The Best Credit Card Vendors to Consider for Your Small Business in 2022
November 15, 2022 | Last Updated on: January 27, 2023
November 15, 2022 | Last Updated on: January 27, 2023
In this article, we cover:
Business credit cards play a role in managing small business expenses. Making everyday purchases, strengthening your cash flow, building a credit history, and taking advantage of rewards are just some benefits of opening and using a business credit card. With a robust marketplace of credit card vendors, small businesses should take their time to understand what the best credit card is for their situation. We also look at vendors and key things to know about merchant accounts and credit card processing.
Business credit cards can provide a lot of value for small business owners. Beyond the obvious of giving your business access to capital to operate, a business credit card can be a tool to build credit, provide cash flow flexibility, and more. Let’s dive into some key benefits of using a business credit card:
For more information on how to use a business credit card (and other credit and lending products) to improve cash flow, please visit our article titled Smart Ways to Increase Cash Flow with Small Business Financing.
With so many credit card vendors to choose from, it’s worth it to take your time to select the right card for your specific situation. Let’s review some popular credit card vendors and a popular card they issue for small businesses.
Business credit card providers offer many types of rewards cards to fit various business needs. For example cashback, reward points, no annual fee, travel, hotels, airlines, no foreign exchange fees, 0% intro APR, and more. Understanding which reward will benefit your business the most is key to acquiring the best credit card for your small business.
In addition to listing some of the best credit card vendors below, we also list a popular credit card they issue, its annual fee, and its introductory offer. Keep in mind that fees and offers are always changing, so review the vendor’s website for the latest information.
Traditional credit card vendors like Visa, Amex, and Mastercard, and traditional financial services institutions like banks can be popular choices for your small business credit card needs. Some vendors and card options include:
All of the credit card vendors listed above have multiple options for different types of business situations. Review the vendor websites for a full list of card offers and options.
Airlines and hotels can also be business credit card issuers in conjunction with traditional credit card vendors. These cards can be a great option for businesses that travel. For instance, certain small businesses might value airline upgrades as the central component of their rewards program. Some vendors in the space include:
In 2020, the Federal Reserve released statistics regarding credit card usage in the United States. The data from the report suggests that credit cards are ubiquitous among US consumers. Some key findings from the report are (as of 2020):
Whether you operate a gas station, an eCommerce website, a clothing retailer, or just about any other type of small business you can think of, accepting credit cards as a payment method is essential because the overwhelming majority of your customers have and use them. Accepting credit cards involves a merchant services vendor/merchant account, more commonly referred to as credit card processing companies.
There is nuance involved, terms to know, vendors to research, and fees to understand when it comes to finding the best credit card payment processing service for your business. For example, whether you are a high-volume processor or a low-volume processor, in-person vs online-only payments, and more. Let’s review:
Let’s take a look a closer look at some of the best credit card processing companies:
Helcim offers interchange plus pricing. Interchange fees are based on two factors: the type of card the customer uses and a per transaction fee from the credit card processor. On average, for in-person transactions, Helcim charges 1.86% + $.08 and for keyed/online transactions 2.40% + $.25. They also offer all-in-one merchant solutions which include POS terminals, a virtual terminal, invoicing, developer APIs, and more. On their website, they also advertise no monthly fees and no hidden charges. For more information, visit their website: https://www.helcim.com
Stax is an all-in-one merchant solution with a monthly pricing model that tailors its product to small businesses, large businesses, and by industry. Their key value proposition is a customized solution for your business supported by a customer support team to ensure success. For more information, visit their website: https://staxpayments.com
An all-in-one merchant solution that also offers business solutions and management tools such as payroll and email marketing. In-person transaction fees are 2.6% + 10 cents, online transaction fees are 2.9% + 30 cents, and manually entered transaction fees are 3.5% + 15 cents. Square lets you calculate your fees using their fee calculator: https://squareup.com/us/en/payments/fee-calculator
An all-in-one merchant solution that accepts a wide range of payments including international payments and ACH Direct Debit. Base pricing for a credit card transaction is 2.9% + $.30. Stripe offers customized pricing for Interchange pricing, high-volume transaction businesses, and more. For more information, visit their website: https://stripe.com/
As an add-on benefit, these service providers have integrations with Quickbooks which means you can avoid manual entry and automate the transfer of sales activity into QuickBooks.
The two main pricing models credit card processing companies use are interchange-plus pricing and flat-rate pricing. Understanding how each works will help you make the best decision for your specific situation:
Interchange-plus pricing: an adjustable-rate pricing model where processing fees depend on the type (i.e., Visa, Mastercard, Discover, etc) of credit card that your customer uses.
Flat-rate pricing: a flat-rate pricing model means there is one rate for each transaction your business processes, regardless of the type of credit card your customer uses.
Which is best for your business? That depends on the volume of your transactions, the average size of your transactions, and the percentage breakdown of total sales by the credit card brand (for example, Visa is 65% of total sales, Mastercard is 25% of total sales, etc). Many of the vendors we listed above have processing-fee calculators or the ability to schedule a demo to discuss FAQs and your specific situation.