In the world of ecommerce, where financial flexibility is often a decisive factor, the emergence of tailored solutions can significantly impact business operations.
Among these offerings, Shopify Credit stands out as a credit card designed specifically for ecommerce business owners.
But the card is a new, mainly untested offering from Shopify, so we want to take a comprehensive view of Shopify Credit, exploring its features, benefits, and potential drawbacks.
We mainly recommend Shopify Credit for:
- Brands without a business credit card right now.
- Those who would prefer not having their credit checked, but can prove a decent business history.
- Merchants in the United States.
- Business owners who could benefit from 3% cashback, no fees, and no interest on a credit card.
- Owners who could benefit from a 56 day payment period.
- Merchants who will absolutely pay their full balance at the end of the term.
The Fine Print
The offerings from Shopify Credit sound pretty great: an extended payment period for merchants to spend on ecommerce-related categories and receive 3% rewards on a monthly basis.
But what’s the catch?
We dove into the fine print to see if we were missing anything.
To be fair, there aren’t any bad things in the fine print, only some details you should be aware of:
- You must pay your balance in full every payment period. Shopify Credit is a pay-in-full card. That’s probably how they’re able to extend the payment period to 56 days. So, it’s required to pay the entire balance on the 56th day; otherwise, Shopify takes the money from your designated bank account or Shopify Balance account. If there’s not enough money in those accounts, the credit card gets locked.
- Shopify is not the bank or credit card company in this situation. They partner with Stripe Payments Company and Celtic Bank, Member FDIC, to process payments and manage the flow of money. Celtic Bank is a federally chartered bank in Utah. Similar to many Fintech setups, Shopify partnered with a smaller regional bank that services nationwide Fintech operations (this has its advantages, but some people see some risks in this setup). Please read up on the bank’s terms before applying.
- There’s a maximum of $100,000 in monthly spending to receive rewards on your top monthly business category.
- You can only use the card for business expenses.
- Shopify does, in fact, have an evaluation process for accepting merchants into its credit card program: the performance of your business. So, your credit isn’t looked at, but you probably need a profitable business, or one that has a track record. Shopify isn’t clear on the requirements.
- You must pay down the card (in full) in 25 days after your monthly billing cycle ends. This may sound confusing, since we previously mentioned a 56-day payback period. Here’s how they figure it: You get 31 days for your billing cycle + 25 extra days to make the payment.
A Glance at Shopify Credit
One of the most appealing aspects of Shopify Credit is its fee structure. Straying from the conventional norms, this card proudly boasts the absence of fees across the board.
No annual fees, no foreign transaction charges, and no setup costs – a combination that could potentially ease the financial burden for business owners. In addition to this, the card has a no-interest policy, promising a rare blend of financial freedom.
Keep in mind, however, that Shopify Credit is a full-payment card, so although there are no fees, they will freeze your card the moment you miss a full payment.
For those wary of credit checks casting shadows on their applications, Shopify Credit extends a welcome proposition. The absence of credit checks in the application process could provide a sense of relief and accessibility, ensuring that even those with less-than-perfect credit histories are considered.
Having said that, Shopify does look into your business performance, eliminating some newer merchants from getting the card.
Other than that, the card offers a strong cashback rewards program made especially for merchants, along with Visa Perks, extended payment terms, and options to get cards for everyone in your organization.
As we delve deeper into this review, it's important to maintain a balanced perspective. While Shopify Credit undoubtedly presents several advantages, it's equally critical to explore any potential limitations that might arise. By doing so, we aim to provide a holistic understanding of Shopify Credit's potential impact on ecommerce business owners.
Shopify Credit: The Features
From the fee structure to its credit check process, this section takes a look at which features and offerings come with Shopify Credit. We’ll also explore how Shopify Credit gives you bonuses when spending on areas like marketing, fulfillment, and shipping.
Here are the features and offerings we found most interesting:
A Notable Fee and Interest Structure
Shopify Credit introduces a fee and interest structure that may catch the interest of potential users. The absence of fees, including annual, foreign transaction, and setup charges, along with a no-interest policy, could definitely be perceived as advantageous.
Even after we combed through the fine print, there were no hidden fees. You must, however, be aware that there are some limitations to your spending (covered further in the article), and one big stipulation: It’s a full payment card, meaning you must make a full payment within the 56 days, or they’ll block the card.
Extended Payment Windows
One of the best parts about Shopify Credit is the extended payment window of up to 56 days, which could potentially aid in cash flow management. The no-fee and no-interest proposition remains intact, even within this extended timeline.
This means that, unlike most business and personal credit cards, you have up to 56 days to pay back your debts—fee free.
But again, it’s necessary to make a complete balance payment at the end of that 56 days, or you risk Shopify freezing your spending. In addition, the 56 days is a maximum based on the highest number of days in a month. Some months have fewer days, so it’s best to go by the rule of the entire month + 25 days. That’s the amount of time you have to pay back your balance.
No Credit Check
One major selling point of Shopify Credit is the lack of credit checks during the application process, promising a decision within minutes. Additionally, the absence of the need for guarantors might offer a level of ease for applicants.
There is, however, a catch: Although Shopify skips the credit check, it assesses your past business performance. For many merchants, this is welcoming news. But for new entrepreneurs looking for a card to launch their business, you’ll likely have to wait until you have some sales to report.
Take Out Multiple Cards for Business Associates
For those aiming to streamline business expenses, the option to allocate individual cards to team members without incurring charges could be advantageous.
Impressive Cashback Rewards
In the ever-evolving landscape of ecommerce, financial benefits that cater to the specific needs of merchants can be a game-changer. One such intriguing facet of Shopify Credit is its cashback rewards program, thoughtfully designed to provide a financial boost to business owners.
This section delves into the details of Shopify Credit's cashback rewards offering, shedding light on the elements that could resonate with merchants seeking tailored advantages.
At the heart of this offering lies the notion of personalization. Shopify Credit's cashback rewards are intricately tailored to your business, acknowledging that every merchant's spending patterns are unique. By offering up to 3% cashback on eligible purchases within your top spend category, this rewards program demonstrates a keen understanding of the financial dynamics of ecommerce operations.
What sets this cashback program apart is its versatility. Merchants can earn 1% cashback on the other two categories, creating a well-rounded opportunity for financial gains. These categories encompass a range of business essentials that resonate with every ecommerce owner's journey.
- Marketing expenditures, for instance, can yield substantial cashback rewards. Whether it's promoting products through platforms like Audiences, TikTok, Shopify Email, or Google, these expenses fall into the Marketing category, allowing merchants to reap tangible benefits from their promotional efforts.
- For Fulfillment, the rewards extend to spending on USPS, Shopify Fulfillment Network, Flexport, UPS, and Shopify Shipping. This recognition of the fulfillment process as a critical component of business success ensures that merchants can earn while optimizing their supply chain operations.
- Wholesale, yet another significant aspect of ecommerce, also finds its place in the cashback rewards program. From wholesale orders to interactions with manufacturers and suppliers, these expenses can contribute to your cashback earnings, highlighting Shopify Credit's holistic approach to business finances.
- As a bonus, merchants can use the Shopify Credit card to pay their monthly Shopify bills. Set the card as your default payment in the Shopify Admin, and receive rewards on all eligible purchases, whether that’s for marketing apps, fulfillment payments, or whatever’s on your Shopify bill.
As merchants navigate the complex financial landscape of ecommerce, Shopify Credit's cashback rewards program seems suitable to get a little back when spending so much on your business. By tailoring rewards to your specific spending categories, offering substantial cashback percentages, and encompassing critical business aspects like marketing, fulfillment, and wholesale, this program echoes Shopify's commitment to addressing the unique financial needs of its merchants.
The 1% isn’t anything to get excited about (just about every credit card out there offers 1% on everything), but the 3% carries some meaning, particularly if you’re spending far more in one area than others.
Support for Mobile Wallets
From Google Pay to Apple Pay, Shopify Credit supports various mobile wallets, allowing you to add a digital, more secure, version of the credit card to your phone. Just click and pay to receive the same perks and rewards.
You Get All the Visa Perks
In addition to its rewards, Shopify Credit extends all the Visa Perks you’d expect from any Visa business card.
Here’s what to expect:
Extended Purchase Protection – More Bang for Your Buck
You know that feeling when something you bought gets damaged or stolen? With Shopify Credit and Visa®, you get extra love. They’ve got your back for the first 90 days, whether your stuff gets stolen or decides to take a tumble.
Visa® Zero Liability – Shopping without the Stress
Worried about shady charges? Visa® has your back. With their zero liability feature, your transactions are covered against any suspicious moves.
Lost or Stolen Card? No Sweat.
Misplaced your card? It's not the end of the world. With Shopify Credit and Visa®, you’re covered. Let them know, and they'll sort you out with a new card or even a quick cash fix.
Car Rentals?
Planning a getaway with wheels? Thanks to Shopify Credit and Visa®, your rental is about to get an upgrade. They’ve got a collision and damage waiver that takes care of the nitty-gritty – from dings to tows, they’ve got you cruising without the worries.
Travel and Emergency Help, Anytime, Anywhere
When you’re on the move, sometimes you need a hand. Shopify Credit and Visa® have your back with a 24/7 call center. Get medical aid, legal tips, and even a helping hand with emergencies.
ID Navigator
Worried about digital villains messing with your identity? Visa® brings in the ID Navigator, powered by NortonLifeLock™. It’s like your trusty sidekick that alerts you about identity threats and stands strong by your side to sort things out.
Finally, Shopify Credit's compatibility with Visa® cards should be noted, facilitating payments at a substantial number of U.S. retailers and global establishments.
So, there you have it – Shopify Credit has the Visa Perks you’d expect from just about any Visa Business card. They’re pretty cool if you use them, but often just serve as extra marketing content for Visa/Shopify to gain more credit card users. Having said that, we’re always fond of extended purchase protection for business assets, and the rental car protection—considering many ecommerce merchants will be doing some traveling.
A Limited Time Welcome Bonus
Although this bonus won’t last long, it’s worth mentioning as a reward for merchants who get in on the Shopify Credit card early.
Here’s the welcome reward:
- Up to $2,000 Shop Cash offers credit.
- This happens when you convert new buyers on the Shop app—by using the Shop Cash Offers feature.
- You start earning the bonus after spending $5,000 in the first 3 months of having your Shopify Credit card.
So, you won’t earn any bonuses until you hit that mark. In fact, you can only begin earning after that $5,000 mark. You must spend up to $20,000 in the first 3 months to achieve the maximum of $2,000 in credits.
The Spending, Payment, and Reward Process
With all that said, it’s often easier to break down a credit card into steps. That way, you’ll understand how spending works, how much time you have to pay expenses back, and when rewards hit your account.
Here's a step-by-step breakdown:
Step 1: Spend on Your Business
- Set Shopify Credit as your default payment method across your business transactions, both on Shopify and other platforms where you conduct business-related purchases.
- Utilize Shopify Credit for your business expenditures, accumulating spending from various essential categories.
Step 2: Make Monthly Payments
- Leverage the flexibility of Shopify Credit by benefiting from an extended payment window of up to 56 days.
- Settle your purchases completely within this timeframe, free from the burden of late fees or interest charges.
Step 3: Earn Cashback Rewards
- Witness the tangible rewards of your business spending accumulate over time.
- Experience the satisfaction of these cashback rewards as they materialize in the form of statement credits, enriching your financial stance on a monthly basis.
The Shopify Credit Application Process
Shopify Credit is reserved for a specific group of pre-qualified Shopify merchants within the United States. Fortunately, the application process is streamlined and prompt, with most pre-qualified merchants receiving a decision within mere minutes.
Upon receiving approval, instant access to your designated credit line is granted, and you're equipped with a virtual card that's at your disposal immediately. Additionally, if your business transactions call for a tangible card, a physical one can be requested. This card will be dispatched via mail, reaching your doorstep within 5 to 7 business days.
Curious about your eligibility? To check your suitability for applying for Shopify Credit, simply log in to your Shopify admin panel. You can also check your eligibility on the Shopify website.
Frequently Asked Questions (FAQ)
Still have questions about Shopify Credit? Below, we cover the most common concerns:
Q1: Who is eligible for Shopify Credit?
Shopify Credit is available to eligible merchants within the United States who meet certain criteria. The eligibility requirements are designed to cater to a wide range of businesses, from startups to established enterprises. But Shopify mainly looks at business performance when accepting applicants.
Q2: How can I apply for Shopify Credit?
Applying for Shopify Credit is simple. Simply log in to your Shopify dashboard, navigate to the Shopify Capital section, and follow the prompts to initiate the application process. Your eligibility will be assessed, and you'll receive further instructions.
Is Shopify Credit Right for Your Business?
Shopify Credit opens a world of possibilities for merchants, offering a suite of features designed to elevate your business.
From flexible funding options and competitive rates to a streamlined application process and transparent repayment terms, Shopify Credit empowers you to invest in your business's growth without unnecessary hassle.
With that said, please let us know if you’ve applied, or plan to apply for the Shopify Credit card. Also, share your questions or thoughts in the comments section below!
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