Ecommerce businesses are booming. And although they don’t have the high upfront costs of a bricks and mortar business, expenses like web hosting, advertising, and other costs can add up. A business credit card can be an excellent way to finance those costs, improve cash flow and earn significant rewards.
Here we’ll share some of the best ecommerce business credit cards along with strategies for making the most of the cards you use in your business.
How a credit card can help your ecommerce business
One of the biggest advantages of using a business credit card versus a personal credit card is that it’s easy to keep track of business expenses. An online business or ecommerce store with high volume online transactions tends to have heavy bookkeeping needs. A business credit card will help keep spending receipts in one place, which can make it faster and easier to complete your bookkeeping whether you do it yourself or hire a bookkeeper.
Cash flow is another important reason to consider a business credit card. Let’s say you develop an online advertising campaign that’s working. You may decide you want to ramp up spending on that campaign, and you’ll need a way to pay for it before sales come in. Put it on your business credit card and you may have as long as 60 or 90 days to pay, depending on the card you choose.
Pro tip: A business credit card with a 0% intro APR offer can give you interest-free financing while you grow your business. (Balance transfers typically incur a fee.)
Rewards are one of the top reasons to choose a business credit card. All that business spending can translate to cash back rewards, travel points or other credit card rewards. If you spend a lot on advertising, inventory, web hosting or other expenses, you will likely find these cards truly rewarding.
Safety and security are also important. Online fraud is rampant but business credit cards are covered by federal law when it comes to fraudulent use. If your card is used without your authorization you can notify the card issuer so they can investigate.
Best Business Credit Cards for Ecommerce
The best credit card for your online business will depend on your needs. Here are 3 excellent choices to consider.
Rewards + 0% APR offer:
This card combines solid cash back rewards with an 0% APR intro offer and a cash back welcome offer.
Welcome offer: .
Savings for Amazon shoppers:
If your business will be using AWS or shopping heavily on Amazon, consider the . The annual fee is (though you do need a Prime membership).
Welcome offer: .
Types of credit cards for ecommerce businesses
When it comes to choosing a credit card for your ecommerce business, your first choice is whether to just use one of the personal credit cards you already have or to get a dedicated business credit card. We’re a fan of the latter for all the reasons outlined earlier:
- Expense tracking
- Excellent rewards
- Build business credit
Beyond that, some cardholders are loyal to a particular brand, say American Express or Discover. Others may have had a good experience with a specific card issuer such as Chase, CapitalOne, or U.S. Bank, for example. All offer some type of small business credit card. (Visa and MasterCard don’t issue credit cards directly; instead they are issued by individual credit card issuers.)
What to look for in a business credit card for ecommerce
The first question to ask yourself is how you plan to use your business credit card.
Do you need access to low-cost financing for your ecommerce website? If so, look at the interest rate. Most credit cards carry a variable APR that will be based at least in part on the applicant’s personal credit scores. Some also offer introductory 0% APRs for purchases and/or balance transfers. Interest-free financing can be especially appealing for short-term financing for new projects or for startup ecommerce businesses.
If you plan to pay in full each month, check out rewards credit cards. Business credit cards can offer significant rewards, ranging from cash back rewards to travel rewards. In fact, business credit cards can be some of the most rewarding credit cards you can get.
What does it take to qualify for an ecommerce business credit card?
Almost every small business credit card issuer will check the applicant’s personal credit and most require good to excellent credit scores to qualify. (Most business credit cards require a personal guarantee.)
In addition, they will ask you about your income, including both business income and personal income so be prepared to answer questions about your personal finances. Many issuers will allow you to qualify based on total income, not just income from the business, which means ecommerce business credit cards are often startup-friendly.
You should also be prepared to share information about your business, including your Tax ID number (Employer Identification Number or EIN). If you operate a home-based business it’s fine to use your home address for your business address, though some ecommerce business owners prefer to use a business address, even if it’s just a mailbox address.
Other financing options for ecommerce businesses
A business credit card can provide fast and flexible financing for your online or ecommerce site. But there may be times when your business needs a small business loan instead. Or you may have bad credit that prevents you from getting a business credit card. In that case you’ll want to explore small business loans and other types of e-commerce financing. These include:
- Business cash advance: This type of financing (also known as a merchant cash advance) is based on your sales (typically credit or debit card sales). It does not require good credit and can be very fast but costs may be high.
- Lines of credit: Similar to a credit card, a line of credit allows you to access the funds you need and only pay interest on the amount you borrow. Available through banks and credit unions or online lenders.
- Equipment financing or leasing: Finance or lease equipment ranging from tech equipment to machinery to 3-D printers. Helps preserve cash flow and may offer tax advantages.
- Crowdfunding. If you have a product that others will want to back, crowdfunding can help you raise hundreds to millions of dollars. No credit check is likely required, but you will need a strong marketing campaign.
This article was originally written on September 8, 2021 and updated on February 24, 2022.
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