Top 5 Beginner Business Credit Cards for Canadian Entrepreneurs
By Otis De Marie | 31 Jul 2023 |
Are you a Canadian entrepreneur seeking the best business credit card to propel your ventures forward? Fortunately, your quest for the perfect credit card — one that is cost-effective and easy to get approved for — ends here. Introducing the top five beginner business credit cards with no or minimal annual fees, exclusively crafted for Canadian entrepreneurs like yourself. These powerful financial tools are designed to uplift your business endeavours and provide unwavering support for your day-to-day operations. Get ready to explore a realm of possibilities as we unveil the most suitable credit cards for ambitious businesspeople seeking growth and success.
How does a business credit card work?
A business credit card operates much like its personal counterpart, although it caters exclusively to a distinct clientele. Typically, business credit cards offer higher credit limits compared to personal credit cards. Generally, the purpose of business credit cards is to facilitate the acquisition of costly items such as equipment and resources, as well as enabling high-volume purchasing. Moreover, these cards prove invaluable for effectively segregating personal and business expenses, streamlining financial management for business owners in Canada.
What are the benefits of a business credit card?
The benefits of having a business credit card are numerous. It establishes a clear distinction between personal and business spending, ensuring easy tracking and avoiding legal issues during tax season. It also provides interest-free grace periods, helping businesses manage cash flow and pay off balances without incurring interest charges. Furthermore, it serves as an easy-to-get credit facility, offering credit to small businesses with limited credit histories. Moreover, business credit cards offer rewards points or cashback on purchases, helping businesses save money. They also streamline expense tracking, enable faster business credit score building, track employee spending, enhance business trips, provide additional controls through virtual cards, and offer complimentary business insurance coverage.
How do I qualify for a business credit card?
To successfully apply for a business credit card, aspiring entrepreneurs must gather a range of crucial information. These prerequisites typically encompass vital elements such as the legal business name, physical mailing address, and business phone number. Although some of the cards presented below don’t require any personal credit check, most business credit cards require you to have a good personal credit score, and there are many ways to get your credit score for free in Canada. With that being said, let’s take a look at the top 5 business credit cards for Canadian entrepreneurs.
BMO CashBack Business Mastercard: Best beginner business credit card with no annual fee
Introducing the BMO CashBack Business Mastercard, another offering from BMO that provides enticing advantages for Canadian businesses. Despite its apparent simplicity, this card comes with notable perks and an attractive feature—it’s free! Similar to its counterparts, the card maintains competitive interest rates of 19.99% on purchases and 22.99% on cash advances.
While Air Miles may not be part of the rewards program, the BMO CashBack Business Mastercard compensates with appealing discounts and no income requirements. Presently, a special welcome offer grants users a generous 10% cash back for three months on gas and office supply purchases, as well as payments for cell phone and internet bills.
When it comes to regular cash back rates, this card offers 1.75% on pay-at-the-pump and in-store purchases at Shell, 1.5% on qualifying gas and office supply purchases, and recurring payments for cell phone and internet bills, and 0.75% on all other card purchases.
Beyond cash back rewards, the BMO CashBack Business Mastercard provides additional benefits, such as exclusive discounts at select merchants and an extended warranty on purchases. These features make it an ideal choice for businesses seeking the advantages of a business credit card without the burden of a hefty annual fee.
The BMO CashBack Business Mastercard presents an attractive proposition for Canadian businesses, offering cash back rewards, a welcome offer, competitive interest rates, and various other benefits. It proves to be a valuable tool for businesses looking to maximise savings and enhance their purchasing power.
Caary Business Mastercard: Best beginner business credit card for tracking expenses
Rewards & Perks:
* No personal guarantees or credit checks.
* No annual fees, no FX fees and 1.5% cash back on all spend.
* Virtual cards for employees.
* Self-serve administrator portal.
The Caary Business Mastercard is specifically designed to cater to the needs of small to medium-sized businesses operating in Canada. This credit card offers a range of unique benefits that can greatly simplify financial management for business owners. One notable advantage is that there are no personal liability or credit checks required to obtain the card, making it accessible to a wider range of businesses.
Another appealing feature of the Caary Business Mastercard is the absence of annual fees or foreign exchange fees. This eliminates unnecessary costs and ensures that businesses can allocate their funds more efficiently. The card also seamlessly integrates with popular accounting software such as QuickBooks and Xero, enabling easy synchronisation of financial data and simplifying bookkeeping tasks.
To further streamline expense management, the Caary Business Mastercard includes receipt capture functionality, allowing users to conveniently capture and store receipts using their phone or email. The card also enables the issuance of virtual credit cards to team members with flexible spend limit controls, promoting better control over expenditures.
In addition, businesses can create dedicated supplier cards with custom spend limits, enhancing expense management capabilities. The card offers an unlimited 1% cash back on purchases, allowing businesses to save money and earn rewards.
With the Caary Business Mastercard, businesses have access to a user-friendly mobile app and a management dashboard that enables instant locking, cancelling, reordering, and customization of cards. This empowers business owners with effortless control over spending and enhanced security measures.
To qualify for the Caary Business Mastercard, businesses must be registered as a corporation in Canada (excluding Quebec), maintain an average account balance of $35,000 or more in a business bank account, and report an annual spend of $25,000 or more on a credit card. These eligibility criteria ensure that the card is tailored to the needs of businesses with established financial activity.
The Caary Business Mastercard provides a comprehensive solution for financial management, offering simplified and controlled spending, seamless bookkeeping, and rewarding cash back. It is an optimal choice for small to medium-sized businesses in Canada seeking efficient and cost-effective financial tools.
American Express Business Edge Card: Best beginner business credit card for rewards points
That's a total of 57,000 Membership Rewards® points for the first year. Terms and conditions apply.
Get p to 57,000 Membership Rewards® points for new cardmembers
The American Express Business Edge Card is an excellent choice for beginner entrepreneurs in Canada, offering a range of benefits and features tailored to their needs. With a primary card cost of $99 per year and free additional cards, it provides affordability and flexibility, allowing entrepreneurs to manage their business expenses effectively.
One of the standout features of the American Express Business Edge™ Card is the opportunity to earn up to 67,000 bonus Membership Rewards points in the first year of membership. By charging $5,000 in purchases within the first three months, entrepreneurs can earn 45,000 points. Additionally, they can earn 1,000 Membership Rewards points for each monthly billing period in which they charge $3,000 in purchases, adding up to 12,000 points. Furthermore, during the first six months, cardholders can earn 10 times the points on eligible essentials such as office supplies, tech gear, transportation and fuel, meals, and beverages. This generous rewards program helps entrepreneurs maximise their earnings and offset business expenses.
The American Express Business Edge™ Card offers several business benefits, including expense management tools and resources, as well as business and car rental insurance benefits. The flexibility to pay balances in full or over time provides entrepreneurs with cash flow management options. The ability to leverage supplementary cards allows for better control of employee expenses and maximises points accumulation.
Dedicated customer service is available for cardholders, providing assistance with card benefits and online account management. Specially trained Small Business service specialists are just a phone call away, ensuring entrepreneurs receive the support they need.
Additionally, the American Express Business Edge™ Card provides valuable protection for business owners. Coverage for unauthorised charges due to employee card misuse can reach up to $100,000 per Basic Cardmember. Rental car insurance coverage is available for theft, loss, and damage of rental cars, while eligible items charged to the card are insured against accidental physical damage or theft for up to $1,000 per occurrence.
To be eligible for the American Express Business Edge™ Card, applicants must be Canadian residents with a Canadian credit file and meet the age of majority requirements in their province or territory.
The American Express Business Edge™ Card is an ideal choice for beginner entrepreneurs in Canada. Its rewards program, business benefits, payment flexibility, dedicated customer service, and comprehensive insurance coverage make it a valuable tool for managing expenses, maximizing rewards, and providing peace of mind for business owners.
BMO AIR MILES No-Fee Business Mastercard: Best beginner business credit card for Air Miles
The BMO® AIR MILES No-Fee Business Mastercard® is an exceptional choice for Canadian entrepreneurs seeking to accumulate air miles. This credit card offers numerous advantages that make it an ideal option for business owners. Firstly, the card presents a special offer of 1,000 AIR MILES Bonus Miles, which translates to over $100 worth of purchases with AIR MILES Cash, providing an instant boost to your rewards balance.
One of the most appealing aspects of this card is its lack of an annual fee, enabling entrepreneurs to enjoy the benefits without any additional costs. Furthermore, the interest rate of 19.99% on purchases and 22.99% on cash advances is competitive and reasonable within the credit card industry.
The earning potential with the BMO® AIR MILES® No-Fee Business® Mastercard® is impressive. For every $20 spent, cardholders receive 1 Mile. Additionally, when making purchases at Shell®, entrepreneurs can earn 1.25x the Miles for every $20 spent, enhancing the rewards accumulation rate even further.
The card’s flexibility extends beyond the primary cardholder. Business owners can request up to 22 additional cards for their employees, allowing them to contribute to the reward earnings and accelerate point accumulation. Alongside these benefits, the BMO® AIR MILES® No-Fee Business® Mastercard® provides Purchase Protection and Extended Warranty Insurance, offering peace of mind on most purchases.
With no income requirements, Canadian entrepreneurs of various financial backgrounds can access this valuable rewards card. The BMO® AIR MILES® No-Fee Business® Mastercard® truly caters to the needs of business owners, providing a convenient and lucrative way to collect air miles while keeping costs low.
Loop Corporate Card: Best beginner business credit card for eCommerce
The Loop Corporate Card is an exceptional financial tool that holds immense benefits for Canadian eCommerce startups. One of its key advantages is the ability to pay for goods and services in different currencies without incurring fees. Unlike other cards that advertise “low FX fees,” Loop automatically processes payments in the original currency, eliminating the need for conversion altogether. This feature alone saves businesses significant amounts of money and streamlines their international transactions.
Canadian eCommerce startups can conveniently make purchases without the hassle of currency conversions. Whether the purchase is in USD or any other currency, Loop allows businesses to pay in the original currency, simplifying the process and avoiding unnecessary fees.
Furthermore, Loop enables entrepreneurs to repay their balances using their Canadian-based bank accounts in the original currency. This flexibility empowers startups to manage their finances effectively and avoid the complexities of currency conversions when settling their dues.
The Loop Corporate Card also facilitates seamless transactions with popular marketplaces like Amazon, Shopify, PayPal, Etsy, and Stripe. Startups can receive payouts in USD directly to their Loop account and pay their US suppliers instantly and free of charge. Additionally, Loop provides local account details, ensuring businesses receive funds in the currency they get paid in, thus minimising the need for FX conversions and maximising revenue.
In addition to its payment capabilities, Loop offers funding options to fuel business growth without the need to sacrifice equity or commit to sales-based repayments. With competitive APRs starting as low as 8%, Loop provides Canadian eCommerce startups with the means to fulfil purchase orders, expand advertising efforts, enter new markets, acquire inventory, and scale their teams.
Moreover, Loop serves as a powerful global payment platform, supporting transactions in 37+ currencies worldwide. Its automated selection of the fastest and most secure transfer methods, such as EFT, Wire, and ACH, ensures efficient and reliable payment processing.
Loop also rewards its users by offering one point per purchase on everything, including ads and software. While the rewards system is currently being developed, startups can already start earning points for their transactions, providing an additional incentive to leverage the Loop Corporate Card for their eCommerce operations.
The card comes with a 24% interest rate on all purchases and cash advances, and has no annual fee. To be eligible for this card, you only need to be a Canadian resident. Loop will not look at your credit score, and they do not require any particular level of income.
The Loop Corporate Card presents an excellent solution for Canadian eCommerce startups. Its ability to handle multi-currency payments seamlessly, facilitate payouts from popular marketplaces, offer flexible repayment options, and provide access to funding opportunities makes it an invaluable tool for entrepreneurs looking to grow their businesses and optimise their financial operations.
Beginner Business Credit Cards: The Bottom Line
Canadian entrepreneurs now have access to a diverse range of business credit cards tailored to their unique needs. Whether you’re a small business owner, seeking Air Miles rewards, looking for a card with no annual fee, in need of flexible points, or running an eCommerce startup, there is a suitable credit card for you. These top five beginner business credit cards provide essential features such as higher credit limits, expense management tools, rewards programs, and exclusive benefits. By comparing business credit cards and choosing the right one for you, you can streamline your financial management, maximise savings, earn rewards, and propel your business towards growth and success.
FAQs About Beginner Business Credit Cards
Based on information from the Canada Revenue Agency (CRA), credit card rewards are generally not counted as taxable income for businesses when they are earned through business-related purchases. However, if the rewards are converted into cash or used for personal expenses, there is a possibility that they may be subject to taxes. To get a clear understanding of how this applies to your situation, it is advisable to seek guidance from a tax professional.
Yes, but the available options may be somewhat restricted. Certain business credit cards, such as the Caary Business Mastercard, do not necessitate a credit check or personal liability. Another alternative is a prepaid business card, which does not require a credit check since you are only able to spend the funds you load onto the card. This means you are not borrowing money for purchases that will need to be repaid.
It depends on the type of business and the card you choose. With a sole proprietorship and partnership, you and your partners are responsible for the debt that your business incurs, which includes credit card debts. For that reason, most business credit cards do require a personal guarantee if the business is a sole proprietorship or a partnership. Generally, it is not easy to find a business credit card in Canada that does not require a personal guarantee, even if the company in question is a corporation.
Yes, you can use a business credit card for personal expenses. However, it is important to note that using your business credit card for personal use is generally discouraged as it can make it hard to differentiate between personal and business expenses, which is considered unfavorable in business practices.
When it comes to business credit cards, not only are the annual fees eligible for deduction, but you can also deduct the interest paid on borrowed money that is used to generate income. This includes the interest accrued on the balance of your business credit card, as long as it is being utilised for income-earning purposes.
It is possible to use a personal credit card for business expenses, but it may not always be the most advisable approach. Combining personal and business expenses can make it challenging to accurately track and calculate your business expenses for accounting and tax purposes. Moreover, maintaining a solid credit history can be highly advantageous for your business. Demonstrating responsible credit management and a positive payment history can increase your chances of securing business loans from banks and other financial institutions.
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