How Contractors Can Save $1000s By Using the Right Credit Cards

If you’re a contractor looking for ways to cut costs and earn more money, you’re not going to want to miss this easy-to-use strategy.
Last updated Nov 2, 2021 | By Brandon Neth
How Contractors Can Save $1000s By Using the Right Credit Cards

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As a contractor, you shouldn’t overlook a credit card as a valuable tool anymore than you would a hammer. Whether you’re on your first contracting job or you’re a seasoned professional, you have the potential to earn cash back and valuable travel rewards on the spending you’re already doing.

If you aren’t familiar with how rewards credit cards can take your earning capabilities as a contractor to a new level, this article is for you.

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How credit cards can be a powerful tool for contractors

As a contractor, it’s important to stay on top of your finances. If a job requires you to pay for materials out of your own pocket, you may not get reimbursed for those costs until after you complete the job. Depending on the size of the job, these costs can significantly set you back. Depending on the length of the job, you could be waiting months to get paid and/or reimbursed.

However, there’s a way you can avoid using your cash reserves to pay for the costs of doing business while also earning big rewards: credit cards.

When you use the best business credit card to fund your business purchases, it lets you do two things: alleviate the burden of using your own money to front the costs of materials and earn cash back on that spending. For these reasons, credit cards are valuable lines of credit that every contractor needs to add to their wallet.

Let me paint a picture of what I’m talking about in real-world terms so you can see the enormous money-saving potential of adding a credit card to your toolkit.

Paying for materials in cash versus credit cards

Say you’ve landed a new roofing job. The job is to replace the entire roof on a 3,000-square foot home. The homeowner told you what sort of material they want to use, but it’s up to you to supply everything. So you head to HomeDepot to get what you need.

You get the materials, and the total comes to roughly $15,000. Let’s look at how funding this project with cash versus a credit card would play out.

Method of payment The impact on your cash flow Upon finishing the job and getting paid by the client
You pay using $15,000 cash you earned from a previous job. You’re out $15,000 in your bank account until you complete this roofing job and get paid. This could mean you’re short on cash for other expenses or projects. You get reimbursed for your $15,000 and put it back in your bank account.
You pay using a new Chase Ink Business Cash Credit Card. You’re using your card’s credit line until you get paid, not your cash, so your bank account is unaffected.

You also earn $750 cash back from spending enough to qualify for your new card’s sign-up bonus. You earn an additional $150 cash back just for making the purchase itself.

You avoid paying credit card interest because the card offers a 0% intro APR for 12 months (then 13.24% to 19.24% (variable)) and you pay off your $15,000 balance in less than 12 months.

You could also cash out your rewards points for a minimum of $750 in cash back.

By using the Chase Ink Business Cash Credit Card instead of cash, you earn $750 cash back. And that’s just the sign-up bonus — that’s not including the points you earned on your purchase itself. With the Ink Business Cash, you earn 5% cash back at office supply stores and on internet, cable, or phone services (up to $25,000 combined annually); 2% cash back at gas stations and restaurants (up to $25,000 combined annually); and 1% cash back on everything else. That means your $15,000 The Home Depot purchase also earned you $150 cash back. So that’s $750 cash you could earn for making one purchase, and this card even has a $0 annual fee.

This is just one example of how the right business credit card can improve your bottom line. In fact, there are many business credit cards that can transform your expenses. All have something unique about them but all allow you to cut costs and increase your earnings.

The best credit cards for contractors

As a contractor with a limited liability company (LLC), it’s important you stick with business credit cards for your business expenses. You carry a lot of liability in your profession, and using a personal credit card for your business expenses opens you up to being held personally liable should something go wrong on the job. Using a business card for all your business expenses keeps you and your business completely separate from one another.

With that in mind, I’ll walk you through a handful of the best business credit cards I recommend for contractors.

Card name Welcome bonus Rewards rate Intro APR on purchases Benefits
Chase Ink Business Unlimited Credit Card Earn $750 bonus cash back after spending $7,500 in the first 3 months 1.5% cash back on all spending 0% for 12 months (then 13.24% to 19.24% (variable)) 120 days of protection for new purchases; extended warranty protection; employee cards at no additional cost
Chase Ink Business Cash Credit Card Earn $750 bonus cash back after spending $7,500 in the first 3 months 5% cash back at office supply stores and on internet, cable, or phone services (up to $25,000 combined annually); 2% cash back at gas stations and restaurants (up to $25,000 combined annually); and 1% cash back on everything else 0% for 12 months (then 13.24% to 19.24% (variable)) 120 days of protection for new purchases; extended warranty protection; employee cards at no additional cost
Chase Ink Business Preferred Credit Card Earn 100,000 points after spending $15,000 in the first 3 months 5X points on Lyft rides; 3X points on the first $150,000 spent each year on travel, shipping, internet, cable, or phone services, and advertising purchases with social media and search engines; and 1X points per $1 on everything else N/A (then 15.99% to 20.99% (variable)) 120 days of protection for new purchases; extended warranty protection; employee cards at no additional cost; cell phone protection 
Capital One Spark Cash for Business Earn 50,000 miles after spending $4,500 in the first 3 months 5X miles on rental cars and hotels booked through Capital One Travel, and 2X miles on every purchase, every day N/A (then 20.99% (variable))     Free employee cards; 90 days of purchase security and extended protection 
The Blue Business® Plus Credit Card from American Express Earn 15,000 Membership Rewards points after spending $3,000 on purchases in the first 3 months 2X Membership Rewards points on business purchases up to $50,000 each year, and 1X points on purchases after that 0% for 12 months (then 13.24% to 19.24% (variable) (See rates and fees)) Employee cards at no additional cost

Chase Ink Business Unlimited Credit Card

The Chase Ink Business Unlimited Credit Card is a straightforward credit card that takes the guesswork out of earning rewards. There’s no need to worry about spending categories with this card. You simply earn a flat amount every time you swipe your card. There are no spending caps either, which means you’ll earn unlimited rewards on all your business expenses.

Right off the bat, you’ll earn 1.5% cash back on all spending, no matter where you shop or what you buy. You’ll also have 0% APR on your purchases for the first 12 months (then 13.24% to 19.24% (variable)). This is huge if you have to carry a balance until you get paid for a project, as you won’t rack up any interest charges. And because Chase doesn’t report business activity to your personal credit, carrying a balance on this card won’t negatively impact your personal credit score by increasing your credit utilization.

And as a new cardmember, you can also earn $750 bonus cash back after spending $7,500 in the first 3 months. This is cash that goes right back into your pocket on spending you’re already doing. Plus, this card has a $0 annual fee, so there’s no cost to you.

Chase Ink Business Cash Credit Card

The Chase Ink Business Cash Credit Card rewards you for spending within certain categories. With this card, you’ll earn 5% cash back at office supply stores and on internet, cable, or phone services (up to $25,000 combined annually); 2% cash back at gas stations and restaurants (up to $25,000 combined annually); and 1% cash back on everything else.

This card comes with a $0 annual fee, and new cardmembers can earn $750 bonus cash back after spending $7,500 in the first 3 months. The Chase Ink Business Cash Credit Card also comes with 12 months of 0% APR (then 13.24% to 19.24% (variable)), so you can have the freedom of carrying a balance until you get paid without worrying about costly interest charges.

Now, you might be thinking “My contracting business has no use for 5% cash back at office supply stores. I get everything I need at The Home Depot or Lowe’s, and I want to earn the most rewards on that spend.”

You’re right. And there’s a way you can do that with this card.

If you go into an office supply store such as Staples or OfficeMax, you’ll usually find a variety of gift cards for sale. If you purchase a Home Depot or Lowe’s gift card from an office supply store using your Chase Ink Business Cash Credit Card, you’ll earn 5% cash back on your purchase. Then, you pay for your materials at Home Depot or Lowe’s using that gift card. Although you would have originally only earned 1% cash back with this card at Home Depot or Lowe’s, now you can earn 5% cash back.

Although taking the time to go get these gift cards is an added step, it pays off by allowing you to earn at a higher rate. You’re buying your project materials no matter how you pay for them, so why not get rewarded for it?

Chase Ink Business Preferred Credit Card

The Chase Ink Business Preferred Credit Card comes with a lucrative sign-up bonus where you can earn 100,000 points after spending $15,000 in the first 3 months. That’s worth $1,250 toward travel when redeemed through the Chase Ultimate Rewards travel portal or $1,000 in cash back. In addition, you can earn 5X points on Lyft rides; 3X points on the first $150,000 spent each year on travel, shipping, internet, cable, or phone services, and advertising purchases with social media and search engines; and 1X points per $1 on everything else.

This card does come with a $95 annual fee, but it easily pays for itself when you consider how much you can earn from the sign-up bonus. If you regularly spend within these bonus categories, this card becomes even more valuable.

Hot Sign-up Bonus

Intro Offer

100,000 points

Annual Fee

$95

Rewards Rate

up to 5X points

Benefits and Drawbacks

Benefits

  • 100,000 point sign-up bonus
  • 3X points on travel and common business spending categories
  • Flexible redemption options
  • Additional employee cards at no extra cost

Drawbacks

  • Has annual fee
  • No intro 0% APR promotion offered
  • Limited business-specific benefits
Card Details
  • Earn 100,000 points after spending $15,000 in the first 3 months
  • 5X points on Lyft rides; 3X points on the first $150,000 spent each year on travel, shipping, internet, cable, or phone services, and advertising purchases with social media and search engines; and 1X points per $1 on everything else

The Blue Business Plus Credit Card from American Express

The Blue Business Plus Credit Card from American Express is another flat-rate rewards credit card that allows you to earn 2X Membership Rewards points on business purchases up to $50,000 each year, and 1X points on purchases after that. There’s a $0 (See rates and fees) annual fee (terms apply), and you can benefit from a 0% intro APR on your purchases for the first 12 months (then 13.24% to 19.24% (variable)). Using this card can provide significant savings if you have to carry a balance from month to month until you get paid.

If you already have an American Express card, there’s no need to worry about getting dinged with a hard inquiry. American Express will perform only a soft pull on your credit. Additionally, American Express doesn’t report to your personal credit on a monthly basis.

Simplified Earnings for Small Business Owners

Intro Offer

15,000 Membership Rewards points

Annual Fee

$0

Rewards Rate

Up to 2X points

Benefits and Drawbacks

Benefits

  • Earn 15,000 Membership Rewards after spending $3,000 in the first 3 months
  • 2X Membership Rewards Points on first $50,000 each year
  • Global Assist hotline
  • No annual fee. Terms apply.

Drawbacks

  • Has foreign transaction fee
Card Details
  • Earn 15,000 Membership Rewards points after spending $3,000 on purchases in the first 3 months
  • 2X Membership Rewards points on business purchases up to $50,000 each year, and 1X points on purchases after that
  • Terms apply

Capital One Spark Cash for Business

The Capital One Spark Cash for Business is another solid option for contractors who simply want a flat-rate rewards credit card that allows them to earn cash back on all their purchases. With this card, you’ll earn 2% cash back on every purchase, every day. And as a new cardmember, you can earn up to $1,000 cash bonus — $500 after spending $5,000 in the first 3 months, plus $500 after spending $50,000 in the first 6 months.

It’s important to note that, unlike the cards mentioned above, Capital One does report your business activity to your personal credit on a monthly basis. So if you carry a balance on your card, it can impact your personal credit score. Capital One also pulls your personal credit report from all three credit bureaus when you apply.


Bottom line

As a contractor, your business expenses give you a lot of potential to earn big rewards. Using the right business credit card for your expenses can put cash back into your pocket as long as you practice good financial habits. Pay off your balance in full each month to avoid interest charges or you can avoid these charges by using a 0% APR credit card.

Credit cards are valuable tools that can transform your contracting business. Decide which credit card best fits your needs as a contractor, and watch the rewards roll in.

Unlimited Cash Back

Intro Offer

$750

Annual Fee

$0

Rewards Rate

1.5% cash back

Benefits and Drawbacks

Benefits

  • New Offer: $750 cash back sign-up offer
  • Unlimited 1.5% cash back on all spending
  • 0% APR for 12 months on purchases
  • No annual fee

Drawbacks

  • Has foreign transaction fee
  • No lucrative rewards categories
Card Details
  • Earn $750 bonus cash back after spending $7,500 in the first 3 months
  • 1.5% cash back on all spending
  • Intro purchase 0% offer: 0% for 12 months then 13.24% to 19.24% (variable)

Author Details

Brandon Neth Brandon Neth is a credit card and award travel expert. He runs social media and audience growth for FinanceBuzz, including the FBZ Elite Facebook travel group. He’s spent the last 11 years using credit card points and miles to travel the world, taking him to 600 cities in 76 countries and counting. He's well-versed in credit cards, early retirement, real estate investing, and frugal living. He's been featured in Business Insider, Yahoo, MSN, Credit.com, U.S. News, Reader's Digest, and The Wirecutter (A New York Times Company).