Best Business Credit Card Canada (2020): Best Cards for Every Small Business Need

ByMaurice

In Canada, there is a huge range of business credit cards from a variety of providers. This means that there is probably a business credit card that is just right for your business. Here’s our guide to help you find it.

What are the Best Business Credit Cards in Canada?

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The best business cards in Canada are accepted at a wide range of locations, offer high-quality customer service and have been tailored to suit the needs (and wants) of businesses. Here is a list of the very best options according to your top priority.

Best Business Credit Card Overall

Scotiabank Value Visa card

Why we like it

It was a very close call between the Scotiabank Value Visa card, the Scotiabank No-Fee Value Visa card and the Tangerine Mastercard. They’re all good options for companies that want a straightforward way to pay for purchases and build their credit recorThe reason the Scotiabank Value Visa card came out top is that the modest annual fee ($29) seems a very reasonable price to pay for the low interest-rate.If you’re certain you can pay off your bill in full every month, then the Tangerine Mastercard might be a better option as it offers 2% cashback. The benefit of this can, however, soon be eaten away if you end up carrying a balance and paying 19.95% interest on it.

Best Business Credit Card for Travel

Scotiabank Gold American Express card

Annual fee

$120 (plus $29 per year for supplementary cards)

Interest rate

19.99% (purchases) 22.99% (cash advances)

Interest-free period on purchases

Unknown

Currency-conversion fees

None

Rewards

Scotia reward points redeemable against a variety of options. Access to benefits offered by Scotiabank and/or American Express, including discounted access to airport lounges. Special deals on insurance.

Why we like it

If you travel a lot, especially internationally, then you could easily recoup the annual fee on this card by savings on foreign-currency fees. If you can pay off your card in full each month, then the interest rate can be ignored. Even if you can’t, the range of benefits could justify paying it.

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    Best Business Credit Card for Hotel Rewards

    American Express Gold Rewards card

    Annual fee

    $150 (one additional card for free and $50 for further cards)

    Interest rate

    30%

    Interest-free period on purchases

    28-31 days

    Currency-conversion fees

     2.5%

    Rewards

    Points based rewards system plus special deals on travel-related insurance

    Why we like it

    Technically, the American Express Gold Rewards Card is a charge card rather than a credit card. This means that you are supposed to pay the balance in full every month. This means that the interest-free grace period depends on when in the month you make a transaction. The interest rate is only chargeable if you carry a balance, which you are not supposed to do.

    Best Business Credit Card for Entertaining

    American Express Cobalt

    Annual fee

    $120 (billed as $10 per month)

    Interest rate

    19.99% (purchases) 21.99% (cash advances)

    Interest-free period on purchases

     21-25 days

    Currency-conversion fees

     2.5%

    Rewards

    Earn points to redeem on a wide range of options plus get access to special insurance deals, mostly related to travel.

    Why we like it

    This option from American Express is a credit card, not a charge card, so you can carry a balance if necessary. The rewards system gives multiples of points for spending at certain merchants. Partners include food and beverage merchants, hence this business credit card could be a good option if you do a lot of corporate entertaining.

    Best Business Credit Card for Cashback

    Tangerine Mastercard

    Annual fee

    $0

    Interest rate

    19.95%

    Interest-free period on purchases

    Unknown

    Currency-conversion fees

    2.5%

    Rewards

    Up to 2% cashback

    Why we like it

    The Tangerine Mastercard is a great all-round business credit card. The 2% cashback is a nice bonus. That said, as previously mentioned, the benefit of this can soon evaporate if you carry a balance. If you’re not sure you can pay off your balance in full each month (or at least most months), you might be better with either the Scotiabank Value Visa card or the Scotiabank No Fee Value Visa card.

    Best Business Credit Card Without an Annual Fee

    Scotiabank No-Fee Value Visa card

    Annual fee

    $0

    Interest rate

    16.99%

    Interest-free period on purchases

    Unknown

    Currency-conversion fees

    2.5%

    Rewards

    25% off base rates on car rentals at participating AVIS and Budget locations in Canada and the U.S.

     

    The Scotiabank No-Fee Value Visa card is a good option for companies that want a business credit card mainly for small purchases. If you’re not spending much on your business credit card, then you’re unlikely to get a lot of benefit from reward points and/or cashback. If you’re able to pay off your bill in full each month, then the stated interest rate is largely academic.  

    Why we like it

    That said, while the interest rate on the Scotiabank No-Fee Value Visa card is noticeably higher than the interest rate on the regular Scotiabank Value Visa card, it’s still pretty reasonable compared to other business credit cards available in Canada.

    Best Business Credit Card for Everyday Bill Payments

    Scotiabank Value Visa card

    Annual fee

    $29

    Interest rate

    12.99% 

    Interest-free period on purchases

    Unknown

    Currency-conversion fees

    2.5%

    Rewards

    25% off base rates on car rentals at participating AVIS and Budget locations in Canada and the U.S.

    Why we like it

    The low annual fee and low interest-rate make the Scotiabank Value Visa card a great choice for companies that just want an easy way to pay their bills.

    Best Business Credit Card Without Foreign Exchange Fees

    Scotiabank Passport Visa Infinite

    Annual fee

    $139 (one additional card for free and $50 for further cards)

    Interest rate

    19.99% (purchases) 22.99% (cash advances)

    Interest-free period on purchases

    Unknown

    Currency-conversion fees

    None

    Rewards

    A points-based rewards system, special deals with various travel-related merchants and special offers on travel-related insurance.

    Why we like it

    This looks and feels very similar to the Scotiabank Gold American Express card. From the perspective of travel, the American Express option has the edge as you can access rewards from both Scotiabank and American Express itself. If, however, you want to make international purchases from Canada (e.g. online), then the Visa option has the edge. This is because Visa and Mastercard have wider acceptance than American Express.

    FAQs: Best Business Credit Cards in Canada

    Here is a guide to what you need to know about business credit cards in Canada, what they are, what they do and how they work.


    From an end-user perspective, a business credit card works exactly the same way as a personal credit card. It will also be accepted in exactly the same places as take regular credit cards. For practical purposes, that’s anywhere which accepts Visa, Mastercard or American Express.

    From a business management perspective, business credit cards work very similarly to personal credit cards. The big difference is that they are owned and managed by the business rather than by the employee.

    This means that, in principle, it’s the business’ credit record that matters, not an individual employee’s credit record or the management team’s credit record. In practice, there is a bit of nuance here. For example, if a business is new, it will not have a credit history. It may, however, still be able to get a business credit card by leveraging its owner’s credit score.

    Business credit cards offer a variety of benefits. Which ones matter the most to you will probably depend on your business’ stage of development and its way of operating.

    Build/maintain a credit score

    For newly-established businesses, the single, biggest advantage of having a business credit card may well be the opportunity to build a credit score for the business itself. This is effectively a prerequisite for genuinely separating the company’s finances from the owner’s finances. 

    In turn, separating the company’s finances from the (original) owner’s finances is a prerequisite for allowing the original owner to move on without either having to wind up the company or find someone else who can support it financially.

    Save employee time without compromising on management oversight

    Having employees check with managers before each and every purchase is, at best, time-consuming. It can be frustrating. In some cases, it can be impossible. Do you really want an employee to call into the office before they buy a train ticket? What if they’re on the other side of the world?

    At the same time, you do need to keep a reasonable level of oversight on what your employees are buying. This is partly for protection against staff fraud (which is a sad reality). It’s also for protection against mistakes and inefficiencies.  

    For example, if you know what people are buying, then you can keep an inventory of your assets. This may well be required (or at least highly desirable) for your insurance. Even if it isn’t, it provides a record that people can check before they make further purchases. This can help to stop unnecessary duplication of expenditure.

    Make life easier for your finance team

    First of all, ensuring that business expenses and personal expenses are kept absolutely distinct is a prerequisite for filing taxes accurately. If employees are using their own credit cards for business purchases, then both they and your finance team will need to check and double-check their submissions very thoroughly to ensure that no human error creeps in.

    Secondly, having full spending reports delivered automatically to a known schedule helps your finance team to plan and prioritize their work. It is much more efficient than having to collect and collate individual spending reports from each employee.  

    Having everything in one place can also make it easier for your finance team to cross-reference statements with receipts. Again, this is important both to prevent fraud and to catch mistakes.  

    In this context, remember that fraud on credit cards will not necessarily be the doing of your employees. Credit cards are a very secure method of payment, but they are not 100% safe. Likewise, mistakes can be made by merchants as well as by your employees.

    As a bonus, you can set up recurring payments on a business credit card, so that you only have to go through the payment process once. This saves time compared to paying every month and also eliminates the possibility of somebody forgetting.

    Manage payments for smoother cash-flow

    There needs to be a note of caution here. If you spread payments over an extended period, then you will pay interest on them. You may be willing to accept this. If you do, remember to account for it. Also, be aware that maxing out your business credit card (or coming close to doing so) can hinder your progress towards a high credit score.

    That said, if your business credit card offers an interest-free payment on purchases, then it can make sense to use it to your advantage. For example, you could spread the cost and/or hold off paying the full amount until an invoice has cleared.

    Earn rewards for your business

    Two notes of caution are needed here. Firstly, you should only choose a rewards-focussed business credit card if it offers the best overall deal for your business. Secondly, any spending should be on the basis of business needs (or at least business wants) rather than on the desire to collect rewards points. In other words, resist the temptation to make unnecessary purchases just to qualify for rewards (unless the rewards are genuinely big enough to justify it).

    Each lender will have its own qualifying criteria for its business credit cards. As a rule of thumb, however, you will be expected to have a decent credit score and to provide a range of documentation.

    Requested documents may include:

    • Articles of Incorporation (or Partnership Agreement)
    • Master Business License
    • Notice of Assessment
    • Business Financial Statements

    Merchant acceptance – Visa/Mastercard versus American Express

    It’s difficult to get hard figures on this, but it is very clear that a lot more merchants accept Visa and Mastercard than accept American Express. This difference could be as much as 40%. It’s probably not a coincidence that Visa and Mastercard charge merchant fees in the region of 1.43% to 2.6% per transaction whereas American Express charges fees of between 2.5% and 3.5% per transaction.

    Whether or not this is an issue for you is likely to depend greatly on how you plan to use your credit card. Thanks to the internet, it’s often easy to check what payment methods a merchant accepts before you decide whether or not to use them. Even if they don’t display payment-card signage on their website, there’s probably going to be an email address you can use to send an inquiry.

    That said, if you want to play it safe and make sure your staff always have the very widest range of merchant-acceptance points no matter where they are, then Visa or Mastercard is the way to go.

    If a business has no credit history, then it may still be able to get a business credit card based on the business owner’s financial standing. In this case, further, documentation would be required and the prospective lender would provide details of what they needed.

    If neither the business nor the business owner had a credit history, then you may be able to compensate for this by offering some form of collateral. If neither the business nor its owner has assets, you could try offering to keep money on deposit with the lender. Alternatively, you could try offering a guarantor.


    Essentially the same comments apply as for businesses and people with no credit history, but even more so.

    If the business itself has a bad credit history, but the owner is in good financial standing, then the owner may be able to leverage that to the benefit of the business.

    If both the business and the owner have a bad credit history then lenders are going to need a lot of reassurance before providing any sort of credit. Realistically, this is likely to mean collateral and/or a guarantor.

    Applying for a business credit card is relatively straightforward compared to other forms of business administration, but there are still some common mistakes you need to avoid.

    Getting distracted by non-essentials

    There is a reason why “rewards” comes in the last place on every list of card features. Rewards can be useful and should certainly be considered as part of the overall package. For the most part, however, they are likely to be more of a tie-breaker than a deal-maker. In blunt terms, even the best rewards can lose their appeal if you find your company is paying a lot more in interest than it would have done if you’d chosen another business credit card.

    Also, remember to look carefully at the terms of any special offers, particularly anything related to insurance. You may find that it isn’t suitable for your needs and hence needs to be ignored when evaluating the offer. 

    Being unrealistic about your usage

    The key point to note is that you need to think about how you’re going to use your business credit card rather than how you spend your money in general.  

    For example, if you have a business line of credit for your everyday needs, you might not get a lot of value out of signing up for a business credit card geared to everyday spending. Instead, you might want to look at a business credit card which will support your staff when they are out and about on business travel and/or entertaining people.

    That said, remember that foreign currency fees are levied on all purchases made in foreign currencies, not just ones you make when you are actually travelling. In other words, if you’re planning to use your business credit card to make a lot of online purchases from international merchants, you may benefit from using a product geared towards international travellers so as to avoid foreign-currency fees.

    Signing up for the wrong number of business credit cards

    Likewise, you need to be realistic about who is actually going to be using the business credit cards. It’s reasonable to start by erring on the side of caution and limiting the number of people who have access to them. This not only saves you fees for supplementary cards but also gives you a chance to pilot-test your systems. Once you’ve established your way of working, however, you should be prepared to expand the use of business credit cards, particularly towards lower-level employees.

    This is because one of the major benefits of business credit cards is that they allow employees to make approved purchases without having to go through a (lengthy) approvals process. If the use of business credit cards is restricted too much, the need to find someone who has one will become a bottleneck in your company’s operations

    Sources:

    Business Credit Cards

    Do I need a business credit card? A guide for small business owners

    TDB01-369-BusinessChecklist_PDF_Download_(v06).pdfFees at a GlanceAmerican Express Gold Rewards Card – Secure Application

    How Much Does It Cost You to Accept American Express Cards?

    The 4 Major Networks: Visa vs. Mastercard vs. Discover vs. Amex

    About the author

    Maurice

    Maurice (Moe) Muise learned the ins-and-outs of government while an employee of the Government of Canada in Ottawa for 10 years. His current focus is helping small businesses in Ontario to identify and maximize government grants to grow their business. Click here to learn more about Moe’s background and how he can help your business.

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