5 key questions to ask when you’re selecting a card for business spending

Posted: 7 January 2021 5:09 pm
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The challenges of 2020 have made it even more important for businesses to keep track of their money. Here's how to find a card that helps you do that – and more.

This guide is sponsored by the American Express Business Explorer card. Enjoy the benefits of an introductory interest rate of only 3.99% p.a. for the first 6 months. T&Cs apply. Learn more.

Over the past 12 months, some businesses have wrestled with a decrease or halt in trade due to coronavirus restrictions – and the bushfires before that. To help them make it through these difficult times, a number of businesses have received support through bushfire relief programs, JobKeeper, tax incentives and rent relief for businesses with physical premises (to name a few).

But these changes can have an impact on how you track your profits and losses, the time it takes to balance your books and your tax-reporting responsibilities.

This also makes it important to have an account (or accounts) that make it easier to deal with these financial tasks. So, whether you already have a business card or are getting one for the first time, these five key questions will help you find the right card for you.

1. What are your main business expenses?

If your work spending patterns have changed a lot in 2020, you're not alone. Data from the Australian Bureau of Statistics shows that 21% of small businesses and 38% of medium-sized businesses had a change in expenses in November 2020, with a trend towards increased spending.

So, while you may still have uncertainties about the future, try to take a mid- to long-term view with this question so that it can help you focus on the features that you need from a business card.

For example, if you're making payments to many different suppliers, look at features including itemised statements, GST breakdowns and compatibility with accounting software.

Another key question to ask at this point is: who is spending money for your business? Is it mainly you or do you have employees with work-related expenses?

If you do have employees, a business card that offers additional cards could simplify expense claims for both you and them. When you're growing your business and plan to hire, you could even look for a card that gives you the flexibility to add more additional cards.

For instance, the American Express Business Explorer Card offers up to 99 additional cards with no extra fee. It also gives you detailed statements that break down expenses for each card as well as for the overall account. The fact that there are no additional cardholder fees means you can add employees whenever you need to and keep all your business spending in one place.

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2. How much do you usually spend each month?

This question is often asked as part of your business card application, so it's good to have a clear idea before you get to that stage.

If your costs are relatively predictable, it will help you to request a credit limit that helps you best manage your cash flow. An important note here: spending typically increases as a business grows, so make sure you factor that in when you're looking at different cards.

If your business costs vary a lot – or have in the past 12 months – it's also worth looking at the month where you've spent the most money. Is that level of spending more or less likely in the future?

It's also worth noting that many business card providers have dedicated teams to help answer questions about your different options. So calling them and talking about your business spending can help you find a business card that fits with your goals.

3. When do you pay your bills?

Your answer to this question will help you choose a business card that fits your spending patterns – and has costs that are reasonable for you.

A big part of this comes down to the type of card you choose. Some business cards charge interest from the date of the transaction, which could quickly add up unless you pay as you go. Others offer interest-free days on purchases, usually when you pay the entire balance off by the due date on each statement.

There are also a few that are technically charge cards and don't have an interest rate. These cards also need to be paid in full at the end of each statement period, which means you wouldn't have the option of carrying a balance at all.

4. What accounting software do you use?

A lot of business cards offer downloadable data and statements that are compatible with different accounting programs, such as MYOB, Quicken, Xero and Microsoft Excel. In some cases, you can even set up a data feed for your card transactions so you can view them directly from your accounting program.

For example, the American Express Business Explorer offers a data feed through MYOB, while accounting software Xero gives you ways to set up feeds directly or through PayPal, Stripe and Yodlee.

This feature can help you (and your accountant) save time on both basic and technical bookkeeping tasks, so it's worth looking at what options your accounting programs offer, asking your accountant or checking with a business card provider.

5. What extras do you need?

As well as helping you keep track of spending, the right business card can give you more value through rewards, lounge passes, complimentary insurance and other extras.

While some of these features offer financial benefits, such as complimentary insurance, others have the potential to give you value in a few different ways depending on whether you use them for yourself, your staff and clients, or all of the above.

For example, if you have an Amex business card that earns Membership Rewards points, some of the ways you could use your points include the following:

  • Travel bookings (either directly or by transferring to a frequent flyer program)
  • Gifts for your staff
  • Credit towards your account balance

As another example, if you had lounge passes, you could use them for a bit of luxury on your own flights or give them to staff as a morale booster when they're travelling for work.

Given the uncertainty in the world right now, you can't predict everything for your business. But you can get more certainty for your money with the right business card – and these questions will help you find it.

Featured American Express Business Cards

Compare other business cards

Name Product Bonus points Rewards program Rewards points per $ spent Purchase rate Annual fee
American Express Business Explorer Credit Card
100,000
Membership Rewards Gateway
2
3.99% p.a. for 6 months, reverts to 19.99% p.a.
$149
ABN holders w/ $75,000 revenue. Get 100,000 bonus points when you spend $3,000 in the first 3 months. Plus, 2 airport lounge passes.
American Express Platinum Business Card
250,000
Membership Rewards Ascent Premium
2.25
N/A
$1,750
ABN holders w/ $75,000 revenue. Get 250,000 bonus Membership Rewards points when you spend $8,000 in the first 3 months.
American Express Business Card
N/A
Membership Rewards Ascent
1.5
N/A
$109
ABN holders w/ $75,000 revenue. Up to 1.5 points/ $1 spent and extended cashflow with up to 51 days interest-free on business purchases.
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