, if an individual chooses a credit card that rewards spending habits, he or she can gain access to impressive benefits. That said, it can take time to determine the best card for one’s specific needs and spending habits.

To determine the best option without spending a lot of time on the issue, a business owner can review this article for advice on the top five unsecured business credit cards.

The following five cards are the best options for small business owners. By reviewing these options, an individual may determine which option is best for his or her specific situation and business.

The Capital One Spark Cash for Business

For an individual to be approved for the Capital One Spark Cash card, he or she will need to have a good or excellent credit score. Should a business owner qualify for this card, he or she will enjoy access to notable cash rewards and other benefits, which include the following:

  • Unlimited two percent cash back on purchases
  • An early spend bonus of $500 cash back should the business owner spend $4500 in the first three months of having the card
  • Annual fee of $95 waived for the first year
  • Free spending reports and employee cards
  • No foreign transaction fees

A business owner should know that the cash back rewards on the Capital One Spark Cash for Business card do not expire so long as the account is kept open. Also, a business owner can redeem cash rewards as either statement credits or paper checks.

Chase Ink Business Unlimited

To qualify for this credit card, a business owner applicant will need to have an excellent credit score. In terms of rewards, this card is similar to the Spark Cash card. That said, there are some important differences between the two cards that are worth considering. Not only does the Chase Ink Business Unlimited card have no annual fee, but it also offers the following features and rewards:

  • Sign-up bonus of $500 if an individual spends $3000 within the first three months
  • Unlimited 1.5% cash back on certain eligible purchases
  • Free employee cards
  • Introductory APR of 0% for the first year
  • Foreign transaction fees of 3%, as well as cash advance and balance transfer fees of 5%

Similar to the Spark Cash card, this card is fairly simple to use because it has no restrictions, spending categories, or expiration to think about so long as the account remains open.

Chase Ink Business Preferred

Chase offers another unsecured business credit card called the Chase Ink Business Preferred. When compared to the Unlimited card discussed above, this popular card offers additional rewards and benefits. While a business owner will be required to pay an annual $95 fee, he or she will benefit from the following features:

  • A sign-up bonus of 80,000 Ultimate Rewards points (equal to $800 in cash back or $1000 in travel purchases) for spending $5000 in the first three months of having the card
  • Three points for every dollar spent on search engine ads or social media, shipping, travel, and communications (capped at $150,000)
  • One point for every dollar spent on any other purchases
  • No foreign transaction fees

In order to qualify for this card, a business owner will need to have an excellent credit score. Unfortunately, the annual fee cannot be waived. That said, for business owners who ship physical products, travel a lot, and invest in Internet advertising, this card is a fantastic option.

American Express SimplyCash Plus Business

The American Express SimplyCash Plus Business card is simple in structure but offers significant cash rewards. With this card, there is no annual fee and 0% APR for the first 15 months of use. In addition, there are the following features and benefits:

  • 5% cash back on wireless phone service and office supply purchases (capped at $50,000 a year)
  • 3% cash back on one of the following categories of an entrepreneur’s choice: gas, car rental, advertising, hotel, shipping, restaurants, or computer software and hardware
  • Unlimited 1% cash back

For entrepreneurs with good credit scores, the American Express SimplyCash Plus Business card is an excellent choice. It may be an especially good option for a business owner who spends primarily in one area, such as advertising, shipping, or computer software, due to the cash back benefits offered.

Bank of America Business Advantage Travel Rewards World Mastercard

This credit card is an excellent choice for entrepreneurs that spend a lot of time traveling for their businesses. There is no annual fee, and the benefits consist mainly of travel-focused rewards:

  • Sign-up bonus of 25,000 points (equal to a $250 statement credit) if a business owner spends $1000 or more in the first two months of opening an account
  • Introductory APR of 0% for the first nine billing cycles
  • No international transaction fees
  • Three bonus points per dollar spent on travel purchases via the Bank of America Travel Center
  • Unlimited 1.5 bonus points for each dollar used on certain eligible purchases

This card is different from others mentioned previously because the point-based reward system is unlimited. This means that if an entrepreneur spends a lot of money on travel, he or she can earn significant rewards using this card. That said, a business owner will need to have an excellent credit score to qualify for this card.

Summary

It is generally simply and easy to apply for these credit cards. In fact, applications can often be completed online or by phone, taking only a few minutes to submit. However, before a business owner applies for one of these cards, he or she should take the opportunity to explore their options. It is important that an entrepreneur understands how his or her business needs and uses money, so that the business owner can choose the right card for their circumstances.

Indeed, any of these cards may be a good fit, but it is still wise to study each one to pick the best for one’s business.

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