Ranking the Best -- and Worst -- Business Credit Card Issuers

While it’s often difficult to persuade people to take their business from one credit card company to another, small business success requires such opportunistic decision making, when warranted.  As is the case with the vendors and suppliers that small business owners deal with on a daily basis, some credit card companies meet the unique needs of a small business while others simply don’t cut it.  Unfortunately, because the new credit card law (CARD Act) does not apply to small business credit cards, transparency is lacking in this segment of the credit card industry, and it is often difficult to identify the best and worst issuers.  However, Card Hub recently released a study that basically amounts to a small business credit card scouting report.

The New Business Credit Card Landscape

The Small Business Credit Card Study ranks the 10 largest banks in the United States based on their business credit card policies as well as their transparency.  The best recognize that an extension of the CARD Act to so-called business credit cards is inevitable given that individuals are held liable for business credit card use and usage information is reported to individual users’ major credit reports.  The worst cling to the last vestiges of an outdated credit card system characterized by bait-and-switch tactics and a lack of transparency.

So which issuers fall into which categories?

The Best

The top is lonely when it comes to business credit card issuers, and Bank of America is without a doubt the best.  Among the CARD Act protections the bank extended to its business credit card offerings are rules prohibiting double-cycle billing and universal default as well as rules requiring favorable payment allocation and 45 days notice before substantial account changes can be made.  Perhaps most importantly, Bank of America also extended to its business credit cards the law against increased interest rates being applied to existing balances unless an account is at least 60 days delinquent.

Thus, Bank of America provides business owners with predictability, stability, and transparency in addition to the standard business credit card features that make it easy to track and manage employee spending as well as give cards with customizable limits to employees and earn rewards on their purchases.  With a Bank of America business credit card, owners can budget and allocate funds without worrying about the terms of their card agreement suddenly changing or their interest rate increasing for no other reason than it will help expedite a credit card executive’s bonus.  Considering how difficult it is to build a small business into a success, such a card could be pretty useful.

The Worst

On the other end of the spectrum are Wells Fargo, HSBC, and U.S. Bank.  To start, none of these issuers applied a single major CARD Act protection to its business credit cards.  To make matters worse, each of them refused to be transparent about its policies and practices in regards to business credit cards.  Now that’s about as far away from small business as you can get.  A small business owner needs a financial partner that will care about his needs, that will answer any and all questions about the terms of his credit card candidly.  It doesn’t seem likely you’ll get this from Wells Fargo, HSBC, or U.S. Bank.

Final Thoughts

Capital One, American Express, Chase, Citi, and Discover fall somewhere in the middle of the best and the worst.  Some—Capital One and AmEx—have made a pretty good effort to voluntarily apply CARD Act protections to business credit cards, but aren’t yet quite up to par with Bank of America.  Others—namely Citi—is only distinguished from the worst small business credit card issuers because it was at least transparent about it policies.  Ultimately though, when you can get the full suite of protections from Bank of America, why even consider anyone else?  Stick with the best, and your business will benefit.

Odysseas Papadimitriou is the founder of Card Hub, an online marketplace for business credit cards, including business credit cards for new business owners.