DTC 368: Shopify Credit

🤝 Give your brand credit

Marketing is expensive. This is especially true for smaller brands that want to stand out from the competition who likely have more experience and more money. 🙁

Hubspot notes that the marketing budget for small business owners has grown by over 5% since 2011

Other studies show that small businesses spend up to $15K monthly on advertising!

That amount of money can be intimidating to new business owners, but Shopify is offering a new program and expanding premium-tier features to make that expensive pill a bit easier to swallow.

Let’s consider why the new Shopify credit card program could play an integral role in your marketing efforts, and what consolidating your business expenses into Shopify’s platform can do for your finances.

What is a Shopify credit card?

Like Shopify says, “(Shopify Credit) is a pay-in-full business credit card, with cashback rewards designed specifically for entrepreneurs.” 

You’ll notice that Shopify outlined specific expenses like marketing, fulfillment, and wholesale that would benefit from being purchased through a Shopify credit card rather than your typical Visa or Mastercard. 

🔑 Key benefits of the Shopify credit card

🤑 3% Cashback – Shopify’s new credit card can net you up to 3% cashback from your ad spend! This will leave some extra cash for when your business needs it most… Or for a new bean bag chair in the office. 

You could even put those rewards back into your marketing efforts for even more cashback in the future.

The cashback offer supports ad spend on platforms like Meta, Google, TikTok, and many more. Check out the complete list of eligible platforms here.

👏 Interest-Free – Shopify credit cards are interest-free, assuming you’ve paid each monthly balance in full. Repayment terms are quite flexible, giving businesses a maximum of 56 days to fully pay their balance.

🧐 No Credit Checks – First-party and traditional underwriting methods are used to verify your business before the Shopify team confirms your eligibility. Your credit limit is then established based on your store’s revenue and performance. 

This means that recurring credit reviews may permit your business to qualify for higher borrowing limits as you grow with your business. 

💳 Free Cards – The business owner could request only one card to assume total control over the monthly spend or request cards for each registered staff member to use for their team or department. 

All eligible expenses will contribute to the borrowing limit and cashback reward thresholds.

🌍 Visa Perks – Purchase protection, travel and emergency assistance, auto collision, and damage waiver are all included with a Shopify credit card. Learn more about Visa perks here.

😢 Drawbacks

We’ll reiterate the significance of qualifying for up to 3% cashback because the 3% rate is given to the expense category with the highest value. 

As we discussed, Shopify credit cards offer cashback on three unique business expenses:

  • Advertising
  • Fulfillment
  • Wholesale

The 3% rate is automatically assigned to the category with the highest cost while the other two receive a 1% cashback rate. 

The 3% cashback rate only applies to expenses under $100K per year. If your expenses exceed this amount, the rate will be reduced to 1% to match the other two categories. The $100K threshold eventually resets on the first day of the calendar month your card was approved.

Additionally, the Shopify credit card is a pay-in-full card, meaning that business owners do not have the option to make a minimum payment. If the total owed is not submitted by the due date, the card will be locked until the remaining balance has been paid in full.

🙌 Total Consolidation

Shopify Credit combined with a Shopify Balance account offers businesses the opportunity to consolidate their expenses on Shopify’s platform. A Shopify credit card bill can be paid through a Shopify Balance account.

Shopify Balance is a specialized business bank account with both benefits and restrictions not seen with a conventional bank account. 

A Shopify Balance account is not required to qualify for a Shopify credit card. However, it is another step toward total consolidation should you feel it’s beneficial for your business’ finances.

Expense consolidation allows businesses to organize their monthly bills and investments so that finance teams and entrepreneurs can stay aligned on financial goals and areas to redistribute their total budget most effectively.

A game changer for marketing

A business acquiring a Shopify credit card could unlock access to Shop Cash

This is a rewards program that aims to lower acquisition costs, maximize your conversions, and retain more customers through the Shop app. 

This program’s value is emphasized by its exclusivity to Shopify Plus merchants. 

The chance to take advantage of premium services like Shop Cash shouldn’t be underestimated by a growing business that can’t afford to spend $2K on their ecommerce platform to unlock the full benefits of Shopify Plus.

Notable merchants on the Shopify Plus plan include Allbirds, Knix, and Ruggable, so your brand would be gaining access to some undoubtedly serious tech.

📎 The application

The business owner should see a banner to start the application process for the credit program in the admin of the Shopify store. They could also click on the link that would have been sent to the store owner’s email and initiate the application process. 

If you do not see the banner, it is because your business operates outside of the United States or you have not met the requirements set by Shopify’s underwriting process. 

🟢 It’s a start

Shopify is aware of at least some of the significant obstacles many small businesses face. While consolidation and credit may not solve every issue, the Shopify credit card program is worth considering if you’ve been looking to save on ad spend or leverage premium ecommerce features to take your business to the next level.

In what ways could a credit card or business bank account organize your finances? How would you leverage the Shop Cash rewards program to grow your business? Let us know in a reply to one of our emails!

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