Business Credit Cards With Cash Back and No Annual Fee

By Flexo on Wednesday, December 27th, 2006 in Credit Cards
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In 2007, I plan on creating an official business entity (LLC) to handle any income not coming to me from my day-job employer. As I do more work online, I’m dealing with more expenses, so I’m going to look into getting a business credit card. Having a card with no annual fee is important to me, while interest rate is not. My business expenses should remain well below income, but as a Type B credit card user, I make the most of the grace period. So here are my best options:

Discover Business Card
APR: 12.99%
Introductory APR: 0% for 12 months
Annual Fee: $0

This card offers 5% cash back on office supplies, 2% back on gas, and 1% back on everything else. This is probably my first choice card.

American Express Blue Cash for Business
APR: 11.24%
Introductory APR: 0% for 6 months
Annual Fee: $0

This American Express card also offers up to 5% cash back. Purchases in AmEx’s “Open Savings” plan qualify for 5% cash back, but all other purchases receive 2.5% cash back. They do lower the cash back rate once you’ve charged over $15,000 during the year, but this is still significant. This card is a good second choice, but I don’t know if I’d be making purchases in the “Open Savings” program.

American Express Platinum Business FreedomPass
APR: 14.24%
Introductory APR: 0% for 12 months
Annual Fee: $0

This card isn’t for me, but for small businesses that require a lot of travel, this might be a good choice. For every dollar charged to the card for purchases, the holder gains 1 point, which never expire. The rewards are good for use on any flight (regardless of airline), hotels, car rentals, and cruises. They’ll start you off with 5,000 bonus points after your first purchase.

American Express SimplyCash Business Card
APR: 8.25%
Introductory APR: 0% for 12 months on purchases
Annual Fee: $0

American Express seems to lead the market in cash back business cards. This one offers 5% cash back on gas, office supplies, and wireless services, as well as 1% cash back on everything else. There is no need to make purchases through any network of retailers in order to qualify for the highest cash back amount, so this might be a great choice for small businesses. What’s convenient is the cash back is automatically credited to the account; there’s no need to request a check.

Here’s one more card to round out the collection.

Chase Business Rebate Visa Card
APR: 14.24%
Introductory APR: 0% for 12 months on purchases and balance transfers
Annual Fee: $0

If you entertain clients, which I do not, this may be a good choice for your small business. Here you get 3% cash back on purchases at restaurants, gas stations, office supply stores, building supply stores, and hardware and home improvement stores. Everywhere else, the card offers 1% cash back.

In some cases, the best solution may be a combination of cards. For example, I might use the Chase card when paying for dining out and filling up the tank, the Discover Card for office supplies, and either for everyday purchases.