Starting a business is exciting, but it also involves numerous expenses. From legal fees to marketing costs, every dollar counts. While services like LegalZoom simplify the business formation process, it's crucial to consider how you can maximize your credit card rewards during this phase. At RewardSmart, we want to help you turn necessary expenses into valuable points, miles, or cashback.

Choosing the Right Card for Business Formation Expenses

The best credit card for your business formation will depend on your spending habits and reward preferences. Consider these options:

  • Cashback Cards: If you prefer simplicity, a cashback card offers a straightforward return on every purchase. Look for cards with a flat rate of 1.5% or 2% cashback on all spending. A card like the Chase Freedom Unlimited, with its potential for 1.5% cashback, can be a great option if you value simplicity.
  • Travel Rewards Cards: If you anticipate business travel, a travel rewards card can help you accumulate points or miles for flights and hotels. Cards like the Chase Sapphire Preferred or American Express Gold Card offer valuable travel rewards and bonus points on specific spending categories that may align with your business needs.
  • Business Credit Cards: Many banks offer credit cards specifically designed for small business owners. These cards often come with perks like expense tracking tools, employee cards, and higher credit limits. The Ink Business Preferred card from Chase offers 3x points on travel and select business categories.

Strategically Using Your Card with LegalZoom and Alternatives

When paying for business formation services, consider these strategies:

  • Check for Bonus Categories: See if LegalZoom or its alternatives code as a bonus category on any of your credit cards. Some cards offer increased rewards for legal services or online purchases. For example, some cards may offer 2x or 3x points on online transactions.
  • Meet Minimum Spending Requirements: If you're applying for a new credit card, use the business formation expenses to help you meet the minimum spending requirement to earn the welcome bonus. These bonuses can be worth hundreds of dollars or thousands of points.
  • Consider Payment Plans: If LegalZoom or an alternative offers a payment plan, it may be beneficial to spread out the payments and maximize your rewards earning over a longer period. Ensure the interest rate on the payment plan doesn't outweigh the value of the rewards you'll earn.

Alternatives to LegalZoom and Their Credit Card Acceptance

Before committing to LegalZoom, explore other options like ZenBusiness or Incfile. Compare their pricing, services, and credit card acceptance policies. Some providers may offer discounts or promotions that can further enhance your savings.

  • ZenBusiness: Often praised for its customer service, ZenBusiness generally accepts major credit cards.
  • Incfile: Known for its free basic LLC formation, Incfile also accepts major credit cards, allowing you to earn rewards on upgrades or additional services.

Always verify the accepted payment methods before making a decision.

Don't Forget About Ongoing Business Expenses

Your credit card rewards strategy shouldn't end with business formation. Continue using your card for eligible business expenses, such as marketing, office supplies, and software subscriptions. Track your spending to ensure you're maximizing your rewards earning potential.

Actionable Takeaway: Before choosing a business formation service, research their payment options and align your choice with a credit card that offers valuable rewards for your spending habits. Use a new card's welcome bonus to offset the initial costs of starting your business. Remember to always pay your balance in full and on time to avoid interest charges.