A rewards credit card is a great way to earn cash back or travel points on the spending you do as a part of your business.
And beyond the rewards, there are also perks, benefits and protections that credit cards offer that could be useful to contractors.
These factors make using a credit card for business-related purchases preferable to debit card or cash transactions in many cases.
You may be wondering which credit card is right for you. There are business credit cards that could be a fit, but there are also personal credit cards that offer benefits you may find more useful.
In this article, we'll look at some things you should consider before picking a card and offer some suggestions on the best credit cards for contractors. You can read our full credit card methodology here.
Best Credit Cards for Contractors Right Now
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Alliant Cashback Visa® Signature Credit Card
Best for: Everyday Cash Back with No Annual Fee
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Capital One Venture X Rewards Credit Card
Best for: General Travel
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Wells Fargo Active Cash® Card
Best for: Introductory 0% APR Period
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Wells Fargo Autograph Card
Best for: Popular Spending Categories with No Annual Fee
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Ink Business Preferred® Credit Card
Best for: Business Credit Card
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3 Things Contractors Should Consider Before Applying for a Credit Card
Before we get deeper into the details on each of these cards, here are a few things you should consider before applying:
- You're going to have a decision to make on business vs. personal credit cards: You don't have to be a large corporation to have a business credit card. In fact, most business credit cards don't even require you to have an incorporated business to be eligible. That means even a small-account contractor working a side hustle may be eligible. These cards oftentimes offer a more attractive welcome bonus, but they also usually require a high spend to earn the payout.
- Clark Howard says personal credit cards offer better consumer protections than business credit cards: Did you know that many of the assurances and protections on things like fees and interest rates provided in the Credit Card Accountability, Responsibility and Disclosure Act of 2009 apply only to personal credit cards? Clark says that the credit card companies are tempting small business owners to forgo those protections in exchange for better rewards programs, flexibility for employee usage and higher spending limits. He says business cards are also subject to being billed on a shorter cycle than personal cards and also may be subject to frequent interest rate hikes.
- How much traveling do you do as a contractor?: Generally speaking, my advice for anyone seeking a new credit card is to lock in the best return you can on everyday spending and then maximize the value of the spending categories you use most. So, if you're traveling a lot from one contractor project to the next, you may find that a travel credit card is a way to both maximize rewards on the category you use most and enjoy travel perks like airport lounge access and trip purchase protection.
Best for Everyday Cash Back with No Annual Fee: Alliant Visa Signature® Card
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Annual Fee:
$0.00
Foreign Transaction Fee:
None
Rewards Program Details:
Tier 1 rewards members receive 2.5% cash back on all purchases up to $10,000 in spending per billing cycle. After that, they’ll receive 1.5% back for the remainder of the billing cycle. Tier 2 rewards members receive 1.5% cash back on all purchases.
This Is the Card for You If:
You are willing to join a credit union and keep money there in exchange for a great return of 2.5% back with no annual fee or categorical restrictions. |
Why We Like It for Contractors
Sometimes simplicity is the best path forward when trying to earn rewards as you juggle spending on different projects.
And though you’ll have some hoops to jump through in setting up an account with a credit union to use this credit card, you may find that it’s worth it in the long run so that you can focus on other details of your consulting business.
Once you're set up as a Tier 1 rewards member with this card, you'll earn 2.5% cash back on everything you buy for up to $10,000 in spending per billing cycle. That's a great return on a no-annual-fee card that doesn't limit you based on the type of purchases you make!
If you don't think earning an extra half-percent is worth the trouble, you could instead apply for a 2% cash back card like the Citi Double Cash® Card.
Best for General Travel: Capital One Venture X Rewards Card
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Annual Fee:
$395 (See Rates & Fees)
Foreign Transaction Fee:
None
Bonus Offer:
Earn 75,000 bonus miles
Bonus Offer Disclaimer:
when you spend $4,000 on purchases in the first 3 months from account opening
Rewards Program Details:
2 Miles per dollar on every purchase, every day. 10 Miles per dollar on hotels and rental cars booked through Capital One Travel. 5 Miles per dollar on flights booked through Capital One Travel.
This Is the Card for You If:
You are a frequent traveler who wants airport lounge access and can easily claim the annual $300 travel credit and anniversary miles provided. |
Why We Like It for Contractors
If many of your purchases as a contractor are travel-related, you may want to add this Clark Howard favorite to your wallet.
Not only will you get a lucrative welcome bonus, but having this card in hand will also net you lounge access, help you avoid foreign transaction fees and will cover the cost of your TSA PreCheck or Global Entry membership.
You’ll also be set with at least 2% back in miles on all purchases and as much as 10% back in miles on travel that is booked through Capital One’s portal.
You may be concerned by the $395 annual fee, but there is an easy-to-redeem annual $300 travel credit available that effectively makes it a $95 per year card.
This card is in Clark's wallet, and it is his favorite travel credit card for a reason.
“I think it’s absolutely great,” Clark says. “How could I say that you should spend $395 per year on a card? They give you $300 of it back as travel credits for travel you purchase through their travel portal. So the net annual fee is $95. And on top of some travel benefits, you get free airport lounge access … Plus, you get 2x miles on all of your purchases, just like a 2% cash back card.”
Best for 0% Introductory APR Period: Wells Fargo Active Cash® Card
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Annual Fee:
$0.00
Intro APR Period on New Purchases:
15 months
Intro APR Period on Balance Transfers:
15 months
Variable APR:
20.24%-29.99% based on your creditworthiness.
Bonus Offer:
Earn a $200 cash rewards bonus when you spend $500 in purchases in the first 3 months.
Rewards Program Details:
Earn unlimited 2% cash rewards on purchases with no categories to track or quarterly activations.
This Is the Card for You If:
You want an everyday spender that earns 2% cash back on all purchases with no annual fee. |
Why We Like It for Contractors
There are 0% introductory APR credit cards on the market that may offer more months of 0% on new purchases or balance transfers, but they often have crummy rewards programs attached.
That makes them mostly useless to your contractor business after the 0% period expires.
This card is one of our favorites for cash back with no annual fee because it gives you 2% back on every purchase that you make.
That means that once you’ve paid off the balance on your 0% purchase or transfer, you’ll still have a very useful credit card for your business moving forward.
Best for Popular Spending Categories with No Annual Fee: Wells Fargo Autograph Card
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Annual Fee:
$0.00
Foreign Transaction Fee:
None
Bonus Offer:
Earn 20,000 bonus points when you spend $1,000 in purchases in the first 3 months.
Rewards Program Details:
Earn unlimited 3X points on the following: Restaurants: dining in, take-out, catering, delivery and more Plus, earn 1X points on other purchases.
This Is the Card for You If:
You want a no-annual-fee card with auto rental and cell phone coverage, as well bonus rewards on popular spending categories. |
Why We Like It for Contractors
This card can be sort of a “catch all” for contractors who want bonus rewards on popular spending categories but don’t want to fork over money on an annual fee.
You’ll get 3x points on dining, travel, gas, transit, streaming and phone plans. You’ll have an easy-to-earn welcome bonus, and you’ll have auto rental and cell phone protections when you use this card to rent your car or pay your wireless bill.
The 1x points on all other purchases is weak, but if you pair it with a 2% credit card you may have a really nice tandem for earning 2% or more on all purchases without paying any annual fees.
Best for Business Credit Card: Ink Business Preferred® Credit Card from Chase
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Annual Fee:
$95
Foreign Transaction Fee:
$0
Bonus Offer:
New Cardmember Offer! Earn 100,000 bonus points
Bonus Offer Disclaimer:
after you spend $8,000 on purchases in the first 3 months from account opening.
Rewards Program Details:
Earn 3 points per $1 on the first $150,000 spent in combined purchases on travel, shipping purchases, Internet, cable and phone services, advertising purchases made with social media sites and search engines each account anniversary year. Earn 1 point per $1 on all other purchases-with no limit to the amount you can earn.
This Is the Card for You If:
You have a small business that will have enough spending volume to earn this generous welcome bonus and also can benefit from the bonus rewards categories. |
Why We Like It for Contractors
If you determine that going the business credit card route is right for you, the Ink line of business cards from Chase is a good place to start your search.
The Ink Business Preferred® is one we like because it has a generous welcome bonus and 3x points multipliers on spending categories that should be popular with contractors, such as travel, shipping, internet, cable, phone and advertising expenses.
Methodology for Credit Card Analysis
For the purposes of determining which credit cards are “best,” we got input from Clark Howard and sought to find cards that fit his credit card strategy best.
Team Clark spent many hours reviewing the rewards credit cards on the market, assessing them for several factors including:
- Annual fees
- Rewards programs
- Welcome offers
- Length of introductory APR periods
- Balance transfer introductory periods
- Additional fees (transaction or otherwise)
- Perks offered to cardholders
- Reputation of the financial institution issuing the card
We did not factor in non-introductory APR as a part of the evaluation, because interest rates are going to vary based on your financial circumstances. Clark recommends never carrying a balance on credit cards, so the non-introductory interest rate shouldn’t matter for your card anyway.
We also did not include offerings from local or regional banks or credit unions because they’re not available to everyone. Often, local institutions will have desirable cards, so we recommend that you compare your local bank or credit union’s cash back credit cards to the ones that made this list.
Are you a contractor who will be applying for a credit card soon? Did you recently get one and have some advice to share? We’d love to hear from you in the Clark.com community.
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