How many business credit cards should you possess?

The top business credit cards provide a range of benefits and appealing earning rates that can support various business types. Nonetheless, some entrepreneurs may find they require multiple cards to enjoy higher spending limits or to optimize their purchases according to different bonus categories.

Regardless, having several business cards can empower your business with the necessary purchasing capacity, leveraging each card's distinctive benefits to enhance savings and rewards.

In this article, we'll discuss the scenarios in which it makes sense to maintain multiple business credit cards and the advantages they can bring to your small business.

Is it advisable for a business to hold multiple credit cards?

When determining how many credit cards to hold, business owners can adopt a strategy similar to personal cardholders by utilizing multiple credit cards. This approach enhances purchasing power, boosts credit scores, and amplifies rewards.

A business should consider having several cards to expand its purchasing power through a higher total credit limit. Relying on just one credit card can restrict a business's access to necessary credit.

For instance, if a business owner has a limit of $15,000 on an Ink Business Preferred® Credit Card, they might face challenges when needing to spend $10,000 on business travel in a single month. In such cases, having more than one card would prevent their purchasing power from being confined to just $5,000, allowing for smoother business operations.

Advantages of having multiple business credit cards

Having multiple business credit cards comes with numerous advantages. Firstly, it allows your business to engage in various rewards programs, which can help alleviate expenses. Similar to personal cards, business cardholders can accumulate cash back, airline miles, or reward points.

For instance, the Ink Business Unlimited® Credit Card provides 1.5% cash back on every purchase. Moreover, businesses that frequently travel can earn 5 points for each dollar spent on flights and prepaid hotels booked through AmexTravel.com using The Business Platinum Card® from American Express. You can also receive valuable statement credits when shopping with select retailers like Dell, Adobe, and Indeed (enrollment is necessary).

These cards can assist businesses in covering some annual expenses, delivering real value to business owners.

Another advantage of holding multiple business credit cards is the enhancement of your total available credit, which helps maintain a lower credit utilization ratio—beneficial for long-term business credit building. Business credit scores function differently than personal credit scores, and a higher business credit score can lead to improved rates on business loans or credit lines from financial institutions.

Factors to consider before applying for several business credit cards

Before seeking out additional business credit cards, consider these important factors.

Annual fee

Depending on the business cards you choose, they may come with or without an annual fee. Holding multiple business cards can become expensive if you're incurring annual fees on several accounts. For instance, The Business Platinum Card® from American Express charges an annual fee of $695 (refer to rates and fees). Adding other cards can quickly escalate costs.

Maximizing benefits

Business credit cards come with various benefits and perks, including cash-back categories, statement credits, and travel advantages like lounge access and a TSA PreCheck/Global Entry statement credit. If your business won't leverage most of a card's perks, it might not justify the annual fee.

Timely payments

While most business credit cards offer flexible repayment options that allow you to carry a balance month-to-month, this requires making at least the minimum payments. As a business owner with multiple credit cards, it's crucial to evaluate whether you can consistently meet the minimum payment requirements for all your cards each billing cycle.

Failing to make minimum payments on time can result in late fees and negatively impact your credit report. Additionally, any balance you carry will continue to accrue interest, raising your business costs and potentially diminishing your rewards earnings.

How many business credit cards should you consider applying for?

Although there's no cap on the number of business cards you can apply for, keep in mind that each application leads to a hard inquiry on your credit report. This can negatively affect both your personal credit score and your business credit score.

Prior to applying for more cards, think about which ones align best with your spending patterns, what benefits would be advantageous for your business, the APR rates, and if your company is equipped to handle multiple credit cards.

Key takeaway

The number of business credit cards you should hold is based on your business's requirements and how you intend to utilize the various perks and benefits that these cards provide. While having a single card may seem straightforward, multiple cards can enhance your business's purchasing power and offer greater flexibility in rewards.

Discover more: Top business credit cards