Startups sometimes face limitations due to cash flow and problems with expense management. In fact, it is really important to separate personal expenditure from business expenditure for financial clarity and the sustainability of operations. This is where small business credit cards step in. In today’s post, we will show you how startups can make the best use of these options to control expenses, cash flow optimization, and grow their finances in the long run.
Why Small Business Credit Cards Are Essential for Startups
- Cut Costs
A small business credit card lets you manage normal expenses with us. Not only will it make accounting easy, but it will also make tax reporting easy.
- Boost Cash Flow
Credit cards usually try to provide more flexible payment options with a higher limit of credit, which means less damage to cash flow.
- Earn Bonuses
You can earn cashback, points, or airline tickets for business spending, which puts value back into the daily expenditures.
- Work on Your Business Credit
If you regularly use the card and make those payments on time, it will slowly amount to a good business credit profile.
Features to Look for in the Best Small Business Credit Card
- Rewards Programs
Always purchase cards that can benefit your business. Choose those that give you the benefit of spending in different categories, like office supplies, fuel, or even travel. - Low APR or Introductory Offers
Low annual percentage rates and/or introductory 0% APR are generally beneficial for cash flow during startup stages. - High Credit Limits
Startups have great potential to ease overwhelming financial strains, such as buying stocks, launching their marketing campaigns, and upgrading their machines when their credit limit is high. - Expense Management Tools
Automated tracking and reporting in real-time with accounting software, including Quickbooks or Zoho Books, helps businesses stay updated on their financial records and decrease their pressure during tax submissions. - Employee Cards
Issuing additional cards to staff members based on pre-set limits ensures staff limitations, reduces cash-taking risk, and increases transparency in financials.
Top Picks: Best Credit Cards for Small Business Startups
Here are some top recommendations for small business credit cards:
Global Options
- American Express® Business Gold Card: Offers flexible payment options and rewards tailored to everyday business expenses.
- Ink Business Preferred® Credit Card: Provides high points value for categories like travel and advertising expenses.
Options for Indian Startups
- HDFC Business MoneyBack Card
Offers cashback for business expenses and options for no-cost EMIs. Accelerated reward points are provided on business expenses to help startups enhance their savings while efficiently managing cash flow.
- SBI Platinum Corporate Credit Card
This simplifies utility and business payments while offering benefits such as global acceptance and spending control.
- ICICI Bank Business Advantage Black Card
This card offers rewards on professional services and utility payments, complimentary access to airport lounges, and fuelling surcharge waivers in addition to travel benefits.
Benefits of Using the Best Small Business Credit Card
Utilizing the right credit card can offer several benefits:
Earn Rewards and Cashback
Offset recurring expenses through accumulated rewards or cashback.
- Access Higher Credit Limits
Benefit from higher credit limits compared to personal credit cards, facilitating larger purchases.
- Build Business Credit
Establish a strong credit history, enhancing eligibility for future loans and financing.
- Save Money
Take advantage of no-cost EMI options and interest-free periods to manage expenses efficiently.
Tips for Choosing the Best Credit Card for a Small Business Startup
- Assess Spending Patterns
Pick a card that suits your greatest business expenditure, i.e., travel, advertising, or office supplies.
- Compare Rewards and Fees
Look for cards with maximum cashback or points and with the lowest annual fees.
- Check for Flexibility
Opt for cards that permit you to make installment payments or extended credit periods, which may also assist when managing cash flows.
- Evaluate Customer Support
Ensure that the card provider has superior customer service to help with any kind of query or dispute.
How to Use a Small Business Credit Card Effectively
Maximize the benefits of your business credit card by:
- Setting Clear Spending Limits
Assign specific spending limits for employees with supplementary cards to maintain control over expenses.
- Leveraging Rewards
Utilize accumulated rewards to offset business costs or invest back into the business.
- Timely Payments
Always pay your credit card bills on time to avoid interest charges and maintain a strong credit score.
Top Small Business Credit Cards in India
Selecting the best credit card allows you to handle business-related expenses and effectively build a business credit score. The following are the best small business credit cards in India:
- IndusInd Bank Corporate Card
The IndusInd Bank Corporate Credit Card is designed to help businesses manage expenses effectively. The Corporate Credit Card is issued alongside an expense management platform that enables companies to have detailed reports and allows them to set revised limits on their cards.
Further benefits extended concerning holding the Corporate Credit Card include an allocated Relationship Manager, optional membership with Priority Pass for lounge access at airports, up to 2.5% fuel surcharge waiver on transactions between ₹500 and ₹3,000, EMV chip security, and protection from theft, loss, and fraudulent transactions.
- SBI Platinum Corporate Credit Card
The SBI Platinum Corporate Credit Card is tailored for global travelers and offers features like global acceptance at over 38 million outlets, a spend management tool for real-time expense tracking, and customizable spend category controls. It also provides complimentary insurance cover against employee fraud and detailed spend analysis through tools like Visa Intellink or SmartData Gen2.
- Axis Bank Business Credit Card
The Axis Bank My Business Credit Card offers benefits such as earning 4 EDGE reward points for every ₹200 spent, 100 bonus points on the first online transaction, and double points during the cardholder’s birthday month. Cardholders receive two complimentary domestic airport lounge visits per quarter, a 1% fuel surcharge waiver on transactions between ₹400 and ₹4,000, and the ability to convert purchases over ₹2,500 into EMIs. The card also provides a cash advance facility up to 30% of the credit limit.
- HDFC Business Platinum Credit Card
The HDFC Business Platinum Credit Card offers cashback on all retail spends, with 1% cashback for statement balances of ₹50,000 or more and 0.5% for balances of ₹10,000 or more. Additional benefits include a flat 1% cashback on international spends of ₹10,000 or more in a statement cycle, fuel surcharge waiver on transactions between ₹400 and ₹5,000 (up to ₹500 per statement cycle), exclusive lounge access at various Indian airports, zero lost card liability upon immediate reporting, and utility bill payment options through SmartPay, Register&Pay, PayNow, and Visa Bill Pay.
- Laghu Udhyami Credit Card
The Laghu Udhyami Credit Card is a special scheme introduced to empower small and micro enterprises, especially in rural and semi-urban areas. It is designed specifically for MSMEs, artisans, and small retailers, offers you a credit limit of up to ₹10 lakh, does not require any collateral, and helps improve the credit profile of micro-business owners by promoting formal credit behavior.
Eligibility Criteria For Small Business Credit Cards
If you’re looking to boost your credit score through a small business credit card, it’s important to know whether you qualify. Here are the general eligibility requirements:
- Business Type: Must be a sole proprietorship, partnership firm, LLP, or a private limited company.
- Operational Tenure: Most banks require a business vintage of at least 1-2 years.
- Annual Turnover: Varies by card, but typically starts from ₹10 lakhs and above.
- Credit Score: A good personal or business credit score (typically 700+) improves approval chances.
- Documentation: PAN, GST registration, business address proof, and income statements.
Having a business credit card and using it responsibly can directly contribute to improving both your business and personal credit scores, which is crucial for securing future funding.
Conclusion
Selecting the best small business credit card is a strategic move to enhance cash flow management and streamline expenses. By evaluating options based on rewards, fees, and your business needs, you can find a card that offers financial flexibility and supports your startup’s growth. Compare small business credit cards today and empower your startup with the financial tools it deserves!
FAQs
What is the best small business credit card for startups?
It depends on the needs and the expenditure patterns of the business. Some cards preferred among startups are the American Express Business Gold Card and the HDFC Business MoneyBack Credit Card.
Do small business credit cards build business credit?
Yes, consistent payments and use of the card will build and improve your business credit report.
Are small business credit cards better than personal credit cards for startups?
Yes. Business cards have bigger limits to spend, several rewards designed for business use, and other features that tend to help startup owners.
What are the eligibility criteria for a business credit card in India?
A registered business, a high personal credit score, and proof of income from the business are important to get a business credit card in India.
