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How Many Business Credit Cards Should I Have?

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There is no magic number for the ideal amount of business credit cards. A small business should consider its needs, budget, and goals when deciding how many cards to have.

June 7, 2024
Author: NCH

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Establishing a successful business is a lot like building a house. The right tools are vital to create a strong foundation to withstand challenges.

Business credit cards, like versatile tools in your entrepreneurial toolbox, offer a range of benefits. They empower you to build business credit, earn rewards, and instill a sense of control and confidence in your financial management, saving you money in the long run.

With the vast array of cards available, you have to ask yourself one important question: how many business credit cards should I have?

Today, we’ll answer the key question of how many credit cards are too many and explore the different types of business credit cards you can apply for.

How Many Business Credit Cards Should I Have?

The ideal number of business credit cards your venture should have is a flexible concept entirely dependent on its unique needs, goals, and budget. There is no rigid, one-size-fits-all answer, allowing you to adapt and adjust as your business evolves.

Think of it this way: you want your toolbox to have the right tools for the job, but not so much that it becomes too heavy to carry around.

The same rule applies to business credit cards. You want to have enough cards to cover your essential expenses. Responsible financial management is key to paying your dues on time and not overextending yourself by having too many credit cards.

That said, it’s very common for a small business to have multiple business credit cards simultaneously.

Advantages & Disadvantages of Having Multiple Business Credit Cards

If done strategically, having different types of business credit cards will reap significant benefits for your venture, such as:

  • Access to More Funding: Business credit cards have revolving credit limits you can use repeatedly, allowing you to have a buffer for unexpected expenses or short-term cash flow gaps. If you use multiple cards responsibly, your credit limit will increase.
  • Get More Rewards: Multiple credit cards allow you to enjoy rewards programs like cash back, additional miles, and other similar perks. For example, with one card, you can get 5% cash back on office supplies and accumulate double the airline miles for your business travels with another.
  • Build Business Credit: The biggest benefit of using multiple cards is building business credit. Using several cards and simultaneously paying them on time shows credit bureaus and potential lenders that your business is financially responsible.
  • Improve Your Business Credit Score: Lenders typically base a business’s creditworthiness on their credit score. The higher your score is, the more creditworthy you are. If you properly manage your multiple credit cards, they can improve your business credit score.

But like anything else, there are drawbacks to having more than one business credit card:

  • Higher Interest: Business credit cards have higher interest rates than business loans and lines of credit. If you carry a balance on all of your cards with high interest rates, the fees they accumulate could significantly impact your bottom line.
  • More Cards to Manage: Tracking multiple credit cards can be challenging, especially if you have multiple rewards programs you want to take advantage of. You’ll have to create an organized record-keeping system to avoid missing payments.
  • Potential Impact on Personal Credit: A negative payment history on a business credit card could affect your credit score. This is especially true for sole proprietors or general partners.

Ultimately, the key to having multiple credit cards is maximizing rewards while maintaining responsible financial management.

Different Types of Business Credit Cards

There are different types of business credit cards you can apply for, each created for a specific need of businesses. Some examples include:

  • Cash Back Credit Cards: Cash-back business credit cards allow you to earn a percentage of your purchases back as cash. Some cards offer a flat rate cash-back, while others offer different returns.
  • Airline Credit Cards: Businesses who use airline credit cards for their travels can earn rewards or miles that they can use to get discounts or flights. The same rewards program applies to cards co-branded with a hotel chain.
  • General Rewards Credit Cards: General reward credit cards are typically offered by the bank that issued them. They allow you to earn rewards for business expenses like office supplies, travel, and more.
  • Secured Credit Cards: These cards are offered to ventures with limited or poor credit so that they can build or rebuild their credit history. They typically require a security deposit for collateral, and their credit limits are based on the amount of collateral the business has given.

Before applying for these cards, assess your needs and spending habits thoroughly. Consider your biggest expense categories and weigh any rewards programs against the card’s annual fees.

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By carefully considering these factors, you can strategically stack your credit cards.

When is The Best Time to Apply For Another Credit Card?

Before you apply for another business credit card, ask yourself the following questions:

Can I still make on-time payments?

The first question you must ask yourself is whether you can still make on-time payments on each card you have. Late payments on credit cards typically trigger late fees, while unpaid balances can accrue interest.

If your budget can only accommodate one credit card, stick with it for now. Avoid applying for another card if you can’t confidently say you can make on-time full payments on both.

Is the annual fee worth it?

Premium business credit cards typically have hefty annual fees, so before you apply for one, consider the value you can get from these charges. 

Sure, some cards have compelling introductory bonuses, but are you willing to pay hundreds of dollars yearly for a card you barely use?

What unique value does the new card offer?

You want to look for cards that give you different perks, not just better rewards than those you already have. Focus on finding cards that align with your spending habits and goals. This strategy is the key to maximizing your credit card portfolio.

Start Making Smart Money Moves Today

Ultimately, the number of business credit cards your small business should have depends on its needs, goals, and financial capabilities. While there’s no limit to the amount of cards you can apply for, striking a balance between earning rewards and maintaining control is vital.

If you need help finding the right business credit card for your growing venture, NCH’s credit experts are here to assist you. Our credit experts will evaluate your business’s financial health and guide you in curating a strong credit card portfolio.

Contact NCH today and let our credit experts help you make smart money moves. To learn more about our business credit services, visit our website here or call us at 1-800-508-1729. 

Disclaimer: The above material has been prepared for informational purposes only, containing opinions of the provider, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Please consider consulting tax, legal, and accounting advisors before engaging in any transaction.

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