The Practical Question: When Should You Get a Second (or Third) Card

Now here's something you probably have not heard: you don't have to be monogamous with your business credit cards. I know, you're probably thinking, "How could that ever work?" You're already dealing with invoices and inventory and the printer in the corner that you have temporarily "fixed" with duct tape for 3 months now. The last thing you want is to keep track of yet another card. But here's where I think you will change your mind. After you have established yourself with only one card, and you are managing it well, you can add a strategically placed second card to multiply the benefits without multiplying your headaches. It's about being intentional!

Let me paint a scenario for you. You currently are using a flat rate cash back card you love—it's your go-to—your everyday card. You use it for almost everything you spend for work, and at the end of the year you have an end of year bonus amount. You decide without any thought to review your end-of-the-year statement, and you've accumulated a decent chunk of change—but did you see even a decent amount of your expenses? So, you see another line item, and that is that you spend a little over $2000 a month on Facebook and Google ads for your e-commerce business (that's $24000 a year). If you are getting 1.5% back, you have $360 dollars coming to you this year, which is decent. Now imagine I told you there is a card out there that you could use for those same digital ads with no cap and it gave you back 3% per dollar spent versus 1.5%. Guys, here's where you start to see the benefits. So now that you are spending the same amount of $24,000 over the next year, your new cashback will at least double your $360 to $720. You did not spend a dime more, you did not change your business model or how much you would spend, but you simply pulled out a different card when you paid your ad invoices, and you were able to multiply your cashback—without doing much besides paying a different card. You are simply being more strategic about which tool to utilize for which purpose.

The same idea holds true when we think about travel. Perhaps your primary card is perfect for daily use, but you fly four times a year and stay at hotels for a conference. Furthermore, every dollar you spend on travel may be eligible for specific perks on a card dedicated only to travel-related purchases that could lead to things like lounge access for you and your guests, travel insurance, and even labelled bonus points that make that travel not only cheaper but sometimes completely free, if you take certain trips regularly.

The biggest rule of thumb? Don't add a second card for any reason other than you discovered a hole in your coverage and you're organized enough to manage the addition. If you're worried about paying two different dates on two different accounts... simply don't! Incentives are often too good to make you miss a payment. Be aware of your capabilities. And be aware of your limitations.

The Seasonal Business and the Credit Card Dilemma

There's something that doesn't seem to get enough attention: what if the business is not a twelve-month a year operation? What if I'm running a landscaping company that is busy from April through October, but nearly dormant in winter? What if I am providing a tax preparation service that produces 80%-90% of its revenue between January and April? Seasonal businesses face credit card challenges when trying to use a business credit card, and understanding that these challenges exist could save businesses from painful mistakes.

Issuers of credit cards (to the best of my knowledge) do not think in seasons. They think in months. They anticipate engagement (activity) and consistent payments. It is quite normal for you to use your credit card, even during your busy season, which is where you are buying materials, hiring people or getting new material. You think you will have cash flow to pay off the card. Oftentimes you do! But I have witnessed it happen, more than once, that once the busy season is over you have a big balance, and then life happens. An unexpected bill. A customer pays late. The next thing you know, you are starting your slow season with a big balance after accruing interest the last few months all when you have no cash flow.

As a seasonal business you have to have a more intentional plan. Find a card that has a long 0% intro APR, that coincides with your business cash flow. For instance, if you got a card in March, with 12 months no interest, you could use that card during your busiest part of the landscaping season, and then pay it down during the fall/winter before the interest would accrue. The idea is to use the tool smart and in an intentional way.

Alternatively, I have seen seasonal business owners keep two separate savings plans. They use the credit card during the busy season, however, they set aside their cash to pay off the card incumbent in order to earn the rewards—never carrying a balance. This takes a tremendous amount of discipline, but eliminated the trap of spending too much during the slower month.

Here is a hard truth for you: If your seasonal business is really hand to mouth, living off credit during the peak season and paying it back during the offseason, you may not have a credit card problem—it may be a business model issue. A credit card is a means of managing timing in cash flow, not a method of cushioning a bad business. This is hard to face, but it's the type of honesty that may save your business.

The Forgotten Element: Customer Psychology & Payment Processing

This is a dimension most articles do not cover: Your business credit card is not only about what you pay for, it is, for many businesses, what they are accepting. If you are accepting payments from customers (in person, online, or over the phone) the merchant fees you pay to process those credit cards are a real cost that needs your focus.

If you have a small consulting business and you bill $100,000 per year, and you are serviced by the standard payment processor, you are likely paying between 2.9% + 30 cents a transaction in fees, which is about $3,000! You cannot avoid it entirely; credit cards are just how business gets done. But you can think strategically. Some business credit cards actually combine with payment processing solutions or offer merchant services for credit card holders at a discount. For example, American Express has many programs where business card members receive privileged, discount rates in payment processing. While this isn't noted on their flashy marketing pages, if you scroll down into the business services section of their website, it is there.

You also have to consider the psychological aspect of which cards you take. Some businesses, especially in the luxury and professional services segments, have discovered that taking American Express, even with its typically higher merchant fees, appears to give a level of legitimacy and status to the service, or establishment, because of whom Amex customers are perceived to be. It may seem trivial, but client perception matters.

On the opposite side of the ledger, perhaps some business calculate that the 3-3.5% Amex merchant fee does not justify taking it since a small percentage of consumers want to use it. This is where you have to know your customers. If you are a B2B selling to corporate clients, many corporate clients (sometimes solely) prefer to pay with their corporate Amex because they are trying to take advantage of their rewards. For a coffee shop, you probably just are not making the numbers work.

My point is—there is a two-way relationship with cards. You are spending on your card, and your client is spending on their card, through you. Both sides of that equation matters for your bottom line, and both sides deserve thoughtfulness and strategy in planning.

The Undiscussed Art of Retention Offers and Negotiation

Here is a secret or tip, because credit card companies do not advertise this, but every good, experienced cardholder knows, almost everything is negotiable, especially if you are a good customer.

Let's start with annual fees. You have had the card for one year—the annual fee is $95—and you are contemplating keeping or cancelling. You think the card is nice, but doubt the perks are worth paying the fee this year. Before closing it, try calling first. I am being serious; call and say you are about to discontinue your account due to the fee. You may call just for curiosity. What follows can be interesting. There is a retention department, with a whole host of things they can offer, use as incentives, etc. to retain you as a loyal customer. They may waive the annual fee again for another year. They may offer bonus points as an incentive to keep you. They could possibly upgrade some of your perks. I have even heard of the case of a cardholder I personally know who called in and said they were going to quit because of a $95 fee received a promotional $200 statement credit to think it over again, thereby turning their annual fee of $95 on the card into $105 dollars profit.

I am not saying that every person is guaranteed this; it works best for the responsible payer who always pays their bill on time and uses the card at least a couple of times every month. However, whether for curiosity or value, it is worth while to call their customer service line and ask the questions. The worst they can say, is no, and then you are no worse off than when you started.

The same principle applies to when it comes to interest rates. If you have the card long enough, and you've been the poster child customer, who has never been late, or uses it just moderately, etc., you can simple these phoned them and ask if you are eligible for a lower APR. It doesn't hurt to ask, and sometimes if they have not had any complaints and their reporting is good of you, they may consider it for you just for loyalty. It is not guaranteed, but decreasing your interest rates can save you a lot of money on a future balance, if you do carry a balance.

The issuer has spent money already to acquire customers like you and the bank finds value in retaining customers and will likewise offer you something for you remaining loyal to them.

There is also the concept of a product change. Let's say you obtained a travel rewards card when travel was a big part of your business, but that is no longer true. You are not traveling any longer and this annual fee is starting to feel more annoying. You do not want to close this account as that will hurt your credit utilization ratio and length of credit history. Simply call and ask if you can change your product to a no annual fee card from the same issuer. They will likely allow you to do it, you will retain your credit history, and now you do not pay for benefits you are not using.

To be passive with your credit cards is to leave money on the table. These are business relationships and like every business relationship, there is no harm in having a discussion, or if required, a negotiation. The issuers want your business. They may, within reason, be willing to work with you if you are willing to pick up the phone.

When Your Business Expands: The Next Step—Charge Cards and Corporate Cards

There comes a point for some businesses where the traditional model of credit card is somewhat limiting. You are established, you have multiple employees, and your monthly spend has gone from thousands to tens, hundreds of thousands of dollars. At this point, it's prudent to understand some alternative structures.

Charge Cards

A charge card, as opposed to a credit card, does not have a preset spend limit, however it does require you to pay your balance in full every month—no interest charges, no carrying balances, no minimum payments. The American Express Business Platinum Card and the Business Gold Card are the most recognized examples. These cards are geared towards businesses that regularly spend large amounts per month and can pay them off each month.

The benefit is flexibility because you can step outside of a fixed credit limit when an immediate need arises. If you are able to order $30,000 worth of inventory since you receive a bulk discount, great. If, and only if, you can pay off the $30,000 when the bill comes. The lender is evaluating your payment trends and history over a longer period of time rather than holding you to an arbitrary credit line they offered you two years ago.

On the opposite side, you must have the discipline and cash flow to pay it off because there is no "I'll carry this balance for a few months" option. For mature businesses that have predictable revenue, this is actually a feature and not a bug—it enforces financial discipline.

Corporate Cards

Then there are corporate cards, with employee cards attached. If you have advanced to the level of having a team and multiple people making purchases on behalf of the business, having employee issue corporate cards will be a game-changer. Most business cards will allow you to issue employee cards at no extra cost. The beauty of issued employee credit cards is you can now have consolidated billing. Employees can now use an employee card versus their personal one and simply file an expense report, which is beneficial for everyone involved.

Many times you can set a spending limit for each employee, view spending in real time, and even push the data into accounting software. At year-end, rather than hunting down receipts from five different people, you've got everything in one place.

Some of the more advanced corporate card platforms allow for one-time or virtual card numbers, which means you could issue a one-time card number for that freelance designer and a separate number for your monthly software subscription. Providing you with that level of detail around spending is all but impossible and incredibly valuable for companies that have transitioned beyond being a sole proprietor.

The Integration Question: Will Your Card Play Nice with Your Other Tools?

This issue is often overlooked until you are a few steps into the painfully frustrating process; How well does your credit card integrate with your other financial infrastructure? You probably have some accounting software—QuickBooks, Xero, FreshBooks, Hugos—all number of options. The amount of time you will be manually entering the amount, transaction date and even categorizing credit card transactions is time you are not spending growing your business. This is when integration is not just handy, it is actual value.

Most business credit cards now have a feature that syncs transactions automatically to popular accounting platforms. You will link your accounts and purchase flows automatically into your accounting platform. Obviously, you still need to categorize and look over the activities, but you won't need to update the transaction amounts, transaction dates and note a category for each transaction. For a business with dozens of transactions during the week, this can save hours each month.

The issue is, not all integrations are equal. Some cards sync daily, while others sync instantly. Some include pending transactions, while some do not. Some are intelligent and categorize based on the merchant, while some simply dump everything into a generic category. If you are going to use a card, especially if your business does a lot of transactions, it is worth checking how good of a quality the integration would be with your accounting software.

And then there is the point about expense management platforms. If you are using an expense management platform similar to Expensify, Divvy, or Ramp, you want a card that is well integrated with those platforms. Some of these platforms have even launched cards specifically for easy integration with their expense tracking and approval workflow processes.

In fact, some business credit cards have mobile apps where you can take photoss of receipts right from your phone and attach them to specific transactions. The IRS says you must keep receipts for any expenses over $75, but, to be safe, you should keep a receipt for everything as a best practice. A card app that allows you to just take a pic and attach it, is taking away one additional point of friction in your financial life.

So the point is this: in 2025, using a business credit card should be more than just a payment method; it should be a node in your financial ecosystem. If you're still doing things manually that could be automated, you're costing yourself unnecessary hidden time and brain power.

The Exit Strategy: When to Break Up with a Card

Not every relationship is meant to last forever, and yes, that includes your business credit card. There are certainly reasons to close a card, and there are bad reasons, and there is a difference.

Good Reasons to Close a Card

• The annual fee is too high for what the benefits will warrant, and they won't negotiate.
• Your business has changed enough that the card is out-of-step with your spending, and thus no longer needed.
• You've consolidated to a different card that suits your needs better.
• The customer service has become so bad that working with them impacts your business negatively.

Bad Reasons to Close a Card

• You paid the balance off and now think you are done with that card (you should actually keep it open and use it once in a while as it positively impacts your credit).
• You are worried you have "too many" cards (your answer isn't "too many" cards, the answer is what you can responsibly manage).
• You were denied a new card and think closing an old one will somehow help (it won't help and might hurt).

Here is the difference with business credit cards vs. personal credit cards with regards to closure. The impact on your credit score is not as direct to the credit bureau, even in the event of closure. Many business cards end up not being reported to personal credit bureaus unless you default. Just know that the card issuer is watching you along the spectrum of all the cards you have. Close a card with bad reasoning, and it becomes that much harder for you to be approved for that card issuer again down the road.

Should you need to close the card, do so judiciously. Use any remaining rewards or credits first since nothing is worse than figuring out you left money on the table afterwards. If the card has been in your wallet for a while, evaluate if the damage to your credit history is worth the potential benefits. Oftentimes, the smartest option might just be to keep the card open, put one small recurring charge on it, and put autopay in place so you literally never have to think about it again.

And if the reason you're closing is that you are unhappy, tell them why you were unhappy. If the company requests feedback, fill it out. Leave a review. Companies really do have people pay attention to feedback especially when they notice a pattern. Think of it this way, even while you're leaving, you could provide feedback that would benefit the experience for the owners that come after you.

The Psychological Trap: When Rewards Become the Tail Wagging the Dog

I want to talk about something that doesn't get enough attention because it can be uncomfortable conversing about. It's all too easy to get so wrapped up with maximizing rewards that you forget what your original goal was, which is to run a profitable business. I've watched business owners—including smart emotionally intelligent owners—make some really questionable decisions in the pursuit of chasing bonus points. They have picked a more expensive vendor, because it codes a bonus category. They booked a more expensive flight, because it was a triple point fare. They hit a spending threshold for those bonus points by buying new inventory they didn't need right away.

Let's just do the math on the last one. Say you are $1,000 short of reaching a threshold or bonus toward earning $300 back in rewards. So you end up spending $1,000 on inventory. You received a $300 bonus. So congrats, you're down $700. It doesn't matter that you will, at some point use that inventory. The time value of money doesn't care about that. You have essentially tied up $1,000 in capital to get back $300. You haven't won; you have lost under the psychological gamification.

Credit card companies are unbelievably sophisticated in behavioral psychology. Points systems, tiers, bonuses - all designed around keeping you engaged, and spending more money. There's nothing wrong with that, you're getting value there too. Just keep perspective. Points are an added value for spending you were already going to be doing. Points should absolutely NEVER & EVER be a reason for spending.

One of my rules of thumb is if you wouldn't make the purchase with a debit card you should not make it with a credit card just for the rewards. The justification for the business decision has to stand on its own merit. Rewards are for the added value of spending money you were already going to do. Just like cherry on top of an ice cream sundae.

A related point where I've heard people rationalize carrying a balance for rewards additionally justifies carrying a balance because they say they are earning points on the spending. Unless you are getting back 20% or higher (and you won't, you just won't), you lose money. Credit card interest rates for business cards can easily run between 18-25%. There is no sub 20% rewards bonus that could offset those costs. If you are carrying a balance to earn rewards you have quicked into a very large psychological trap, and an expensive one too.

Be grounded! Your business is not about points, it is about profit. Points are a tool to make you money or reduce cost. The moment it turns around and it becomes valuable for its own purpose you need a reality check.

Final Thoughts

A closing thought on your journey in deciding upon a and usage of business credit and business credit cards. Choosing and using a business credit cards is not a one and done decision. It is an ongoing relationship that should change, and grow as the business changes. A card that was perfect for year number one can become completely irrelevant by year three. This is not a sign of failure, it is growth.

Be sure to check-in every year on your card situation. Understand and assess your buying patterns. Assess if you are getting true value from your annual fee. Be aware if another card might be more up your alley in the market place. Be aware of offers in the market, as well as your existing offerings. The market changes all the time, whether you would want it change or not.

And keep in mind, it doesn't matter how many times you read this, confusing a means with the end is only important to the story you tell yourself. A credit card is nothing more than a means to an end. The end, a healthy, sustainable, profitable business that supports your life and your vision. When you lose sight of that as the primary relationship between you and a credit card, you lose that relationship. Your business and your future will appreciate your ability to utilize credit in a wise manner, while maintaining a disciplined relationship with your credit.