If you’re a business owner, you know the importance of keeping accurate records and separating your business expenses from your personal expenses.
One primary method of accomplishing this is to use a business credit card (we prefer Chase or Amex) for those associated business expenses.
In addition to separating expenses, a rewards-earning business credit card can deliver benefits like business management tools/services, rewards earned on business spending categories, and other features you won’t find on personal credit cards.
Arguably, 2 of the best business credit cards available are the Ink Business Cash® Credit Card and the Ink Business Preferred® Credit Card.
While either card would serve as a welcome addition to your business expense protocol, one is probably better suited to your business than the other.
Let’s find out which card best fits your business operation, or if the combination of both cards can add value to your business bottom line.
Why You Need a Business Credit Card
Even if you’ve been managing just fine putting your business expenses on your personal credit card, you’ll inevitably run into complications.
Here are just a few of the reasons you need a business credit card:
- Keep Personal and Business Expenses Separate — One of the primary reasons for using a business credit card is to separate your business expenses from your personal expenses. Doing so makes tax time easier and allows you to easily find documentation in the case of an audit.
- Record-Keeping Tools — Business credit cards typically provide record-keeping tools that can sync with QuickBooks or other financial management software.
- Higher Credit Limits — Business credit cards can offer higher credit limits than personal cards.
- Free Employee Credit Cards — It’s easier to keep track of expenses when your employees make purchases with their business credit cards.
- Rewards for Business Purchase Categories — Business credit cards may have bonus spending categories such as office supplies, shipping, and advertising that you won’t find on personal credit cards.
Bottom Line: While there are plenty of reasons to get a business credit card, the most important one is to separate your personal and business expenses. You’ll definitely save time and frustration at tax time and in case of an IRS audit!
Who Can Apply for a Business Credit Card?
You may be surprised to learn what qualifies as a business when it comes to applying for a business credit card.
The IRS, for example, defines a business like this: “Generally, an activity qualifies as a business if it is carried on with the reasonable expectation of earning a profit.”
Even if your side hustle is small, you may still qualify for a business credit card — because your personal credit will play a significant role in whether you get approved for a business credit card.
Registering your business as a DBA (doing business as) or LLC (limited liability company) prior to applying for a business credit card can add credibility and improve your chances of approval.
The rules differ by state as to what is required to register or license your business (if necessary), but once you have these in place you can open a business checking account, too, adding even more credibility.
For more information on how to apply for a small business credit card and additional business credit card recommendations, our in-depth guides can help.
Hot Tip: The U.S. Small Business Administration offers several tips for registering your business name and determining if a state or even federal license is required.
What To Look for in a Business Credit Card
Ask Yourself These Questions
- In which categories does your business spend the most? Selecting a business credit card that rewards your biggest spending categories is important, but you’ll also need to consider if the card has limits on the rewards you can earn in each category.
- Does your business involve travel? Are you running a business from your home, or are you a frequent flyer who could use some premium travel benefits? Perhaps you’re a road warrior who spends a lot on gas purchases — either way, make sure to get a card with the right benefits.
- Do you prefer travel rewards or want to earn cash-back? Travel rewards can be used for both personal travel or business travel, but you may want to invest cash-back into your business instead.
- Can you redeem the credit card rewards for benefits you can use? You can always use the cash earned on cash-back credit cards to offset your business expenses… but would travel rewards be worth more to your business bottom line?
- Are you comfortable paying an annual fee? You may prefer a business credit card with no annual fee, but the premium benefits of a travel rewards credit card with a higher annual fee could save you money that you’re currently spending on travel benefits such as airport lounge membership.
As you keep these answers in your mind, let’s take a look at the Ink Business Cash card and the Ink Business Preferred card to see how each one matches your priorities.
The Value of a Welcome Bonus
When applying for a card that offers a welcome bonus, you have a unique 1-time opportunity to jumpstart your earnings. Both of our featured cards offer the option to earn a generous welcome bonus after meeting required spending limits within the first 3 months after card approval.
While the Ink Business Cash card is a cash-back card, it initially earns rewards in the form of Ultimate Rewards points, just as the Ink Business Preferred card. The value of Ultimate Rewards points when redeemed for cash on either card is 1 cent, a data point for comparing the base value of the welcome bonus on either card.
However, the Ink Business Preferred card will receive an additional 25% in value when redeeming its points for travel via the Chase travel portal and potentially more value when transferring to airline and hotel partners.
The Ink Business Preferred card is a clear winner when it comes to the value of its welcome bonus. While the card does charge an annual fee, (the Ink Business Cash card does not), there is plenty of added value at redemption time to offset that $95 fee.
Bottom Line: If your business includes travel, you could more than offset the annual fee of the Ink Business Preferred card with the 25% increased value of your Ultimate Rewards points redeemed on the Chase travel portal and the added value of transferring points to travel partners.
One of the most prominent factors in selecting a business credit card is aligning the rewards earning with your actual business expenses.
For this reason, it’s important to look at the type of expenses your business incurs on a regular basis and which card matches up best with those categories.
Let’s look at how our featured cards reward some common business purchases:
Remember that these cards have limits on bonus category spending:
- Ink Business Cash card
- Earn 5% cash-back on the first $25,000 spent in combined purchases across 5% categories
- Earn 2% cash-back on the first $25,000 spent in combined purchases across 2% categories
- Ink Business Preferred card
- Earn 3 points per $1 on the first $150,000 spent across 3x categories
Bottom Line: Anticipating your annual bonus category expenses and selecting a card that rewards all of that spending without reaching the specified limits is critical to maximizing total rewards earning.
Best for Start-up Businesses
New businesses that spend a lot on startup expenses such as phone systems, internet service, and office supplies would fare well with a business credit card like the Ink Business Cash card that gives 5% cash-back in these categories.
If your new business spends heavily on online advertising, travel, and shipping, the Ink Business Preferred card may be a better fit. See the benefits of the Ink Business Preferred card in our separate post.
Best for Everyday Business Purchases
The best business credit card for your everyday business purchases will once again depend on the mix of your largest expenses.
For example, you may have needed to set up a brick-and-mortar operation before you hit the road selling your product. Now that the office is up and running, your biggest everyday business expenses may be gas and dining on your regional road trips.
In this case, the Ink Business Cash card appears to be the best business card for your operation, with 2% cash-back at gas stations and restaurants.
You’ll still have ongoing office supply and internet/cable/phone expenses, which will continue to earn 5% cash-back as well.
If your ongoing everyday business expenses are heavier in advertising, phone/internet/cable, shipping, and travel, the Ink Business Preferred card will be better suited to receiving maximum rewards.
Bottom Line: A primary consideration for selecting the best business credit card for your operation will be whether the card delivers the highest rewards for your biggest expenses.
Best Card if Your Business Involves Travel
The Ink Business Preferred card is clearly the winner when it comes to earning rewards on travel purchases. With 3x Ultimate Rewards points per dollar spent in this category, the card delivers a lot of value for businesses with travel expenses.
Chase defines the “travel” category broadly, and it covers purchases made with a wide variety of merchants, including:
- Car rental agencies
- Cruise lines
- Discount online travel sites
- Highway tolls
- Parking lots/garages
- Passenger trains
- Toll bridge
- Travel agencies
If you purchase travel in any of these categories on a regular basis for your business, the Ink Business Preferred card earning 3 points per $1 could deliver the best reward structure for those expenses.
The Ink Business Cash card earns just 1% cash-back on travel purchases and charges a 3% transaction fee on foreign purchases.
When it comes time to redeem your rewards, the Ink Business Preferred card is also the winner, giving you 25% more value for your Ultimate Rewards points and the option to transfer points to hotel and airline partners for even greater potential value.
Is It Better To Earn Cash-Back or Points?
While cash-back is the most liquid reward you can earn, it doesn’t always deliver the best redemption value. Fortunately, with these Chase business credit cards, you don’t have to decide which type of rewards you prefer to earn.
That’s because the Ink Business Cash card and the Ink Business Preferred card both earn Ultimate Rewards points that can be converted to cash-back.
Additionally, you can redeem points earned on either card for travel, although the Ink Business Preferred card provides greater value when doing so.
|Chase Business Credit Card
||Value When Redeemed for Cash-Back
||Value When Redeemed via Chase Travel Portal
|Ink Business Cash card
||1.0 cent per point
||1.0 cent per point
|Ink Business Preferred card
||1.0 cent per point
||1.25 cents per point
Hot Tip: You can increase the value of Chase Ultimate Rewards points earned on the Ink Business Cash card by transferring points to premium Chase cards such as the Ink Business Preferred card or the Chase Sapphire® Reserve. The points can then be redeemed for travel for up to 50% more in value (Chase Sapphire Reserve card) via the Chase travel portal. Transferring your Ultimate Rewards points also allows you to then transfer points to airline/hotel travel partners for potential additional travel value.
Both business credit cards we are comparing offer free employee cards that can help you earn rewards faster and manage your business expenses.
At redemption time, each card provides the same redemption options for cash-back but the Ink Business Preferred card delivers more options and greater value when redeeming for travel.
|| Ink Business Cash Card
|| Ink Business Preferred Card
|Redeem Ultimate Rewards points for cash-back
|Redeem Ultimate Rewards points at Amazon, for various gift cards, and for travel
||Yes, 25% additional value when redeemed for travel via the Chase travel portal
|Transfer Ultimate Rewards points to travel partners
Bottom Line: When it comes to redemption options, you’ll receive 25% additional value when redeeming Ultimate Rewards points via the Chase travel portal with the Ink Business Preferred card, plus have the flexibility of transferring points to hotel and airline partners for even greater potential value.
Travel Benefits and Protections
Both of our featured cards come with several useful travel benefits and protections.
Bottom Line: The Ink Business Preferred card has additional travel benefits when compared to the Ink Business Cash card, including valuable cell phone coverage that can provide up to $1,000 per claim for damage or theft. The card also does not charge foreign transaction fees.
Shopping benefits and protections for each of the compared cards are the same. Both of our featured cards offer purchase protection and extended warranty coverage.
Hot Tip: For additional in-depth benefits info on the Ink Business Cash card, check out our article specific to its most valuable benefits.
If your small business has annual expenses in bonus categories that do not exceed the limits of the no-annual-fee Ink Business Cash card, it would be a worthy choice — especially if your business doesn’t have a lot of travel expenses.
However, if your business includes purchasing a lot of travel, the Ink Business Preferred card may be a better fit — especially if you spend more than $25,000 in any of the bonus categories.
Additionally, the Ink Business Cash card charges foreign transaction fees. So if your business makes international purchases or includes international travel, you would want to consider the Ink Business Preferred card.
Also, the Ink Business Cash Card earns just 1% cash-back on travel purchases compared to the Ink Business Preferred card’s 3x Chase Ultimate Rewards points in the travel category.
Since the business bonus spending categories on these cards differ, the combination of having both cards may be an appropriate option for earning maximum rewards.
Having both business credit cards opens up the possibility of transferring points to hotel and airline partners (with the Ink Business Preferred card) to receive even more value for your Ultimate Rewards points.
Finally, before applying for any Chase card, check out the details of Chase’s 5/24 rule, which can affect your chances of being approved for new Chase credit cards.