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According to one study, 58% of startup business owners surveyed used credit cards in their first year.
Another study established a positive link between credit card usage and job creation within small businesses. This same study, conducted for the American Bankers Association by Keybridge Research, found a correlation between credit card use and the revenue growth of a startup.
In essence, each one percent increase in credit card use correlated with a .11 percent increase in revenue. "On average, an extra $1,000 of credit card use would be associated with about a $5,500 increase in firm revenue," the report stated.
So there's nothing to fear about using credit cards for your start up business. The question is, which one should you choose?
There are a fair amount of decent choices on the market today, including cards with no rewards for people with fair-to-good credit (or just establishing a credit history with a new business), up to the American Express, Discover Business card, and a relatively new player to the game, Chase Ink, which gets high points for its generous rewards, free employee cards, and friendly customer service.
Let's look at our top four picks for credit cards for start up businesses.
Chase Ink rises to the top of our list for best credit cards for start up businesses, thanks to no annual fee, a low interest rate of 14.99% or 20.99%, an introductory APR of 0 % for the first twelve months, and free cards for employees.
The rewards program is also generous, with 3% back (for cash back, gift cards or merchandise) in select categories and 1% on other purchases.
If you want even better rewards and more travel perks, consider the Chase Ink Plus, which has no cap on rewards and a 13.24% variable APR. This card carries a $60 annual fee, which is waived for the first year.
Gold Delta SkyMiles® Business Credit Card
American Express remains one of the top cards for business owners.
Most of the American Express offerings are charge cards -- not revolving lines of credit -- although some, like the Plum card, offer flexible trade terms.
If you travel a lot in your startup business, the most popular American Express business credit card is the Gold Delta SkyMiles business credit card. With airlines charging for checked luggage, now, you can save a lot of money when you can check your first bag for free every time you fly.
You also get a $99 companion air ticket with each Delta airline ticket you buy with your Gold Delta SkyMiles business credit card.
The annual fee of $95 is waived the first year. You'll also get the full complement of American Express travel benefits, such as roadside assistance and 24/7 emergency assistance.
Capital One Platinum Business
If your credit doesn't fall into the “Excellent” category, there are still some high quality business credit cards you can get -- even though the choices for rewards are pretty slim. The Capital One Platinum Business card is a good card for startup businesses looking to build their credit.
After the first year, the card has a $39 annual fee -- but by then, your credit may be good enough to upgrade to a card like the Capital One No Hassle Cash Card, which offers 1 % cash back rewards and no annual fee.