Amex’s Blue for Business vs. Business Gold Rewards: Which Card Is Best?

We tackle two of American Express' popular business credit cards head-to-head.

As a small business owner, chances are you take on a lot of expenses each month. After all, it’s tough to maintain and grow a business if you don’t. That means it’s important to have the right credit card so you can maximize the rewards on all that spending. American Express is one of the largest issuers of business cards, among them, the Blue for Business credit card and the Business Gold Rewards card.

But what’s the difference between the two? And how can you determine what’s a better fit for you?

We’ll break down the rewards cardholders can earn with each of card. We’ll also outline the different benefits you can receive as well as what the cards’ costs entail to help you decide.

Some quick notes before we dive in: Be sure to read the fine print before applying for a new credit card — and check your credit, too, so you’ll have an idea of whether you’ll qualify for certain plastic. Remember, you’ll need a good credit score to net the best credit cards on the market.

How The Cards Compare

Blue for Business from American Express

With the Blue for Business card, you’ll earn 10x Membership Reward points on the first $2,000 you spend at restaurants within the first six months. In addition, you will earn 2x points on up to $50,000 worth of qualifying purchases during the first year you’re a cardmember. Each subsequent year, purchases will earn just 1x points. At the end of each year, you will receive a 30% bonus on the rewards you have earned. When you sign up for the Blue for Business credit card, you can earn 10,000 points after making a single purchase during the first three months.

Business Gold Rewards from American Express

When you sign up for the Business Gold Rewards card, you’re eligible to receive 50,000 Membership Rewards points after spending $5,000 within the first three months. You will also receive 3x points on your choice of one of the following categories:

  • Airfare purchased directly from airlines
  • Advertising in select media
  • Gas stations
  • Shipping
  • Computer hardware, software, and cloud computing purchases made directly from select providers

You will also receive 2x points on the four categories that you didn’t choose to receive 3x points. This gives you the opportunity to earn the most points on your business’s largest expenses. The bonus category earnings are good on up to $100,000 each year. Any other purchases you make will earn 1x points.

How The Fees Stack Up

Not only is there quite a large difference in the amount of rewards you can earn with each card, there’s also a big difference in how much each card will cost. The Business Blue card comes with no annual fee. However, the Business Gold Rewards card will have an annual fee of $175, waived the first year. So even though you have a greater opportunity to earn rewards with the Business Gold Rewards card, it will cost you considerably more after the first year.

Another difference is that the Business Blue card is a credit card and the Business Gold Rewards card is a charge card. With the Blue for Business card, you will receive an introductory 0% annual percentage rate (APR) on purchases for the first 12 months. Once the introductory period is over, the APR will change to a variable 11.74% to 19.74%, depending on creditworthiness. Because the Business Gold Rewards card is a charge card there will be no interest charges, but your balance is due each month or there will be a late fee of either $38 or 2.99% of the balance due, whichever is greater. (Confused? You can find a full FAQ about credit cards vs. charge cards here.)

If you travel a lot outside the U.S., here’s something to consider as well: The Business Blue card has a foreign transaction fee of 2.7%. However, there are no foreign transaction fees with the Business Gold Rewards card.

Weighing the Benefits

Since both cards are from American Express, they have many of the same ancillary benefits included. You will receive purchase protection, which means if an item you purchase is accidentally damaged or stolen in the first 90 days, American Express will have you covered. You will also receive car rental loss and damage insurance. As long as you decline the rental car companies collision damage waiver, either of these cards will offer you the protection you need. Other benefits include baggage insurance, roadside assistance, travel accident insurance, and extended warranty protection on purchases. Plus, both cards will receive American Express OPEN benefits.

So Which Card Should I Get?

Blue for Business

The Blue for Business card is good for two different types of business owners. First, it’s ideal for someone that doesn’t want to deal with a bunch of bonus categories. Running a business is hard enough, and some people don’t want the added complexity and instead want something simple. The other person this card would be great for is someone that might be just starting out their business and their current expenses can’t justify an annual fee of $175. Having a card that comes with no annual fee, that still offer rewards might be a better fit.

Business Gold Rewards

The reason to pick the Business Rewards Gold card is simple. You are all about earning rewards and you don’t mind keeping track of the different bonus categories. Plus, your expenses can justify the high annual fee that you’ll have to pay after the first year.

Looking for more credit card breakdowns? Check our credit card review center.

At publishing time, the Business Gold Rewards Card from American Express is offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for this card. However, this relationship does not result in any preferential editorial treatment. This content is not provided by the card issuer(s). Any opinions expressed are those of Credit.com alone, and have not been reviewed, approved or otherwise endorsed by the issuer(s).

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

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4 Simple Ways to Keep Your Business From Wrecking Your Money

Here are four tips for managing small business expenses in 2017.

Managing a small business can be exciting but also comes with a lot of responsibility. As a small business owner, you may be faced with a lot of financial decisions, which can require much thought and planning. Here are some tips on how to effectively manage your finances.

1. Create a Budget

A budget will help you stay on track with your finances on your business journey. You might want to consider having a marketing budget and an office-expense budget to help. A budget can also count as the decision maker when planning new financial opportunities for your business.

If you see you are about to go over budget, don’t fret! Sit down and see where you can cut costs. You might want hold off on that $3,000 marketing strategy until the following year so you have enough funds to hold you over. Consider reworking your budget every month and seeing where you can save so you are never in the red.

2. Get Organized

Do you have a place where you keep invoices and other financial documents? If you want your business to be successful, it is important that you know where all documents are placed at all times. Any lost records or important financial documents may cause costly issues later on. Consider keeping everything, including information on business credit cards, in a computerized program that can be backed up and keep your documents safe.

3. Separate Personal & Business Expenses

You may get very confused and create a big mess if you don’t separate your business and personal expenses. It also can get very confusing deciding which transactions were for your business and which weren’t. This will eventually lead you to fix up the mess later on — which can get costly. Avoid this problem altogether by separating both expenses. If you think you are too deep in this already, consider speaking with a financial adviser or planner to help you get situated. (Not sure where your finances stand? You can view two of your credit scores for free, with updates every two weeks, on Credit.com.)

4. Prioritize Staffing

You may be wondering why staff is important to managing your finances. But this is actually one of the most important parts of your business that is often overlooked. There may come a point in your business when you should expand and add new members of staff, and there may be a time where you need to make cuts. You might have to reevaluate your budget and expenses to make this happen. You also want to make sure you don’t expand your staff too fast and go completely over budget. If you need to fill a position and don’t think you will have the proper funds for a yearly salary, you can consider hiring freelancers or outsourcing companies.

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Business Credit Card Fees That Are Tax Deductible

Here are some business tax write offs to keep on your radar.

Many of us use credit cards every day. We earn rewards points and make shopping and paying for goods easier through the convenience of not having to carry around cash.

Those same perks hold true for business cards as well. But if your business credit card has expenses and fees attached to it, do you know which of those are tax deductible? If you don’t, you’ll be happy to learn that it’s actually quite a few. It turns out that some of the best business credit cards are a lot better at helping you get a break on your taxes than personal cards. In fact, nearly every fee that you incur on your business card can be written off.

Annual Fees

Annual fees on a business card are tax deductible. This may be a great way to justify getting that card with the steep annual fee that also has amazing rewards. Yes, you can write it off, but keep in mind that the primary use of the card needs to be for business purposes and not for personal use.

Late Fees

Hopefully you’re not incurring late fees on your credit cards, but mistakes happen and you sometimes forget to make a payment. Those fees can be written off for your business taxes. Of course, it’s always best to call the company and explain you simply forgot and ask if they can waive the fee this time; saving $35 is almost always going to be better than claiming a $35 tax deduction.

Interest Charges

Again, in an ideal world you won’t be paying interest on any of your purchases. But there are times when you need equipment, and there just isn’t enough cash in the bank to pay for it right away. Those interest charges are all tax deductible.

Swipe Fees

As a business owner, you pay the credit card company every time someone uses their card to pay you. These are always business-related expenses and fully tax deductible.

Miscellaneous Fees

There are sometimes other fees associated with using a credit card. For instance, do you need cash? Your cash advance fees are deductible (although most financial professionals still don’t recommend this expensive way of accessing cash).

Maximizing your Tax Deductions as a Business Owner

The best part about deducting credit card fees as a business owner is there is really no stipulation on how big your business has to be. In fact, if you use a personal credit card and incur expenses, you can deduct them (as long as they are business related). That’s great news for even those who have a side business.

If you think you’ve been leaving credit card-related tax deductions on the table, it’s a good idea to go through your card statements before filing your taxes and add up all the fees. You could reduce your tax liability considerably if you’re using your credit card, whether business or personal, for business use.

And don’t forget that you can track how your credit card spending is impacting your credit by checking your two free credit scores, updated every 14 days, at Credit.com.

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Does Starbucks Have a Good Credit Score?

You may know you have credit scores, but did you know businesses do as well? Find out Starbucks credit score and that of some other popular coffee chains.

Coffee lovers tend to pledge strong loyalties to their favorite coffee shop, often stronger than loyalties to a professional sports. Sound familiar? Well, if this is you, could your allegiance to your favorite coffee shop be swayed by knowing how it treats its suppliers and contractors?

What if you knew their business credit scores, which are a reflection on how they handle their finances and debts? If so, take a look at the scores of major coffee shops Starbucks, Peet’s, Philz, and Dunkin’ Donuts to find out which has the best business credit score. (Note: Representatives for the companies did not immediately respond to requests for comment.)

What’s a Business Credit Score?

Similar to personal credit, business credit scores and reports offer one way to determine the credibility of a company by looking into how it has handled debts and obligations in the past.

As a business makes payments on business credit cards, loans, trade accounts with suppliers, etc., those payments may be reported to various warehouses that collect business data. Business credit reporting agencies use that data to create a score, which suppliers, vendors and even business partners can look up.

These scores can determine a business’s ability to qualify for funding or trade terms, large work contracts, rates on insurance premiums and more.

How did we get our hands on these coffee giants scores? Well, here’s a wild fact: Anyone can look up a business’s credit score, any time they want, without notifying or getting permission from the business. Here are the scores (and what they mean) for the four major coffee shops we mentioned. (Note: All scores are on a 0 to 100 range and are as of Nov. 17, 2016.)

Starbucks

Starbucks Corp.’s business credit score was a 50, putting it in a medium risk category. The national score average is 56.8.

starbucks_score

The most important factor influencing this score is payment status, which accounts for approximately 50% or more of the score. Payment status, however, works differently from that of personal credit — instead of a 30-day grace period, a payment that is even one day late can be reported on a business credit report as a slow or delinquent payment.

The report shows that of all the accounts listed for Starbucks, close to 30% of them have a delinquent status. Starbucks is also using 50% of its total available credit. Both the high number of delinquent accounts and the high debt usage can signal financial risk and reduce the score.

The report also shows that Starbucks Corp. has 361 derogatory marks, 277 of which are accounts that have been turned over to a collections agency. Derogatory marks are also likely bringing down their score. Of those collection accounts, 238 of them are listed as paid in full. More than 200 of them are from the Environmental Control Board. It’s important to know what these accounts are — they could even be duplicates or mistakes negatively affecting the score.

The other derogatory remarks include 60 state tax liens — tax debts that have not been paid in full — and 23 judgments, which indicate a financial obligation to pay any court-ordered damages following a lawsuit in which the business was the defendant. Both of these can hurt a business’s chances of qualifying for the best financing products and most flexible terms.

Peet’s Coffee & Tea

peets_scorePeet’s Coffee & Tea’s credit score was a 75, putting it in a low- to medium-risk category, well above the national score average.

Of Peet’s 56 accounts reporting, 16 of them show a delinquent status. There are seven tax liens and 12 derogatory UCC filings, as well as one account that has been turned over to a collection agency and is listed as paid in full (these can stay on business credit reports for more than six years, even if paid).

This score shows that Peet’s generally pays its creditors on time or just a few days late, which is usually an indication that a business is financially healthy and considered low risk.

Philz Coffee

philz_scoreComing in hot with a score between that of Peet’s and Starbucks is Philz Coffee, with a score of 65. This score puts Philz in the same low- to medium-risk category as Peet’s.

Philz has a smaller number of accounts than the above competitors, with 15 accounts reporting and only one showing a delinquent status. Other factors that might be bringing down Philz score include one state tax lien, UCC filings that are listed as derogatory and even the age of the credit file. Philz has 11 years in business, according to the business credit report, while Peet’s and Starbucks each have more than 30 years. A credit file showing fewer years in business can indicate less certainty about the future of the business.

The payment trends section of the report shows that Philz pays its bills approximately on time or only a few days late. This is a good indicator of financial health to creditors and is likely having a positive effect on the score.

Dunkin’ Donuts

dunkin_scoreDunkin’ Donuts’ score is a 24, which puts the business in a medium- to high-risk category.

Dunkin’ Donuts has one account that is beyond the terms of the agreement, according to the report. The report indicates that the low number of active accounts in the past 12 months could be a factor bringing down the score, as well as the multiple tax liens, derogatory UCC filings and a judgment.

Although Dunkin’ Donuts is carrying revolving debt (29% debt usage), it is likely low enough not to have a large negative impact on the score (however, it is always best for businesses pay balances in full, if possible). Dunkin’ Donuts also has a long established credit history, which predicts continued success and has a positive impact on its credit scores.

Another Scoring Factor

One interesting factor that may influence how each of these coffee producers is viewed in the eyes of lenders is their industry classification, or SIC and NAICS codes. Dunkin’ Donuts, for example, has an SIC code associated with “doughnuts,” which is a low-risk industry, while Peet’s, which is listed under “coffee, roasted,” is a medium-risk industry.

Some small business SIC codes that are higher risk can trigger a reduced credit limit recommendations or even an automatic decline from lenders. If you’re a small business owner checking your scores, you’ll want to know how the bureaus are classifying your business and what impact it might have on your credit.

Score Higher Than Your Favorite Cup of Joe

For most businesses, establishing business credit is the first step toward building strong credit scores. Separating personal and business expenses, as well as obtaining a business credit card or accounts with vendors and suppliers that report to commercial credit agencies are great first steps. As you start to make payments on your accounts, be sure to make them on time or even early.

It’s important to check your credit scores. (You can see two of your personal credit scores for free, updated every 14 days, on Credit.com.) Be sure to look for any errors or misinformation — make sure the accounts listed are associated with your business, and make sure you don’t have any tax liens, collections accounts, judgments, bankruptcies or UCC filings that shouldn’t be there. Inspect your company information, like your SIC code, to make sure you aren’t incorrectly identified as a higher-risk business.

Next time you sit down with your favorite cup of joe, consider setting your news app aside and take a close look at your credit reports and scores instead. Knowing where you stand and taking steps to improve it will energize your business and help keep you ahead of the pack.

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