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Credit Cards

Home Depot Credit Card vs. Lowe’s Credit Card

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any credit card issuer. This site may be compensated through a credit card issuer partnership.

Updated June 28, 2018

Home improvements can be extremely costly and many people don’t have the money to pay for them upfront so they look to special financing options like store credit cards. If you’re looking to make renovations to your home, there’s a good chance you’ve looked into buying supplies from two of the biggest home improvement retailers in the U.S. — Home Depot and Lowe’s. Both stores offer special financing options and discounts that you can utilize to make your purchases more affordable.

In this post, we compare the key features of the Home Depot Consumer Credit Card and the Lowe’s Advantage Card, and provide you with our top pick for your next home improvement project.

We also discuss a few alternative financing options because credit cards aren’t always the best financing option — especially if you can’t afford to pay them off quickly.

Home Depot Consumer Credit Card vs. Lowe’s Advantage Card


Home Depot Consumer Credit Card


Lowe’s Advantage Card


Winner


Annual Fee

None

None

Tie


Regular Purchase APR

17.99%-26.99% Variable

26.99% Variable

Home Depot (so long as your credit is good enough to score the better rate).


Everyday Financing

6 Months Every Day Financing on Purchases of $299 or More. No interest if paid in full within 6 months.*

6 months special financing on purchases of $299 or more. No interest if paid in full within 6 months.*

Tie


Project Financing

Up to 24 months during special promotions.*


(Note that Home Depot offers a Project Loan Card with a fixed rate and 84 months to pay off purchases.)

Special fixed-rate interest offers for 36, 60 or 84 months and on purchases of $2,000 or more.*

Lowe’s (they offer financing options greater than 24 months).


Fine print

“Interest will be charged to your account from the purchase date if the purchase balance is not paid in full within 6 months.”


This is called deferred interest and means you are responsible for all the interest you would have been charged during the 0% interest period if you carry a balance after the 6 months.

If you don’t pay in full within 6 months, “interest will be assessed on the promotional purchase from the purchase date.”


This is called deferred interest and means you are responsible for all the interest you would have been charged during the 0% interest period if you carry a balance after the 6 months.

Tie


New card member discount

Save $100 on your qualifying purchase of $1,000 or more. Valid 5/24-7/11/18.*

None

Home Depot


Everyday discount

No everyday discount, but rotating limited time offers for a variety of products and services.*

5% off your eligible purchase.*

Lowe’s (since Home Depot doesn’t offer a discount).

Apply Now Secured

on Home Depot’s secure website

Apply Now Secured

on Lowe’s secure website


The Overall Winner: Lowe’s Advantage Card


The Lowe’s Advantage Card is the winner in this comparison since it offers a consistent, everyday discount and several financing options. Both cards offer the same everyday financing option, but the Lowe’s Advantage Card offers more options for project financing, which may be more beneficial for a home financing project. The Home Depot Consumer Credit Card unfortunately doesn’t offer everyday discounts or long-term financing options past two years, though it does have the potential for a lower APR with its range; unlike the Lowe’s Advantage Card which only has one APR. All in all, the Lowe’s Advantage Card provides more benefits to consumers looking to finance a home improvement project.


Apply Now Secured

on Lowe’s secure website

*Terms and conditions apply.

What to know before you open a store card for home improvements

Focus on your needs vs. rewards. Prior to applying for a store card, try not to let the promise of a cushy reward offer cloud your judgment. Consider which store you shop more and which store card has offers that suits your needs best.

For example, if you’re planning on doing exterior installations like roofing, siding or windows, Home Depot has no interest if paid in full within 12 months on purchases of $5,000 or more (offer valid until 1/31/18). Meanwhile, Lowe’s offers 5% off your eligible purchase, which can be helpful if you plan on making numerous purchases below $299 — since the 5% discount can’t be combined with special financing discounts that start at $299.

Decide how long you need to finance your improvements. Home Depot and Lowe’s both offer different financing options where you can pay a fixed interest rate for up to 84 months. While the Home Depot Consumer Credit Card only offers up to 24 months financing, they have another card, the Project Loan card, offering 84 months financing at a fixed 7.99% with a 6-month buying window to purchase needed products and services. On the other hand, the Lowe’s Advantage card offers project financing on any in-store purchase of $2,000 or more: 36 fixed monthly payments at 3.99% APR until paid in full, 60 fixed monthly payments at 5.99% APR until paid in full or 84 fixed monthly payments at 7.99% APR until paid in full.

Review selection offerings. Another key point to consider is that one store may have a better rewards program, but you may prefer the selection of items at the other store.

Consider access to the retailer. If you’ve never shopped at either store, do some research to see which one has more items you need. Also, check out the location of the stores — Home Depot has over 2,200 while Lowe’s has over 1,700. It may not make sense to apply for a Lowe’s card and trek 30 minutes to the nearest store if there’s a Home Depot around the block.

Read the fine print. Another key point to look at are the terms and conditions for each card. You want to check if there are any unusual fees and what the interest rates are if you carry a balance. This information can be a deciding factor in your decision. As you can see from our review, both Home Depot and Lowe’s credit card offerings carry a deferred interest clause — if you don’t pay off your balance by the time the promotional period ends, you could get hit with a hefty interest charge.

Take note that a store card can only be used at the issuing store, meaning you will only be able to use a Home Depot credit card on Home Depot purchases. Meanwhile, regular credit cards have more flexibility and can be used anywhere.

Other ways to finance a home improvement project

There are several other options for you to utilize if you decide that a store card from Home Depot or Lowe’s isn’t the best choice. There are other types of credit cards you can choose, such as cards with long 0% intro periods or cashback cards that offer high rates. Besides credit cards, you can take out a personal loan, home equity loan or home equity line of credit. Below, we detail what other options you have for your home improvement project and the pros and cons associated with each.

0% Intro APR cards

An alternative to store cards are 0% intro APR cards, which provide a period of time for you to carry a balance without racking up interest. The better 0% intro APR cards have intro periods of 18 months, allowing you well over a year to pay off debt from new purchases. These cards often offer longer 0% intro periods than store cards, and although they won’t have store specific rewards, you can benefit greatly from the long intro period.

Pros:

  • Long intro periods: The 0% intro periods for these cards are longer than those provided by store cards and can provide you with as long as 18 months interest-free.
  • Wide acceptance: These cards can be used at any store, unlike store cards, which are restricted to the issuing store.

Cons:

  • Often lack rewards or store specific discounts: Many 0% intro APR cards lack rewards programs or don’t provide store specific discounts like the Home Depot or Lowe’s cards.

Cards to Consider

Citi Simplicity® Card - No Late Fees Ever

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The information related to Citi Simplicity® Card - No Late Fees Ever has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

Citi Simplicity® Card - No Late Fees Ever

Regular Purchase APR
16.99% - 26.99%* (Variable)
Intro Purchase APR
0%* for 12 months on Purchases*
Intro BT APR
0%* for 21 months on Balance Transfers*
Annual fee
$0*
Balance Transfer Fee
5% of each balance transfer; $5 minimum
Credit required
good-credit
Excellent/Good

Citi Simplicity® Card - No Late Fees Ever offers a competitive intro 0%* for 12 months on Purchases*, then 16.99% - 26.99%* (Variable) APR applies. This is one of the longest intro periods for purchases available and can provide you ample time to pay off your debt. Other great features of this card include no late fees, no penalty rate and a $0* annual fee. Although there are no rewards, the long 0% intro period can provide more benefit if you can’t pay off purchases within the short 0% periods of the Home Depot or Lowe’s cards.

U.S. Bank Visa® Platinum Card

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on US Bank’s secure website

U.S. Bank Visa® Platinum Card

Regular Purchase APR
14.74% - 25.74%* (Variable)
Intro Purchase APR
0%* intro for 18 billing cycles on Purchases*
Intro BT APR
0%* intro for 18 billing cycles on Balance Transfers*
Annual fee
$0*
Balance Transfer Fee
Either 3% of the amount of each transfer or $5 minimum, whichever is greater.
Credit required
good-credit
Excellent/Good

The U.S. Bank Visa® Platinum Card offers an 0%* intro for 18 billing cycles on Purchases* on purchases (after, 14.74% - 25.74%* (Variable) APR applies). This is a great length of time for you to pay off any purchases you make, regardless if they’re for home improvement or not. The APR range for this card has a low starting rate, promising if you have Excellent credit. Besides the 0% intro period, this card is fairly basic and has no rewards.Read our guide to the longest 0% purchase credit card offers and use our personalized tool to compare introductory 0% interest cards.

Cashback and rewards cards

Another alternative to a Home Depot or Lowe’s credit card may be cashback or rewards cards. These cards offer rewards for all your spending, with some offering higher rates on select purchases and 0% intro periods. Often, these cards provide more long-term value than a store card you may open since they don’t limit your purchases to select stores.

Pros:

  • Versatile rewards programs: These cards provide rewards or cashback programs that allow you to earn rewards on all your spending, regardless of where you shop. Some cards even offer high rates on certain purchases, like home improvements.
  • Wide acceptance: There are no restrictions on where you can use these cards, and you earn rewards on all purchases.

Cons:

  • No store discounts: Since these cards aren’t store cards, you most likely will not receive the same store discounts or rewards that a store card offers.

Cards to consider

The Farmers® Rewards Visa® Card from Comenity Bank

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on Comenity Bank’s secure website

The Farmers® Rewards Visa® Card from Comenity Bank

Annual fee
$0
Rewards Rate
3X points for $1 spent on Farmers products, 3X points for $1 spent on Fuel / Gas, 3X points for $1 spent on Home Improvement, 1X points for $1 spent everywhere else Visa is accepted
Regular Purchase APR
14.74% to 21.74% Variable
Credit required
good-credit
Excellent/Good

The Farmers® Rewards Visa® Card from Comenity Bank offers a high 3X points for $1 spent on Farmers products, 3X points for $1 spent on Fuel / Gas, 3X points for $1 spent on Home Improvement, 1X points for $1 spent everywhere else Visa is accepted. Each account anniversary you receive 1,000 points (equal to a $10 statement credit). Although you earn points, they can be redeemed as a statement credit with 1 point worth $.01. This card offers more flexibility than a Lowe’s or Home Depot card since it can be used anywhere. The intro period is also longer with a 0% introductory purchase APR for 12 months. After that your APR will be 14.74% to 21.74% Variable APR.

Citi® Double Cash Card – 18 month BT offer

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The information related to Citi® Double Cash Card – 18 month BT offer has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

Citi® Double Cash Card – 18 month BT offer

Annual fee
$0*
Rewards Rate
Earn 2% cash back on purchases 1% when you buy and 1% as you make payments for those purchases
Regular Purchase APR
15.74% - 25.74%* (Variable)
Credit required
good-credit
Excellent, Good

The Citi® Double Cash Card – 18 month BT offer is the trend setting flat-rate cash back card where you can earn cash back twice on every purchase. You Earn 2% cash back on purchases 1% when you buy and 1% as you make payments for those purchases. Points are redeemable for statement credit with 1 point worth $.01. This card allows you to earn a high, consistent cash back rate on all spending without limiting you to select categories or stores. With this card, you have the freedom to use it anywhere and can see more long-term value compared to a store card you may only use for a home improvement project.Read our roundup of the best cash back cards for every category and compare cash back cards.

Personal loans

Depending on your situation, a credit card may not be the best option; especially if you have less than perfect credit and can’t get approved. A personal loan is when you borrow a fixed amount of money for a fixed time period at a fixed rate.

Personal loans are a more liquid approach to financing a home improvement since you receive deposited money in your bank account. The interest rates for personal loans vary by issuer and your creditworthiness, but if you’re someone with excellent credit you may receive the lowest rates, with some issuers offering as low as 3.24% APR. That’s substantially lower than a credit card.

On the other hand, you may find some personal loan lenders willing to work with you if you have bad credit, although you are likely to get stuck with a pretty high APR. Some APRs can easily run above 30% on the high end.

Pros:

  • Better approval odds: If you’re someone with bad or fair credit, you may have an easier time qualifying for a personal loan compared with a credit card. Some personal loans either don’t have a minimum credit score or accept people with low scores.
  • Fixed interest rates: Unlike the majority of credit cards, personal loans have a fixed interest rate. You don’t have to worry about your rate increasing during your term.
  • May be able to check your rates without harming your credit: Some personal loans allow you to see if you prequalify by performing a soft pull of your credit. A soft pull doesn’t affect your credit score, and with many personal loans you can shop around for the best rate without harming your credit. Just be careful and read the disclaimers before you check to make sure it’s a soft pull — not a hard pull. Once you officially apply for a loan, they will do a hard pull.

Cons:

  • Origination fee: Some personal loans have origination fees. These fees are a percentage of the total loan amount. For example, a 1% origination fee on a $5,000 loan is $50.
  • Possible prepayment penalty: Some personal loans will charge a fee if you pay off your loan early, which can be more costly than riding out your term.

How to compare personal loan options

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LendingTree is our parent company

LendingTree

Loan Amount
up to $50,000
Term
24 to 60 Months
APR Range
As low as 3.99%
Origination Fee
Varies
Credit Required
Minimum 500 FICO®
Soft Pull
You can get your rate without hurting your score.

LendingTree is our parent company. LendingTree is unique in that you may be able to compare up to five personal loan offers within minutes. Everything is done online and you may be pre-qualified by lenders without impacting your credit score. LendingTree is not a lender.


A Personal Loan can offer funds relatively quickly once you qualify you could have your funds within a few days to a week. A loan can be fixed for a term and rate or variable with fluctuating amount due and rate assessed, be sure to speak with your loan officer about the actual term and rate you may qualify for based on your credit history and ability to repay the loan. A personal loan can assist in paying off high-interest rate balances with one fixed term payment, so it is important that you try to obtain a fixed term and rate if your goal is to reduce your debt. Some lenders may require that you have an account with them already and for a prescribed period of time in order to qualify for better rates on their personal loan products. Lenders may charge an origination fee generally around 1% of the amount sought. Be sure to ask about all fees, costs and terms associated with each loan product. Loan amounts of $1,000 up to $50,000 are available through participating lenders; however, your state, credit history, credit score, personal financial situation, and lender underwriting criteria can impact the amount, fees, terms and rates offered. Ask your loan officer for details.

As of 28-Feb-2019, LendingTree Personal Loan consumers were seeing match rates as low as 3.99% (3.99% APR) on a $10,000 loan amount for a term of three (3) years. Rates and APRs were based on a self-identified credit score of 700 or higher, zero down payment, origination fees of $0 to $100 (depending on loan amount and term selected).

LendingTree has a great feature where you can compare personal loans from multiple issuers within minutes. You can select home improvements from the drop-down menu when asked “How are you going to use the money?” and continue with the prompts until you receive your personalized loan rates. This tool performs a soft pull on your credit so your credit score will not be affected by comparing rates.

We have a personal loan calculator that can help you see if a personal loan is a good option for your home improvement project:

Check out where to get the best personal loan rates online and use our personalized tool to compare personal loans.

Home equity loan or home equity line of credit

You may have heard the terms home equity loan and home equity line of credit (HELOC) before, and are now considering them as options to finance your home improvement project. Before you decide, it’s a good idea to know what these home equity options are and how they can be helpful — and potentially harmful.

A home equity loan is similar to a personal loan where you have a fixed loan amount, with a fixed interest rate and fixed term — but a home equity loan is secured by your home. This means your home is collateral and if you don’t pay your loan, the lender can foreclose on your home.

Similar to a credit card, a HELOC provides you with a revolving line of credit where you can borrow money and you only make payments on what you borrow. Any funds borrowed are charged interest, and unfortunately, the interest rates are often variable, which means they can increase at any time. You can withdraw funds with a credit card or check linked to your account. And, like home equity loans, your home acts as collateral if you don’t pay off your HELOC.

Pros:

  • Fixed interest for home equity loans: When you borrow money with a home equity loan, you receive a fixed amount of money for a fixed term and a fixed interest rate. This creates stability when repaying your loan and you don’t have to worry about increasing interest rates.
  • Revolving line of credit for a HELOC: With a HELOC, you receive a revolving line of credit. Similar to a credit card, when you make charges and pay them off, your available credit is replenished.

Cons:

  • Your home is collateral: If you don’t pay off your loan, the lender can take action against your home and possibly foreclose. This is a big risk that other financing options on this list don’t have.
  • Look out for fees: Home equity loans and HELOC can come with numerous fees like origination fee, lender fee, application fee, appraisal fee and more. It’s a good idea to ask questions and read the terms before signing anything.
  • You need equity in your home to qualify: Most lenders require you to have a loan-to-value ratio of 80% or below. To get your LTV, it’s pretty simple: add the amount you want to borrow with a home equity loan to the amount you still owe on the home. Once you’ve got that figure, divide it by the market value of the home. Let’s say you’re looking for a $10,000 home equity loan and you owe $80,000 on your mortgage. If your home is currently valued at $200,000, that would give you an LTV of about 45%.
  • Watch out for refinancing: Some lenders may pressure you into refinancing a loan that you’re struggling to pay off. By refinancing, the lender benefits from charging you more fees and interest points that end up hurting you and increasing your debt.

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Alexandria White
Alexandria White |

Alexandria White is a writer at MagnifyMoney. You can email Alexandria at [email protected]

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Credit Cards

Unsecured Credit Cards for Bad Credit

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any credit card issuer. This site may be compensated through a credit card issuer partnership.

Unsecured cards are the most popular type of credit cards available — they are simply regular credit cards. The term “unsecured” means that you don’t need to deposit money or use any other collateral in order to receive a line of credit — credit card issuers extend credit based on your credit history and various other factors.

That’s why, if you have bad credit, it can be difficult to qualify for most good credit card deals. Poor credit is considered at or below a 579 credit score, and it signals to lenders that you’re a high-risk borrower.

Poor credit doesn’t make it impossible to access credit cards, however, but the key is to use credit responsibly so your credit score will improve and you’ll have a chance at qualifying for better deals.

We’ve put together this guide to help you understand the best options for people with bad credit.

Our top picks

Unsecured card: Credit One Bank® Platinum Visa® with Cash Back Rewards

Credit One Bank® Platinum Visa® with Cash Back Rewards

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on Credit One Bank’s secure website

Credit One Bank® Platinum Visa® with Cash Back Rewards

Regular Purchase APR
20.24% - 26.24% Variable
Annual fee
$0-$99
Rewards Rate
1% on eligible purchases, terms apply

Credit One is hardly the best credit card out there, with a host of potential fees that make it expensive to carry. On the plus side, however, it is accessible to those with poor credit. It offers several cards that carry the potential for 1% on eligible purchases, terms apply. People with bad credit will find it hard to qualify for credit cards and harder to qualify for cards with rewards. Therefore, the cashback feature is a good perk of Credit One cards. But remember — not everyone will qualify for a cashback card.

Terms

  • Regular purchase APR: 20.24% - 26.24% Variable
  • Cash advance APR: 26.24% Variable
  • Annual membership fee: $0-$99
    Depending on your account, the annual membership fee will be divided into 12 equal portions and billed monthly or it will be billed yearly for the second and each following year your account is open
  • Authorized user participation fee: $19 annually (if applicable)
  • Cash advance fee: Either $5 or 8% of the amount of each Cash Advance, whichever is greater, or $10 or 3% of each Cash Advance, whichever is greater.
  • Late payment fee: Up to $39
  • Returned payment fee: Up to $39

What to watch out for

The annual fee will hit your account right away — eating into your total available limit. The fine print of the terms and conditions explains:

NOTICE: If your Account has an Annual Membership Fee, it will be billed to your Account when it is opened and will reduce the amount of your initial available credit. For example, if your Account is established with a credit line of $300 and your First year Annual Membership Fee is $75, your initial available credit will be $225.

This is key to realize if you are charged an annual membership fee. You can quickly see your credit limit decrease when opening your account; especially if you are charged the highest annual fee.

Another term to be aware of is the authorized user participation fee at $19 annually. Most personal credit cards do not charge a fee for authorized users so this is an added fee Credit One charges if you decide to add an authorized user.

Secured card: Discover it® Secured

Discover it® Secured

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on Discover Bank’s secure website

Rates & Fees

Read Full Review

Discover it® Secured

Regular APR
25.24% Variable
Annual fee
$0
Rewards Rate
2% cash back at gas stations and restaurants on up to $1,000 in combined purchases every quarter, automatically. 1% unlimited cash back on all other purchases.
Minimum Deposit
$200
Credit required
bad-credit
Poor/New

The Discover it® Secured is our top pick for secured cards for numerous reasons — from the automatic monthly account reviews starting at 8 months to the cashback program, this card provides exceptional benefits for cardholders.

Pros:

  • Automatic monthly account reviews: Starting at 8 months, Discover will review your account to see if you qualify for receiving your security deposit back. If you have responsible credit management across all your credit products, you may be graduated to an unsecured card and recieve your security deposit back.
  • Cashback program: This card has a unique feature that’s uncharacteristic of secured cards — a cashback program where you can earn 2% cashback at restaurants or gas stations on up to $1,000 in combined purchases each quarter. Plus, 1% cashback on all your other purchases.
  • Free FICO® Credit Score: You receive your free FICO® Credit Score with Discover Credit Scorecard as well as other credit information, like recent inquiries and revolving utilization. This is a great way to track your credit progress and checking your score doesn’t affect hurt your credit.

Cons:

  • High APR: Most secured cards have high APRs, and this one does, too. But, if you pay your balance in full each month, you won’t be charged interest.

Read our review of the Discover it® Secured. 

The risks of unsecured cards for bad credit

The majority of unsecured cards that accept people with bad credit have numerous fees that can have you questioning if the card is really helping you.

Here are several drawbacks you may see with unsecured cards for bad credit:

  • High APRs: Typical cards have APR ranges that max out around 25%, but unsecured cards for bad credit can have APRs near 30%. Also, since you have bad credit, you most often will receive the highest APR listed in the terms and conditions.
  • Annual fee: Many credit cards in general have annual fees, but this can often be outweighed by the added benefits provided. However, unsecured cards for bad credit often lack the added benefits that cards for good credit offer.
  • Program or processing fee: Unsecured cards for bad credit often charge a program or processing fee that serves to open your account and lets you access your credit. This is something you won’t find with unsecured cards from major banks and credit card issuers.
  • Monthly service fee: This fee is characteristic of some unsecured cards and is another cost you have to keep in mind before applying since it can effectively lower your line of credit.

Credit card options when you have bad credit

Store credit cards

Odds are you’ve been asked to apply for a credit card while checking out at a store or online. The card offers often entices you with a rewards program or discount on your current purchase, and gets you thinking if you should apply. The card that you’re being offered is a store credit card and these cards can only be used at the issuing store. Since they are more likely to approve you compared with regular credit cards, they may seem like an easy way to establish credit, but there are some pitfalls to keep in mind.

Pros:

  • Good approval odds: Store cards are more likely to extend you credit than regular credit cards.
  • Rewards and discounts: Store cards often give you rewards for each purchase you make and send you card member discounts. This can be a great way to save money at stores where you frequently shop.

Cons:

  • Limited use: You most likely can only use your card in the issuing store. For example, a Target REDcardTM Credit Card can only be used for Target purchases.
  • High interest rates: Store cards tend to have higher interest rates than regular cards, so make sure you pay your statements in full and on time to avoid interest charges.

Store card options

Walmart Credit Card®

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on Walmart’s secure website

Walmart Credit Card®

Regular Purchase APR
19.15% - 25.15% Variable
Annual fee
$0
Rewards Rate
Save 3% on Walmart.com purchases including Grocery Pickup, 2% on Murphy USA & Walmart gas, and 1% at Walmart & anywhere your card is accepted.

Target REDcard™ Credit Card

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on Target’s secure website

Target REDcard™ Credit Card

Regular Purchase APR
25.15% Variable
Annual fee
$0
Rewards Rate
5% at Target & Target.com

Lowe’s Advantage Card

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on Lowe’s secure website

Lowe’s Advantage Card

Regular Purchase APR
26.99% Variable
Annual fee
$0
Rewards Rate
Get 5% off your eligible purchase or order charged to your Lowe’s Advantage Card.

Home Depot Consumer Credit Card

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on Home Depot’s secure website

Home Depot Consumer Credit Card

Regular Purchase APR
17.99%-26.99% Variable
Annual fee
$0

Secured credit cards

A secured credit card requires you to deposit money upfront, which acts as collateral in case your account defaults. The amount you deposit typically becomes your line of credit. For example, if you put down a $200 security deposit, that means you likely have a $200 credit limit; deposit more and your credit limit will increase. Typical security deposits are $200, but you can be asked to deposit more or less depending on the card.

Pros:

  • Less chance of overspending: Since your credit limit is equal to the amount you deposit, it’s unlikely you will have a high credit limit. This can prevent you from charging large amounts and falling into debt.
  • Great way to build or improve: Secured cards are our favorite way to build or improve credit since you are more likely to be approved for a secured card with bad credit, and you can see your score rise with proper credit behavior and spending as little at $10 a month.

Cons:

  • Security deposit required: You may not have the money available for the required security deposit, therefore possibly ruling out your chances of a secured card.
  • Low credit limit: Your line of credit is equal to your security deposit and most people don’t have the money available to deposit hundreds or thousands of dollars, making your available line of credit lower than unsecured cards.

Secured card options

Capital One® Secured Mastercard®

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on Capital One's website

Capital One® Secured Mastercard®

Regular Purchase APR
26.99% (Variable)
Annual fee
$0
Minimum Deposit
$49, $99, or $200

The Capital One® Secured Mastercard® is a good option for people who may not be able to afford a $200 security deposit since they also offer a $49 or $99 deposit — but take caution that you don’t choose your deposit, Capital One® does. So you may not receive the lower deposit.

Pros:

  • Potentially low security deposit: You may qualify for a $49 or $99 deposit instead of the $200 deposit depending on your creditworthiness. If you qualify for one of the lower deposits, you will still receive a $200 line of credit.
  • Access to a higher credit line: When you make your first 5 monthly payments on time, you receive a higher credit line.
  • Account reviews: Capital One® reviews your account to see if you can be transitioned to an unsecured card and receive your deposit back. However, there is no set time frame for when your account will be reviewed.

Cons:

  • High APR: Similar to other secured cards, this card has a high APR that can be an issue if you carry a balance. A good rule of thumb is to pay each bill in full and on time to avoid interest charges.

Read our review of the Capital One® Secured Mastercard®.

Credit builder loans

A credit builder loan is when a lender (typically a credit union) puts funds into a savings account or CD and a borrower makes monthly payments until the amount is paid off. Typically, the borrower cannot access the funds until the balance is paid in full. Your savings act as collateral for the lender, so if you don’t make payments they know they won’t lose money.

The monthly payments you make include interest fees and often occur over a 12-, 18- or 24-month term. Credit builder loans can be a good way for you to improve your credit score and act as a forced savings since you can’t withdraw funds until you repay the amount you borrowed.

Pros:

  • Report to the credit bureaus: Credit builder loans report to the major credit bureaus, allowing you to rebuild or establish credit history — as long as you follow the terms of your loan and make timely payments.
  • Source of savings: Since the funds are placed in a savings account or CD, you have a forced savings that is accessible at the end of the loan term.

Cons:

  • Funds are locked: You can’t withdraw money borrowed until your loan is paid off. So if you need money upfront, a credit builder loan isn’t a good option.

Options

Self Lender

Credit builder loans at Self Lender offer 12 or 24 month loans where you pay back a loan from $526 to $1,700. Funds are deposited into a CD that’s FDIC-insured and earns interest. However, you cannot access the funds until the loan is paid off. There is a $15 non-refundable administration fee that you pay when you open your account. After that, you pay equal monthly payments for the term of your account (these payments include interest charges). Once you pay off the amount borrowed, you can access your funds plus interest earned.

Republic Bank

At Republic Bank, you can take out a credit builder loan for 12, 18 or 24 months with loan amounts of $500, $1,000 or $1,500. Your funds are placed in a CD that earns interest and is only accessible once the loan is paid. There is a $10 processing fee when you open your account. When you complete your monthly payments (which include interest), you can either withdraw your funds or leave them in a CD.

Unsecured credit card options for bad credit

An unsecured credit card is simply a regular credit card. Unlike secured cards, there is no minimum security deposit required to access a line of credit. These cards often provide higher credit limits than secured cards and can help you build credit when used responsibly.

Pros:

  • You won’t need to make a deposit to access your line of credit.
  • Unsecured cards typically have higher credit limits than secured cards. And, the two cards mentioned below both have credit limits starting at $300.

Cons:

  • Many secured cards for bad credit come with annual fees, so you’ll have to make sure the fee is worth it. If the unsecured card has an annual fee but no rewards, look for alternatives.

Capital One® QuicksilverOne® Cash Rewards Credit Card

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on Capital One’s website

Capital One® QuicksilverOne® Cash Rewards Credit Card

Annual fee
$39
Rewards Rate
1.5% Cash Back on every purchase, every day
Regular Purchase APR
26.96% (Variable)
Credit required
fair-credit
Average/Fair/Limited

The Capital One® QuicksilverOne® Cash Rewards Credit Card is a good unsecured card for those looking to earn cash back while building credit — just watch out for the $39 annual fee.

Pros:

  • You can earn 1.5% cash back on every purchase, every day. This is a decent rate considering this is a card for those with average/fair/limited credit.
  • When you make your first five monthly payments on time, you receive a higher credit line.

Cons:

  • This card comes with a $39 annual fee. Annual fees are common for cards aimed at people with poor credit, but you can find cards without annual fees like the Capital One® Platinum Credit Card mentioned below. With this card, if you spend $2,600 a year, you’ll earn enough cash back to recoup the fee.
  • This card comes with a high APR that can be an issue if you carry a balance. Try to always pay on time and in full so you don’t incur interest charges.

Capital One® Platinum Credit Card

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on Capital One’s website

Capital One® Platinum Credit Card

Annual fee
$0
Rewards Rate
Non-rewards Card
Regular Purchase APR
26.96% (Variable)
Credit required
bad-credit
Average/Fair/Limited

The Capital One® Platinum Credit Card is a decent option if you want a no-frills, unsecured credit card that can allow you to build credit without the distraction of rewards.

Pros:

  • When you make your first five monthly payments on time, you receive a higher credit line.
  • This card is no-frills, but that may be the best option for you if you think you may be tempted to overspend with a rewards card. You can use this card to build credit and work toward a higher credit score.

Cons:

  • Similar to most cards for less-than-stellar credit, there is a high APR. However, if you pay your balance on time and in full each month, this won’t be an issue.

Total VISA® Credit Card

Total VISA® Credit Card

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on TOTAL’s secure website

Terms and Conditions

Total VISA® Credit Card

Annual fee
See Terms
Regular Purchase APR
See Terms
Credit required
bad-credit
Bad Credit
The Total VISA® Credit Card is also accessible to those with poor credit, but it comes at a steep price —  a long list of fees. Apply with caution.

Terms

  • Regular purchase APR: See Terms
  • Cash advance APR: See Terms
  • Program fee: If approved, just pay an $89.00 program fee to open your account and access your available credit.
  • Annual Fee: See Terms
  • Monthly servicing fee: None for first year (introductory). After that, $75 annually ($6.25 per month).
  • Additional card fee: $29 annually (if applicable)
  • Cash advance fee: None for first year (introductory). After that, either $5 or 5% of the amount of each cash advance, whichever is greater.
  • Late payment fee: Up to $39
  • Returned payment fee: Up to $39

What to watch out for

The Total VISA® Credit Card has numerous fees that make this card quite expensive to use, and many fees are not typical of mainstream credit cards. The APR is one of the highest on the market (See Terms for APR), and typical credit cards have APRs that max out around 25%.

Similar to Credit One, the annual fee (See Terms) for the Total VISA® Credit Card is deducted from your initial credit line, lowering your available credit until the fee is paid off:

Notice: The Annual Fee will be assessed before you begin using your card and will reduce the amount of credit you initially have available. Based on your initial credit limit of $300.00, your initial available credit will only be $225.00 (only $196.00 if you choose to have an additional card).

There is a monthly servicing fee of $75 annually ($6.25 per month) associated with this card that is quite steep and characteristic of cards for bad credit. Also, if you take out additional cards, you will be charged $29 annually. Considering the program fee, annual fee and monthly service fees, you’re looking at a jaw-dropping amount of fees with this card. In the first year, if you’re only considering the program and annual fee, you would be charged $164 and subsequent years would incur $123 in fees from the annual fee and monthly servicing fees.

Finally, watch out for the credit limit increase fee. Once your account has been open at least a year, Total VISA can charge you a 20% fee on credit limit increases. For example, if your limit is increased by $100, that’s a $20 fee.

Learn more

How to build credit

As someone with bad credit, it’s important to practice responsible credit behavior and follow several rules so you can improve your credit.

  1. Pay your bills on time: When you receive a bill, pay it as soon as possible and always before the due date. By paying on time, you won’t be charged a late payment fee and the lender won’t have to report your bad credit behavior to the credit bureaus. Use autopay features or set calendar alerts so you don’t forget.
  2. Pay your statement balance in full every month: Don’t carry a balance on your card because you’ll be charged interest on any overdue amounts and can fall into debt.
  3. Don’t max out your card: If you receive a $500 credit limit, don’t spend the full amount each month because that shows lenders you’re a risky client and negatively impacts your credit score. The amount of your available credit you use is known as utilization and the goal is to have a 20% or lower utilization rate — so spend $100 on a card with a $500 credit limit.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Alexandria White
Alexandria White |

Alexandria White is a writer at MagnifyMoney. You can email Alexandria at [email protected]

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Credit Cards

Best Small Business Credit Cards in July 2019

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any credit card issuer. This site may be compensated through a credit card issuer partnership.

Small business credit cards not only make it easier to separate personal and business finances, they offer business owners advantages they may not need or be able to get with a personal credit card. You might find the number of business credit card options overwhelming, so identifying your priorities will help you choose. Do you want rewards? Or do you merely need a card for short-term financing? The best small business credit card for you will depend entirely on your needs and goals.

Best small business credit cards for financing

0% intro APR financing

When to consider business cards with intro 0% financing: A business card with an intro 0% APR period can save you hundreds of dollars on interest compared to cards without 0% APR introductory periods. During the intro period, new purchases won’t accrue interest, and you can take your time paying off large purchases such as laptops and desks for your business.

The Blue Business℠ Plus Credit Card from American Express

The information related to The Blue Business℠ Plus Credit Card from American Express has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

The Blue Business℠ Plus Credit Card from American Express

Regular Purchase APR
15.49% - 21.49% Variable
Intro Purchase APR
0% for 12 Months
Annual fee
$0
Rewards Rate
2X Membership Rewards® points on everyday business purchases such as office supplies or client dinners. 2X applies to the first $50,000 in purchases per year, 1 point per dollar thereafter.
Credit required
good-credit
Excellent/Good

Why we like it: The Blue Business℠ Plus Credit Card from American Express offers small business owners the chance to finance new purchases with the longest intro period for purchases of any business card at intro 0% for 12 Months; 15.49% - 21.49% Variable APR after. Plus, you can earn rewards, receive purchase protection and get extended warranties — all with a $0 annual fee.

What to watch out for: You can lose the intro APR if a penalty APR applies to your account for any reason. To avoid this, always pay your minimum amount due.

Low interest rate

When to consider business cards with low interest rates: The Bank of America® Platinum Visa® Business credit card has the lowest APR at 11.49% - 22.49% Variable APR. If you find your business has to carry a balance from time to time, it can be beneficial to have a low interest credit card that won’t cause you to rack up as much interest as other cards. But as a rule of thumb, try to pay your balance in full every month to avoid interest charges.

Why we like it: If you qualify for the lowest rate on the Bank of America® Platinum Visa® Business credit card and end up carrying a balance, you’ll be charged substantially less interest than other cards with high APRs. Although there are no rewards, new accounts can earn an $300 statement credit when you make at least $3,000 in net purchases within 90 days of your account opening That’s the lowest spending requirement to get a bonus on a business card.

What to watch out for: You may not qualify for the lowest rate because the APR varies based on your personal or business’ credit worthiness.

The information related to Bank of America® Platinum Visa® Business credit card has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

Cash flow management

When to consider a business card for cash flow management: Some small businesses may not have a consistent cash flow, and that’s where a card with a flexible payment option comes in handy. You may be allowed to carry a balance interest free until your next statement if you make the minimum payment.

The Plum Card® from American Express

The information related to The Plum Card® from American Express has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

The Plum Card® from American Express

Regular Purchase APR
N/A
Annual fee
$0 introductory annual fee your first year, then $250.
Rewards Rate
Get a 1.5% discount when you pay early, with no cap on what you can earn back.
Credit required
good-credit
Excellent/Good

Why we like it: The Plum Card® from American Express has an uncommon payment option where as long as you pay your minimum due, you can pay your balance in up to 60 days without accruing interest (terms apply). This ‘grace period’ is uncharacteristic of business cards (and all cards in general), providing you with twice as much time as other cards do to pay off your statement without incurring interest charges. There are no rewards, but you can Get a 1.5% discount when you pay early, with no cap on what you can earn back.

What to watch out for: To benefit from the extra-days-to-pay feature, make sure you pay your minimum due, or else you’ll miss out on the offer. Also, make sure this card is the best choice for your business because there’s a $0 introductory annual fee your first year, then $250.

Imperfect credit

When to consider a business card for imperfect credit: If you or your business has less-than-good credit, odds are you’ll not only have trouble qualifying for a credit card, but the terms you do qualify for won’t be ideal. However, you’re not out of luck — we found a card that considers small businesses with imperfect credit, and it has decent terms plus the foundation for you to improve your credit with responsible behavior.

Capital One® Spark® Classic for Business

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on Capital One’s website

Capital One® Spark® Classic for Business

Annual fee
$0
Rewards Rate
1% Cash Back on every purchase
Regular Purchase APR
25.24% (Variable)
Credit required
bad-credit
Average/Fair/Limited

Why we like it: The Capital One® Spark® Classic for Business is for business owners with Average/Fair/Limited credit. Capital One considers Average/Fair/Limited credit as someone who’s defaulted on a loan in the past five years or has limited credit history (holding credit for less than three years). So, if you or your business has less-than-perfect credit, you may have better odds qualifying for this card compared to the majority of business cards, which require good or excellent credit.

What to watch out for: Although this card states it’s for business owners with Average/Fair/Limited credit, that does not guarantee you will be approved. As with any credit application, lenders look at a variety of credit factors.

Available for service members

When to consider business cards for service members: The following business credit cards are provided by credit unions for service members and have added perks, such as low interest rates, rewards, special offers and discounts. These cards require credit union membership, but you can typically qualify depending on where you live or work.

Navy Federal Credit Union Visa® Business Card

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on Navy Federal Credit Union’s secure website

Navy Federal Credit Union Visa® Business Card

Regular Purchase APR
10.15% - 18.00% Variable
Annual fee
$0
Rewards Rate
Rewards up to 1% return on each dollar spent
Credit required
excellent-credit
Good/Excellent

Why we like it: The Navy Federal Credit Union Visa® Business Card has a $0 annual fee and provides an up to 15% discount on qualifying business purchases with Visa SavingsEdge®. You can receive discounts at restaurants, travel and shipping services, IT solutions and more at no additional cost. As a member of NFCU, you can also receive a discount on Geico auto insurance and access an Auto Buying Program where you can save on new and used cars — great if your business requires you and your employees to drive. Terms & limitations apply.

What to watch out for: The interest rate you receive depends on your creditworthiness, so you may not receive the lowest APR. Because membership is restricted, check here to see if you qualify for membership with Navy Federal Credit Union.

Navy Federal Credit Union Mastercard® Business Card

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on Navy Federal Credit Union’s secure website

Navy Federal Credit Union Mastercard® Business Card

Regular Purchase APR
10.15% - 18.00% Variable
Annual fee
$0
Rewards Rate
Rewards up to 1% return on each dollar spent
Credit required
excellent-credit
Excellent

Why we like it: The Navy Federal Credit Union Mastercard® Business Card has the Mastercard Easy Savings® Program, which provides you with an up to 10% discount on a wide range of purchases including car rentals, gas purchases, products and services like Bing Ads and Monster, and more. This can simply save your business money on everyday purchases and the program is free. NFCU members have access to perks that suit businesses that require driving for work, like the ability to save on Geico auto insurance and access to an Auto Buying Program where you can receive savings on new and used vehicles. Terms & limitations apply.

What to watch out for: The APR varies based on your creditworthiness, so you may not qualify for the lowest rate. Because membership is restricted, check here to see if you qualify for membership with Navy Federal Credit Union.

RBFCU Business Select Mastercard® credit card

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on Randolph-Brooks Federal Credit Union’s secure website

RBFCU Business Select Mastercard® credit card

Regular Purchase APR
12.15% - 18.00% Variable
Annual fee
$0
Rewards Rate
2% cash back on all purchases
Credit required
good-credit
Excellent/Good

Why we like it: The RBFCU Business Select Mastercard® credit card has a great cashback program with unlimited 2% cash back on all purchases. This flat rate is rare among business cards that tend to favor high rates only on select purchase categories. In addition to a cashback program, members of RBFCU can benefit from members-only pricing at select merchants like TurboTax® and Sprint® to save your business additional money. Terms apply.

What to watch out for: Not everyone will qualify for membership with RBFCU, so fill out this online form to check.

Best small business rewards credit cards

Travel perks

When to consider travel business cards: If you or your employees travel often, a travel card can be more valuable than typical credit cards because many offer travel insurance, airline fee credits, free Wi-Fi access and other travel-related perks.

The Business Platinum® Card from American Express

The information related to The Business Platinum® Card from American Express has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

The Business Platinum® Card from American Express

Regular Purchase APR
N/A
Annual fee
$595
Rewards Rate
5X Membership Rewards® points on flights and prepaid hotels on amextravel.com and 1.5 Membership Rewards® points per dollar on each eligible purchase of $5,000 or more.
Credit required
good-credit
Excellent/Good
Welcome Offer: 75,000 Membership Rewards® points after you spend $10,000 and an extra 25,000 points after you spend an additional $10,000 all on qualifying purchases within your first 3 months of Card Membership..

Why we like it: We looked at business cards that offered travel perks, and The Business Platinum® Card from American Express emerged as the best overall business travel card because of its extensive benefits for business owners, including rewards potential, Welcome Offer, and added perks. You can take advantage of standout perks like access to over 1,200 airport lounges, credit for Global Entry or TSA Precheck and a $200 airline fee credit. Terms apply. These benefits can save your business a substantial amount of money and make travel less of a hassle.

What to watch out for: There is a steep $595 annual fee for this card. However, considering the value you receive with this card, the annual fee may be worth it. For example, the airline fee credit and Global Entry fee credit are valued at $300, decreasing the effective annual fee for this card in the year you use those credits.

Ink Business Preferred℠ Credit Card

The information related to Ink Business Preferred℠ Credit Card has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

Ink Business Preferred℠ Credit Card

Regular Purchase APR
18.24% - 23.24% Variable
Annual fee
$95
Rewards Rate
Earn 3 points per $1 on the first $150,000 spent in combined purchases on travel, shipping purchases, Internet, cable and phone services, advertising purchases made with social media sites and search engines each account anniversary year. Earn 1 point per $1 on all other purchases—with no limit to the amount you can earn.
Credit required
excellent-credit

Excellent

Why we like it: The Ink Business Preferred℠ Credit Card allows you to increase the value of your points by 25% when you redeem for travel through Chase Ultimate Rewards®. This is a great way to increase the effective value of your points. Additional travel benefits include trip cancellation/trip interruption insurance and travel and emergency assistance services.

What to watch out for: The higher rewards rate only applies to select categories, so if you primarily spend outside the select categories, you’ll earn a subpar cashback rate. Consider other travel business cards that suit your spending more.

Capital One® Spark® Miles for Business

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on Capital One’s website

Capital One® Spark® Miles for Business

Regular Purchase APR
19.24% (Variable)
Annual fee
$0 intro for first year; $95 after that
Rewards Rate
2 Miles per $1 on every purchase, everywhere
Credit required
excellent-credit
Excellent

Why we like it: The Capital One® Spark® Miles for Business offers a hard-to-find flat-rate rewards program at 2 Miles per $1 on every purchase, everywhere. This rate allows you and your employees to earn the same amount of miles on any purchase with no bonus categories or caps. You can easily redeem miles for travel, and there is no minimum redemption amount.

What to watch out for: This card comes with an annual fee at $0 intro for first year; $95 after that, and although it’s lower than most travel business cards, it may not be ideal for everyone. Keep in mind you will need to spend $4,750 a year (after year one) to recoup the fee.

Big intro bonuses

When to consider business cards with big intro bonuses: A large intro bonus can be a simple way for business owners to earn extra rewards within the first few months of account opening — as long as you fulfill the requirements. You can use the rewards you earn in a variety of ways, from travel to statement credits that can lower your business’ expenses. Many cards that have big intro bonuses also have good rewards and perks, providing long-term value in addition to the short-term reward.

Ink Business Preferred℠ Credit Card

The information related to Ink Business Preferred℠ Credit Card has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

Ink Business Preferred℠ Credit Card

Regular Purchase APR
18.24% - 23.24% Variable
Annual fee
$95
Rewards Rate
Earn 3 points per $1 on the first $150,000 spent in combined purchases on travel, shipping purchases, Internet, cable and phone services, advertising purchases made with social media sites and search engines each account anniversary year. Earn 1 point per $1 on all other purchases—with no limit to the amount you can earn.
Credit required
excellent-credit

Excellent

Intro bonus: Earn 80,000 bonus points after you spend $5,000 on purchases in the first 3 months from account opening.

What to watch out for: There are requirements that you need to follow in order to receive the intro bonus, so make sure you spend the required amount in the stated time period. Also, you miss out on added value by redeeming points outside of Chase Ultimate Rewards, so try to use the portal to receive the 25% more value on travel.

The Business Platinum® Card from American Express

The information related to The Business Platinum® Card from American Express has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

The Business Platinum® Card from American Express

Regular Purchase APR
N/A
Annual fee
$595
Rewards Rate
5X Membership Rewards® points on flights and prepaid hotels on amextravel.com and 1.5 Membership Rewards® points per dollar on each eligible purchase of $5,000 or more.
Credit required
good-credit
Excellent/Good
Welcome Offer: 75,000 Membership Rewards® points after you spend $10,000 and an extra 25,000 points after you spend an additional $10,000 all on qualifying purchases within your first 3 months of Card Membership..

What to watch out for: You need to satisfy two spending requirements to earn the full welcome offer — so make sure you understand the details of both if you don’t want to leave points on the table.

CitiBusiness®/ AAdvantage® Platinum Select® World Mastercard®

The information related to CitiBusiness®/ AAdvantage® Platinum Select® World Mastercard® has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

CitiBusiness®/ AAdvantage® Platinum Select® World Mastercard®

Regular Purchase APR
17.99% - 25.99%* (Variable)
Annual fee
$99, waived for first 12 months*
Rewards Rate
2 AAdvantage® miles per $1 spent on purchases at telecommunications merchants, cable and satellite providers, car rental merchants and at gas stations*, Earn 1 AAdvantage® mile per $1 spent on other purchases*

 

Sign-up Bonus: Earn 60,000 American Airlines AAdvantage® bonus miles after making $3,000 in purchases in first 3 months of account opening*.

Why we like it: The CitiBusiness®/ AAdvantage® Platinum Select® World Mastercard® is one of few airline-specific business cards. This card has the largest limited-time offer compared to competitors and a typical spending requirement. In addition, there are great perks when you fly on American Airlines, such as in-flight discounts, first checked bag free and preferred boarding.

What to watch out for: This is an airline-specific card — if you don’t fly with American Airlines, you’ll miss out on some of the best perks.

Cashback rewards

When to consider cashback business cards: Cash back is a simple and straightforward way for your business to be rewarded for purchases. You can easily redeem your cash back as a statement credit, which is a great way to reduce your bill (just remember that redemptions can’t be applied to minimum payments).

Capital One® Spark® Cash for Business

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on Capital One’s website

Capital One® Spark® Cash for Business

Regular Purchase APR
19.24% (Variable)
Annual fee
$0 intro for first year; $95 after that
Rewards Rate
2% Cash Back for your business on every purchase, everywhere
Credit required
good-credit
Excellent/Good

Why we like it: We looked at business credit cards offering cashback rewards and analyzed their rewards rates, fees and APRs, and among the group, The Capital One® Spark® Cash for Business rose to the top. It has a standout cashback program earning you 2% Cash Back for your business on every purchase, everywhere. There are no bonus categories or caps — you’ll earn the same rate on every purchase. You can even make redeeming your rewards simple by setting up automatic redemption, great for businesses that don’t want to fuss with rewards.

What to watch out for: The annual fee is $0 intro for first year; $95 after that — so after year one, you will need to spend $4,750 a year to break even.

Capital One® Spark® Cash Select for Business

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on Capital One’s website

Capital One® Spark® Cash Select for Business

Annual fee
$0
Rewards Rate
1.5% Cash Back on every purchase
Regular Purchase APR
15.24% - 23.24% (Variable)
Credit required
good-credit
Excellent/Good

Why we like it: The Capital One® Spark® Cash Select for Business has a decent rewards rate for business owners who want to avoid an annual fee at 1.5% Cash Back on every purchase. This card is a good alternative to the Capital One® Spark® Cash for Business, offering all the same perks plus a $0 annual fee.

What to watch out for: The cash back rate is below the ideal 2%, and you can do better with a higher flat-rate card or with bonus category cards. But be aware they may have an annual fee.

Hotel rewards

When to consider business cards with hotel rewards: Traveling for business can get costly, but hotel rewards cards can help you save money on hotel stays and other expenses you may incur like meals. Whether you favor a specific hotel or often choose the best priced hotel, there are business cards for you that can earn you rewards and other money-saving discounts. In this section we’re highlighting a card with exceptional hotel rewards.

The Hilton Honors American Express Business Card

The information related to The Hilton Honors American Express Business Card has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

The Hilton Honors American Express Business Card

Regular Purchase APR
17.99% - 26.99% Variable
Annual fee
$95
Rewards Rate
12X at hotels and resorts in the Hilton portfolio, 6X on Select Business & Travel Purchases, 3X Everywhere Else. Terms & Limitations Apply.
Credit required
good-credit
Excellent/Good

Why we like it: The Hilton Honors American Express Business Card offers great benefits for business travelers who frequent hotels in the Hilton portfolio with a wide range of perks including complimentary Hilton Honors Gold Status. This gives you an 85% bonus on Base Points, space-available room upgrades and more benefits that may make your stays more comfortable. Other Hilton perks include a rewards program that allows you to earn Hilton Honors Bonus Points at a fast rate and Weekend Night Rewards (terms apply). In addition, you receive baggage and travel accident insurance, 10 free visits to over 1,000 Priority Pass airport lounges every year and the ability to connect your credit card transactions to Quickbooks®, among other things.

What to watch out for: You don’t want to carry a balance with this card because there is a 17.99% - 26.99% Variable APR. Although this is a typical range, it’s still high and can lead to large interest charges if you don’t pay your bill in full. But, if you pay in full and on time, this won’t be an issue.

Best category bonuses

When to consider business cards with category bonuses: If you spent a lot in particular categories, credit cards with category bonuses may be a great way for you to earn rewards for that spending. For example, if you drive a lot for business, a card with gas rewards may be ideal. Below we list the business cards that offer the highest reward rates on dining, gas and office-supply spending

Dining & gas

Why we like it: The Sam's Club® Business Mastercard® offers a high 5% cash back on gas (on first $6,000 per year in purchases, then 1%), 3% cash back on dining and travel, and 1% cash back on other purchases. This rate is ideal for businesses that primarily spend on gas because you earn the highest rate on those purchases compared to other cards. Business owners who often take out clients for meals may want to consider this card because of its cashback rate on dining purchases.

What to watch out for: You need to be a member of Sam’s Club to open this card, and as a business owner you may not have a need for a Sam’s Club membership. However, membership starts as low as $45 a year, and considering there’s no annual fee for this credit card, that’s a small amount.

Costco Anywhere Visa® Business Card from Citi

The information related to Costco Anywhere Visa® Business Card from Citi has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

Costco Anywhere Visa® Business Card from Citi

Regular Purchase APR
17.49% Variable
Annual fee
$0
Rewards Rate
4% cash back on gas, 3% on restaurants & travel, 2% at Costco & Costco.com, 1% on all other purchases

Why we like it: The Costco Anywhere Visa® Business Card from Citi offers a tiered cashback program with 4% cash back on gas, 3% on restaurants & travel, 2% at Costco & Costco.com, 1% on all other purchases. This is a good rewards program for business owners with Costco memberships if you want to earn cash back in a wide range of categories.

What to watch out for: You need to be a Costco member to open this card, and membership starts at $60 per year. This is higher than Sam’s Club and definitely something to consider if you’re deciding between the two cards.

Gas & office supply stores

Why we like it: The Bank of America® Business Advantage Cash Rewards Mastercard® credit card doesn’t require membership with a warehouse club like other gas cards and has a $0 annual fee. Business owners can earn a decent cash back rate at both gas stations and office supply stores, making this card ideal if you often spend in these categories.

What to watch out for: The gas cashback rate is lower than other business cards with gas as a category bonus and won’t earn you as much rewards.

The information related to Bank of America® Business Advantage Cash Rewards Mastercard® credit card has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

Risks of using small business credit cards

While small business credit cards can provide a wide range of benefits for your company, they have drawbacks.

Here are some of the major risks:

Personal liability. As a business owner, you are solely responsible for all charges made on your account. That means if there are any unpaid balances on your account, whether from your spending or employee spending, you are liable.

Negative impact on you credit. If your account is in poor standing as a result of late payments, overdue balances, bankruptcy or other issues, the credit card issuer may report this information to the credit bureaus. As a result, your personal credit score may take a hit.

Not protected by the CARD Act. Business cards don’t receive the same consumer protections that personal credit cards receive with the CARD Act. The CARD Act requires credit card issuers to provide transparent terms as well as lower fees and interest rates for consumers. But, issuers of business cards don’t have to comply with those requirements. Therefore, a business card may have higher interest rates, more fees and confusing terms.

How to minimize the risks of business credit cards

Monitor employee spending. The ability to open employee cards is a great feature, but if you don’t stay on top of their charges, it can become risky. Some good practices include keeping records of all employees with card access, setting employee spending limits when available and monitoring your credit card statements. This way you can keep track of all spending made on your account and add limits when needed.

Avoid charging personal expenses. Use your business card the way it is intended to be used — exclusively for business purchases. Charging personal expenses makes managing your finances harder and complicates the use of your card.

Do not take out a cash advance. Cash advances are one of the most costly features of credit cards and are rarely a good choice because you’ll be hit with higher than normal interest rates and can rack up debt fast. As an alternative, check out small business loans.

Look at loans for long-term financing. Your business may need to borrow money for purchases like cars or other big-ticket items, and small business loans can be a great way to finance those purchases. Often with straightforward terms, loans can be a good alternative to charging purchases on your credit card. Compare small business loans here.

Do not try to bail out a failing business. If your business isn’t doing well, don’t take out a small business credit card with the hopes of bailing it out. Odds are you’ll only get into more debt and make the situation worse.

Best way to use credit cards for your business

Earn rewards. Almost all of the cards mentioned in this roundup provide rewards, allowing business owners to be benefit from typical business spending. You can use the rewards you earn in a variety of ways, like booking travel, applying cash back as statement credit to cover bills or redeeming them for gift cards for business expenses or employee incentives.

Manage cash flow. Business cards may provide expense-management tools so you can monitor spending and simplify everyday business transactions. You can use your card to automate business expenses like monthly phone bills or regular office-supply purchases.

Build business credit. Opening a small business credit card has the potential to build and improve your business credit. If you make on-time payments and use a relatively small amount of your available credit, your business’ credit can benefit greatly. Having a good business credit score can help you down the line if you plan on taking out a loan or other credit products.

Short-term borrowing. If your business plans on making purchases that can’t be paid immediately, some business credit cards offer 0% intro periods that are ideal for short-term borrowing and can be a better choice than a personal loan — when used responsibly. During the 0% intro period, you can carry a balance without incurring interest, and if you pay it off before the intro period ends, you can save on the interest that you would’ve incurred if you had taken out a loan.

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Alexandria White
Alexandria White |

Alexandria White is a writer at MagnifyMoney. You can email Alexandria at [email protected]