How many business credit cards should I have?

For small businesses poised to grow, the question often arises: How many business credit cards make sense? In this article, we'll share some considerations that may help you make an informed decision about how many credit cards is ideal for your business.

How many credit cards should a small business have?

The number of credit cards that is right for your business largely depends on your budget, your spending patterns and if your business can maximize the benefits of certain credit card rewards programs. There is no set number that's right for everyone. 

It also really depends on how many cards you can reasonably keep track of each month. You may not want to have so many that you're missing the due date of a payment, or spending more than you're able to pay back. It may not be wise to keep a card account open that has an annual fee if you're not ensuring the cash back or rewards points are giving you a return on that investment (ROI). 

That said, it's not uncommon for a small business to have more than one credit card at one time.

Are multiple credit cards worth it?

If used responsibly, there are several reasons it could be helpful to have more than one credit card: 

• Diversify your rewards potential. One card may offer desirable travel rewards — such as miles, while the other may offer cash back. Having one of each kind may help you maximize the rewards benefits in a collective sense.
• Maximize your rewards in specific categories. Related to the above strategy, you can choose to reserve one of your cards to a specific category of spend. For example, if your business is loyal to one airline, you can get a rewards credit card that allows you to earn additional miles and perks with that airline. All travel-related purchases would go on that credit card only. This may not only help with organization and expense management, but it may also help you accelerate your rewards within a category you are already spending a big portion of your budget on.
• Access to additional credit if needed. If you have more than one credit card, you give the business access to additional credit if the need arises.
• Potential to improve business credit score. If managed wisely, having more than one credit card may improve your business credit score by building additional credit history. Just note that this could go the other way as well. If mismanaged, e.g. you miss several payments, having multiple cards could hurt your business credit score.

What should a small business consider before getting another credit card?

There are a few key questions you might want to ask yourself before deciding to apply for another card.

If I add another card, can I make the payments on time?

The first question to consider is if you're in a position to make at least the minimum payment each billing cycle, on time. When payments are made late you may incur late fees and it could negatively affect your credit score. In addition, if the balance is not paid off in full each month, you'll begin to accrue interest charges.

Not to mention that keeping track of multiple due dates, minimum payments and credit limits for more than one card may be cumbersome. Make sure you're able to stay organized and pay your bills on time if you want to add another card.

Am I getting value after paying the annual fee?

Some premium credit cards may come with an annual fee of several hundred dollars. If you're using these cards strategically, you may find great value in using them, especially if your card features a compelling introductory bonus offer. However, you may not want to pay this fee each year if you're not using the benefits or reaping the rewards. You may want to keep track of your ROI on each card and decide if it's a good decision for your business.

Could my business benefit from a credit card rewards program?

If you take a look at your buying trends and see that you're spending a lot within a specific category (such as office supplies, air travel or dining), you may be able to earn extra for those categories by choosing a card with a rewards program that caters to that category.

If you find yourself loyal to one particular airline, hotel or retailer, you may be able to benefit from a credit card that partners with that business, accelerating your reward-earning potential. It can be particularly satisfying because these are items you would be purchasing anyway — and now you're able to accelerate your rewards by doing so.

Even if your spending tends to be more varied, you may be able to benefit from a rewards program that offers a percentage of cash back no matter what you buy.

What are some different types of business credit cards?

There are various kinds of business credit cards, all catering to the unique needs of businesses. It's good to understand how they differ though, so you leverage your spending and decide which card could add value as you pursue your business goals. Keep in mind that many of these cards often come with an annual fee.

Cash Back business credit cards: Gives businesses the opportunity to earn a percentage of their purchases back as cash (on eligible purchases).

Airline business credit cards: Businesses can earn rewards, often in the form of miles, for their regular spending plus additional miles for flying on the airline in which the card is co-branded. Miles may then be redeemed for business travel discounts or flights. These cards may also offer additional perks such as access to airport lounges and travel insurance.

Hotel business credit cards: Businesses can earn rewards, often in the form of points, for their regular spending plus additional miles for staying at the hotel in which the card is co-branded. Points can then be redeemed for complimentary or discounted stays at that hotel chain.

General rewards business credit cards: These cards are often branded by the card issuer, rather than a specific airline or hotel. You can earn rewards for various types of business-related spending and combine them all together. This could include spending on office supplies, advertising, business travel and more. The collective rewards earned can be redeemed for merchandise, travel, gift cards or cash back through the card issuer's rewards portal.

Secured business credit cards: These cards are designed for businesses with limited or poor credit to build (or rebuild) their credit history. They require a security deposit as collateral. The credit limit is the amount of that security deposit. Over time, consistent on-time payments may result in an improved business credit score, which in turn, may pave the way to be approved for an unsecured credit card.

Note that Chase does not currently offer this kind of credit card.

How many business credit cards can I apply for?

Though there is no limit to the number of business cards you can apply for, you'll want to take into account that every application initiates a hard inquiry on your credit report. This may lead to a temporary hit to your business credit score, especially if you apply for multiple cards within a short time span.

Consider the amount of credit you need, the terms (including APR and fees), the rewards program and if the infrastructure of your business is setup to manage multiple credit cards.

If you need employee credit cards, you can set those up through one main business credit card account. Usually, you can receive employee cards at no additional cost. Some cards even allow you to customize the spending limits on each individual employee card so that you can have greater control over spending and expense management.

In summary

The number of business cards a small business should have largely depends on the business' specific needs and business goals. While there is no set rule, there may be advantages to having multiple business credit card accounts. You can earn rewards, have access to additional credit if needed and build your business credit history, which can favorably impact your business credit score.

Most importantly, determine if your team is able to manage the due dates and pay the bills for multiple credit cards on time. It's a good idea to read all the terms and conditions for any additional credit card you are considering.