One of the best business credit cards you can get for your new LLC is Capital One Spark Classic for Business, which offers 5% cash back on hotel and rental cars booked through Capital One Travel, as well as 1% cash back on all other purchases. The Capital One Spark Classic card also has a $0 annual fee, and it accepts applicants with limited credit.
In general, the best credit cards you can get for a new LLC are business cards with low fees, good rewards, and business-specific perks like expense tracking tools.
Business credit cards can be assets for LLC owners, as they offer more business-focused benefits and rewards. However, many LLC owners use a personal credit card for business purposes. This is also fine, as long as you keep your business and personal expenses separate.
Yes, you can get a business credit card as a sole proprietor. Partnerships, LLCs, corporations, nonprofit organizations, and sole proprietorships are among the various business entities that qualify for a business credit card. Even if your sole proprietorship is engaged in a part-time freelance gig, you are eligible to apply.
Your personal credit history will play a major role in whether you’ll be approved for a business credit card, so make sure to check your credit score to gauge your odds of approval before you apply. If you are approved for a business credit card, your personal credit profile will also help determine your initial credit limit and the interest rate.
Key Things to Know About Getting a Business Credit Card as a Sole Proprietor
Business credit cards are available to small business owners of all credit levels.
Sole proprietors of any credit level can apply for a business credit card. This includes secured business cards if you have poor credit.
The application requires all the standard personal info such as your address and Social Security number or Tax ID number, but you will also need to include your business name, business type, and annual business-related revenue. If you’ve been a sole proprietor for less than a year, you can enter $0 for annual revenue on the application.
The longer you’ve been in business, the higher your odds of approval will be.
When you apply for a business credit card, issuers will want to know how long you’ve been in business. Established proprietorships pose less of a credit risk than those just starting out.
Sole proprietors are personally liable for any unpaid business credit card charges.
Legally, as far as a credit card’s issuer is concerned, there is no distinction between you personally and your sole proprietorship. Nearly all business credit cards require that you provide a personal guarantee stating that you are liable for any debts your business is unable to pay back.
How a Sole Proprietor Could Benefit from a Business Credit Card
While there’s no rule against a sole proprietor using a personal credit card for business purposes, a business credit card will enable you to track your personal and business expenses on separate accounts. Business credit cards also offer more business-specific rewards and perks than personal cards. And if you use your business credit card responsibly, it may increase your chances of getting approved for future business loans at favorable interest rates.
No, it is not illegal to use a business credit card for personal use. However, there are reasons you may not want to. After all, business credit cards are designed with business owners in mind, so the cards’ rewards and benefits are geared more toward business needs than consumer needs. Using a business credit card for personal expenses can also make things a little harder when it’s time to file your taxes. You cannot deduct any of the personal expenses charged to a business credit card as business purchases. If you do have too many deductions, it’s likely the IRS will get involved, and that can make things very painful.… read full answer
The rewards with business credit cards are also different from what a consumer might need. For instance, many business credit cards reward you most for expenses like office supplies and telecommunication services. Business credit cards often come with other features that aren’t as important for consumers, too. For instance, many business credit cards have very detailed expense tracking and spending reports.
Another reason to avoid using a business credit card for personal use is that business credit cards aren’t covered under the CARD Act. The Credit CARD Act of 2009 introduced a number of regulations to protect consumers from abusive practices by credit card issuers. However, business credit cards were excluded from the CARD Act. This means business credit card users don’t have to be given notice before their interest rates get increased, among other things. While many business credit card issuers have voluntarily extended the CARD Act protections, it’s not a requirement.
To get a business credit card for your LLC, compare offers for cards to determine which business credit card is likely to save your LLC the most money, based on rewards, fees, interest rates and other features. Then, apply for the card online, wait for a decision and, if you’re approved, wait for your card in the mail.… read full answer
You can get a business credit card for an LLC, as long as you are permitted by the corporation. If you aren’t an owner of the LLC, you must at least be an authorized officer – in other words, legally able to sign for the company – in order to apply for a credit card in the LLC’s name. Authorized officers will be named on the LLC’s operating agreement, and can be the LLC’s owner, president, managing member, member, or treasurer, for instance.
When it comes to which business credit cards you might qualify for, a lot depends on your personal credit score. Most small business credit card issuers will judge your application based on your personal creditworthiness because they require a personal guarantee for any balance on the account.
How to Get a Business Credit Card for Your LLC in 4 Steps
Determine which card would be best for you. The ideal business credit card will give you the best value in rewards and benefits, based on your business spending and your overall needs. Narrow down the choices based on rewards rates in your biggest spending categories and other card benefits, and then compare expected earnings after taking any fees into account.
Fill out the application. You’ll need to provide details about the LLC on the application, such as its name, address, phone number, annual income, number of employees, years in business, and Employer Identification Number (EIN). You’ll also need to provide some information about yourself, such as your Social Security number and personal income, among other things.
Wait for a response. You could get a decision instantly, or the card issuer may need a closer look at your application. Most credit card issuers make a decision on applications within 2 weeks, and if you’re approved, your new card should get to you in 7-10 business days after approval. If you get denied for the card, consider calling the card issuer’s reconsideration line or looking into other credit card options.
Business credit cards can be assets for LLC owners, as they tend to offer more business-focused benefits and rewards, with the potential for higher credit limits than personal cards. That said, many LLC owners use a personal credit card for business purposes – and that’s perfectly fine, if you aren’t interested in building business credit and you keep your business and personal expenses separate.
WalletHub Answers is a free service that helps consumers access financial information. Information on WalletHub Answers is provided “as is” and should not be considered financial, legal or investment advice. WalletHub is not a financial advisor, law firm, “lawyer referral service,” or a substitute for a financial advisor, attorney, or law firm. You may want to hire a professional before making any decision. WalletHub does not endorse any particular contributors and cannot guarantee the quality or reliability of any information posted. The helpfulness of a financial advisor's answer is not indicative of future advisor performance.
WalletHub members have a wealth of knowledge to share, and we encourage everyone to do so while respecting our content guidelines. This question was posted by WalletHub. Please keep in mind that editorial and user-generated content on this page is not reviewed or otherwise endorsed by any financial institution. In addition, it is not a financial institution’s responsibility to ensure all posts and questions are answered.
Ad Disclosure: Certain offers that appear on this site originate from paying advertisers, and this will be noted on an offer’s details page using the designation "Sponsored", where applicable. Advertising may impact how and where products appear on this site (including, for example, the order in which they appear). At WalletHub we try to present a wide array of offers, but our offers do not represent all financial services companies or products.