How many business credit cards should you have?

The best business credit cards offer a variety of perks and attractive earning rates that can benefit many types of businesses. However, some business owners require more than one card. They may want access to higher spending limits or wish to spread their purchases across different cards based on the bonus spending categories.

In any case, having more than one business card can give your business the purchasing power it needs while using the unique perks of each card to maximize savings and rewards.

In this article, we’ll explore when it makes sense to hold more than one business credit card and the benefits multiple cards can offer your small business.

Should a business have multiple credit cards?

When it comes to deciding on the number of credit cards you should have, business owners can take the same approach as personal cardholders by using more than one credit card to make purchases. This helps to increase purchasing power, build credit and increase rewards.

The primary reason for a business to have more than one card is to increase its purchasing power with a higher overall credit limit. Having only one credit card can limit a business’ access to credit.

For example, a business owner with a limit of $15,000 on an Ink Business Preferred Credit Card may run into trouble if they need to spend $10,000 on business-related travel in one month. In this situation, it would benefit the business to have more than one card so their purchasing power isn’t restricted to the remaining $5,000 and their company can operate smoothly.

Related: Business credit cards: What they are and how they work

Benefits of multiple business credit cards

There are many benefits of carrying more than one business credit card. For starters, it enables your business to participate in multiple rewards programs, helping offset expenses. Similar to personal credit cards, business credit card holders can earn cash-back, airline miles or reward points.

For example, the Ink Business Unlimited Credit Card offers 1.5% cash back on all purchases, and businesses that spend on travel can earn 5 points per dollar on airfare and prepaid hotels booked on AmexTravel.com with The Business Platinum Card® from American Express. You can also gain valuable statement credits when you make purchases at select merchants, such as Dell, Adobe and Indeed (enrollment required).

These credits can help businesses cover some annual costs, bringing tangible value to business owners.

Another benefit to having multiple business credit cards is that it increases your overall available credit and helps your business maintain a lower credit utilization ratio, which is good for building business credit over the long term. Business credit scores work differently than personal credit scores, and a higher business credit score can result in access to better rates on business loans or business lines of credit from banks.

Related: Amex Business Platinum card review: Big bonus and luxury benefits

Things to consider before applying for multiple business credit cards

Before you apply for additional business credit cards, here are a few things to consider.

Annual fee

Depending on which business credit cards you have applied for, they may or may not have an annual fee. Having multiple business credit cards could become costly if you’re paying an annual fee on more than one card. For example, the aforementioned Business Platinum Card® from American Express has an annual fee of $695 (see rates and fees). If a business adds other credit cards to the mix, it can quickly increase expenses.

Benefit utilization

Business credit cards have their respective benefits and perks, whether it be bonus cash-back categories, statement credits or travel benefits such as lounge access and a TSA PreCheck/Global Entry statement credit. If your business won’t use the majority of a card’s benefits, it may not be worth paying the annual fee.

On-time payments

Most business credit cards have flexible repayment terms that allow you to carry over a balance from month to month, but that involves making minimum monthly payments. As a business owner, if you have two, three or more business credit cards, you need to decide if you’re in a position to make minimum payments on multiple cards each billing cycle.

If minimum payments are not made on time, you may incur late fees and a negative hit to your credit report. Remember that every card that you carry a balance on will continue to accrue interest, which not only increases your business expenses but can also eat into your rewards earnings.

Related: The best way to pay your credit card bills

How many business credit cards should you apply for?

While there is no limit on the number of business cards you can apply for, it’s important to note that every submitted application will result in a hard inquiry on your credit report. Not only can this lower your personal credit score, but it can also lower your business credit score.

Before you apply for additional cards, consider which ones best fit your spending habits, what benefits will help your business, the APR rates and whether your company has the capacity to manage multiple credit cards.

Related: What is a purchase APR on a credit card?

Bottom line

The number of business credit cards you should carry depends on the needs of your business and how you will use the various perks and benefits that business credit cards offer. While only having one card sounds simple, multiple cards can increase a business’ purchasing power and open up the possibility of more flexible rewards.

For rates and fees of the Business Platinum Amex, click here.