post by:
Donna Cohen
There’s nothing more exciting than running your own ecommerce business. You suddenly become your own boss, and it’s an incredibly freeing feeling. When you run your own business, anything is possible. Well, that’s only true to a certain extent: you and your business are only capable of what your funding allows. That’s why it’s so critical to make securing funds a major part of your business model. You can’t grow if you don’t have the cash to do so.
In the modern era, there is an endless list of funding methods for ecommerce businesses. But one of the largely undervalued techniques is using a business credit card. Not only will a good business credit card allow you access to funds that were previously unusable, but they will also help you accrue rewards over time. Smart use of the right card can help grow your business in ways that other funding methods aren’t capable of.
But that brings up an important question. With so many business credit cards out there, what are the best ones? Well, it largely depends on what kind of company you’re running. The size of your business, your growth rate, your goals, and a variety of other factors will help determine which card you should go with. If you don’t feel like trawling through all of the choices that exist, though, don’t worry. We’ve got your back. Here’s a quick business credit card breakdown that will help you discover which is most useful for your ecommerce business.
What are business credit cards?
If you’re totally new to the subject of business credit cards, don’t run for the hills thinking that this is something beyond your understanding. At the end of the day, it’s pretty easy to understand what business credit cards are and how they work. If you’ve ever used a personal credit card, you more or less get the gist of it already.
Much like the Visa currently sitting in your wallet, a business credit card is a card that can be used for anything that happens to be a business expense. No, you can’t use it to buy a pint of ice cream for your Saturday movie night, but you can use it to help you pay for shipping costs, maintenance, or any other fees that might be related to running your ecommerce shop. Naturally, you’ll have to pay the money back with interest, but you’ll still have access to far more funds than if you were paying for things all on your own.
Applying for and receiving a business credit card is relatively simple. Many banks offer them, and it’s as easy as submitting your employee identification number (EIN) to get one. If your store is new enough that you don’t have an EIN established, that’s no problem. You can also use your Social Security Number to get yourself a card as well.
Why get a business credit card?
There are multiple reasons to pursue a business credit card. The main benefit is incredibly simple: you’ll have more money to use for your business. If you are confident that your shop will grow and bring in a profit, you can fund that growth with the card and then pay it off later. For store owners who are paying for their ecommerce company expenses out of their own pocket, this is an immense financial relief that opens up doors for progress in the business world.
Business credit cards are also very useful for small business owners who are looking to make a clear separation between their business expenses and their personal expenses. Rather than having to spend your evenings reading receipts, invoices, and other financial material to figure out where your money is going, you can just use your business credit card for everything business-related. This makes it super easy to understand where the line is between your personal life and your ecommerce goals.
Finally, many business owners opt for a business credit card due to the rewards that are offered. Depending on what kind of card you get, you might get travel benefits, cash back at certain stores, or even just a quick sign-up reward that you can use to finance your store. No matter what card you get, you’ll likely have some kind of reward system that makes it worth your while.
The best business credit cards for small ecommerce businesses
Small ecommerce businesses are perhaps the ones that stand to benefit the most from business credit cards. Although they may receive less rewards than huge corporations as they will inevitably be spending less, there are cards out there that are seemingly built for those ecommerce stores that are focused on solidifying their place in the market and growing beyond their competitors.
The first card that any small shop owner should consider is the Capital One Spark Cash for Business card. If you are focusing on handling all of your own day-to-day challenges, you will likely just want a card that is as simple and beneficial as possible. This checks that box. Capital One Spark Cash for Business provides you with 2% cash back on all purchases. That’s an incredibly significant number, particularly when your business is small and funds are tight.
Another major bonus to using this card is the fact that you will receive a heft sign-on bonus. If you spend $4500 in the first three months after signing up for the card, you’ll receive $500 for your troubles. Not bad at all! Additionally, Capital One waives the annual fee for the first year, so you won’t need to worry about paying for the card until you’ve already received quite a bit of cash back from a whole year’s worth of spending. Of course, you will need to consider the fact that there will be a $95 annual charge after that first year is up, but you won’t need to charge much to the credit card to make that fee more than worth it.
Another solid option for small businesses is the Chase Ink Business Preferred card. Like the Capital One Spark Cash for Business card, the Chase Ink card has a great sign-on bonus. If you spend $15,000 in the first 3 months, you’ll get 100,000 additional rewards points. If you convert that into cash, you’ll get about $1000 back in your account. If you instead opt to use it for travel, you can get up to $1250 out of those points.
Beyond that, you’ll continue earning points for every purchase that you make with the card. In fact, the first $150,000 you spend will earn you triple points the entire way. Because most small businesses likely won’t be spending much more than $150,000 for a long time, that essentially means that you’ll earn triple points on almost all of your spending. This makes the Chase Ink Business Preferred card much more effective at racking up points that you can redeem to help build your business.
Finally, this card is great because it offers multiple different kinds of protections. You’ll get cell phone insurance, rental car insurance, and more. As you begin to grow your business and start to invest in things like that, this card will pay off in dividends. You’ll certainly be surprised at how much of a difference this makes.
One more card that any small business owner should consider is the American Express Blue Business Cash card. There are lots of reasons to sign on: there is no annual fee to worry about, you’ll immediately get $250 as a bonus, and you’ll get 2% cash back on the first $50,000 that you charge to the card. In case you don’t feel like doing the math, that’s more or less $1000 totally free.
The most exciting thing about this card, though, is the fact that you will have a 0% interest rate for the first year you have it. Compared to others that charge an interest rate within the first year, you may find that you are able to spend a lot more and grow your business more quickly. That’s a huge plus. Of course, you will have to watch out for the increase in interest once that year is up, but you could always switch to another card when that time comes.
So, the question remains: which of these cards is the best for small ecommerce businesses? Well, that’s not easy to answer. If you need cash quickly, the Chase card may be appealing thanks to its great sign-on bonus that you will have access to after only three months. The Capital One Spark card may be the top choice if you are doing lots of spending, as the 2% cash back rate is huge. Finally, the American Express option may stand out to any business owners who are trying to avoid racking up interest payments.
In the end, it’s totally up to you which card to go with. Think about your own unique needs and base your decision on that. There isn’t one card to rule them all, but there is definitely one card that will be perfect for you.
The best cards for established ecommerce businesses
Okay, let’s say that you are no longer brand new to the ecommerce game. You’ve got some time under your belt, and your business has become more established than before. You are no longer struggling to make ends meet and understand the basics. That’s awesome! Running a more solid business is a great feeling, and it’s when all of your hard work starts to really pay off.
But, as you probably know, having a larger and more established business means that you have some new things to worry about. You have more expenses, and you are likely trying more aggressively to grow in any ways possible. You have real competitors now, and you need funds to help keep up with them. A business credit card can help you out with this, but the cards that are best for new businesses may no longer be the greatest choice for you.
With that in mind, it’s important to find new cards that are better suited to your needs. One of the first cards you should look into is the Ramp card. Although the fact that it isn’t produced by a common credit card company might alarm you at first, we’re here to assure you that there’s nothing to worry about. The Ramp card is trusted by tons of different ecommerce business owners, and it is specifically designed to help you take your store to the next level.
What are some of the perks of this card? Well, for one, you’ll get 1.5% cash back on all of the purchases you make. That’s an excellent rate. But that’s not all: because the Ramp card is designed for scaling businesses, Ramp offers multiple different packages that you can transition to as your company gets larger and larger. That means you won’t need to scramble to find a new card once your financial situation changes as you start making more sales and spending more on inventory. You can just stick with Ramp throughout the whole scaling process.
Another big reason to love the Ramp card is that it connects to a financial management app that makes your spending super easy to track and analyze. Powered by AI, you’ll receive immediate analysis on your finances. This can really help you find spots where you can optimize your spending and positively influence your supply chain. Ramp is also partnered with Amazon Web Services and Google Ads, meaning you can use some of your rewards to help build up your web presence and earn new customers.
The Ramp card is an obvious choice for any business owner hoping to expand. But another popular option is the American Express Business Gold Card. Its annual fee of $295 is more than what small new businesses might want to pay, but the price is certainly worth what you get in return. First of all, you’ll get 70,000 points as a welcome offer. You’ll also get a 25% rebate rate on airline points when using Amex Travel – this can really come in handy once you start flying around the world to meet with suppliers.
The most intriguing part of this card, though, is the ability to earn a bonus on your rewards points – up to four times the normal amount of points, in fact. There are many categories that are included in the quadruple points offer, but the ones that will appeal most to ecommerce businesses are advertising, technology purchases, select airfare, and shipping costs. Your top two categories out of those four will earn you four times the normal amount of points, and that will add up to some major cash rewards down the line.
The Business Gold Card is linked with Quickbooks, a popular accounting software, and that means that you will have no trouble managing your purchases and expenses. The connection between the card and Quickbooks makes it one of the easiest to use cards out there – particularly if your business is already using Quickbooks for accounting purposes.
Choosing between the Ramp card and the American Express Business Gold Card certainly isn’t easy. Both are excellent choices, and it can be hard to know which one to go for. Our recommendation is to go for the Ramp card if you are expecting rapid growth in the future and the Amex card if you are more stable and have higher average spending. You really can’t go wrong with selecting either card, though, so don’t overthink it.
The best card for earning as many rewards points as possible
Maybe you don’t care about having a card that is perfectly suited to your business. We understand that. There’s a good chance the size and scope of your ecommerce store will change in the future, so why not just pick one card that will be effective both now and in the future? One card that fits the bill is the Brex card.
The main appeal of the Brex card is that, if you make the right choices, you can earn a ludicrous amount of rewards points. While it is made for small businesses and startups, nearly any company can take advantage of its rewards. You can earn up to 8 times the regular amount of points depending on which category you are spending your money in. Ecommerce businesses will be excited to know that travel earns five times rewards points and recurring software payments earn three times.
Another great part about the Brex card is that it can easily sync up with programs that many ecommerce business owners likely use on a daily basis. Gusto, Slack, and Amazon Web Services are all partnered with Brex, making it very easy to incorporate the card into your day-to-day business activities.
Of course, the main draw to the Brex card is still the fact that you can earn lots of rewards points to redeem at a later date. And if that is your main goal with a business credit card, you will certainly feel satisfied with this one.