Getting your first business credit card is beneficial because it often comes with a higher credit limit than a personal credit card. Business cards also come with better rewards; you can make the same purchases you normally would for your business and earn more points. Businesses can also distribute credit cards to employees as expense accounts. All eligible spending on an employee’s business card earns rewards toward your account.
5 Steps for Getting Your First Business Credit Card
Check your credit, because most issuers will decide about your application partly based on your personal credit score
Keep in mind that even a side hustle or freelancing makes you eligible for a small business credit card
Find the business credit card that best suits your needs. Maybe you want travel rewards, or rewards you can redeem for business related purchases like office supplies. Weigh your options, but also your needs. By having higher credit limits, rewards business cards could be very lucrative
Pay attention to the requirements and apply for the business card of your choice
Be responsible by always paying your bills on time and possibly in full
Another great advice about business credit cards is to try to use them for business expenses only. It’s best to keep personal and business spending separate.Whatever your needs may be, you have plenty of good business cards to choose from.
To get a business credit card, you must provide your Tax ID Number (TIN) or Employer ID Number (EIN) along with your Social Security number on the business credit card application. To qualify, a business credit card applicant must also be an owner, officer or partner of a business, which may include sole proprietorships, independent contractors and non-profits, in addition to corporations, partnerships and LLCs. Then, if you get approved for a business credit card, your card will list your company’s name in addition to your own.… read full answer
Other than those things, the process of getting a business credit card is pretty much the same as applying and getting approved for a credit card for personal use. For instance, the issuer will still check your personal credit history when you apply for a business credit card, and you’ll be held personally liable for any unpaid balance. With that in mind, it’s also worth noting that there’s no rule against using a consumer credit card for business spending, so getting any credit card could count as getting a credit card for your business.
Below, we’ll you guide you through how to get a business credit card, step by step, then highlight the various requirements that small business owners typically have to meet in order to get a credit card in their business’s name.
How to Get a Business Credit Card
Own or operate a business. Most major credit card issuers have broad definitions of what constitutes a “business.” Owners of traditional businesses obviously count, like LLCs, non-profits, corporations, and so on. Independent contractors and freelancers can also qualify for business credit cards from some issuers. Even sellers on eBay, Airbnb hosts, etc., may be able to get one. Essentially, if you provide goods or services and make income from them, you could qualify for a business credit card. If you’re one of these non-traditional “business owners,” you’ll list “sole proprietorship” under business type on your application.
Check your personal credit score. Your personal credit standing is much more important to your business credit card approval odds than your business’s credit standing. Checking your credit score for free is an easy way to get a sense of what business credit cards you’re likely to qualify for, allowing you to focus on relevant offers.
Determine whether you need cards for employees. Business credit cards typically allow you to add more authorized users than consumer cards. You can also customize spending privileges for each employee.
Choose between rewards and 0% rates. Rewards are best when you always pay in full, and you can find great rewards deals from both business and consumer credit cards. But if you want a card for financing purposes, get a consumer card with a 0% rate, as consumer cards have more predictable regular APRs than business credit cards.
Compare cards based on your intended usage. Calculating how much each credit card offer will save or cost you in terms of your business’s spending and payment plans is the best way to find the right card.
Apply for the best credit card for your business. You can apply for a business credit card online and, in some cases, by phone, by mail or in person.
Those are the basic steps for finding and applying for the right business credit card. But it’s not always that easy to actually get approved. Below, we’ll cover the biggest requirements you’ll likely need to meet in order to get approved for whichever business credit card you decide to apply for.
Business Credit Card Requirements: What You Need to Qualify
The most important business credit card requirements are a good credit score and a low debt-to-income ratio. These are the requirements weighed most heavily by business credit card issuers. Your personal credit score lets them know how you’ve handled your finances in the past, and your personal debt-to-income ratio lets them know how able you’ll be to pay off what you borrow each month.
When it comes to determining whether or not to approve you for a business credit card, issuers want to feel confident that you’ll be able to pay your bill each month. Personal financial records are the best way to judge that because they usually go back much further than business records, and business credit card owners are personally liable for balances, anyway. That helps to explain some of the boxes you’ll need to check in order to qualify for business credit card approval.
Business Credit Card Requirements:
Owner, officer or partner of a business, which may include sole proprietorships, independent contractors and non-profits, in addition to corporations, partnerships and LLCs.
Employer Identification Number (EIN) - assigned by the IRS when you register your business. If you’re a sole proprietor who doesn’t have an EIN, you’ll just fill in your SSN.
18+ years old
Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN)
Ability to make monthly bill payments
In addition to these requirements, there’ll be other information you should have on hand. You’ll need to provide your annual income, which will help the issuer determine your debt-to-income ratio. On top of that, you’ll need to list business information such as the number of employees you have, how long you’ve been in business, your annual business revenue, and your business contact information. Even if you’re a one-man startup operation that hasn’t opened yet, you’ll still need to provide all of that information.
If you haven’t made any business revenue, be honest about it. Trying to stretch the truth on any kind of credit card application is not a good idea. There are plenty of business credit card options out there for new businesses, so don’t worry.
Once you’ve covered the above requirements, you’re just about ready to apply for a business credit card. Just remember that each issuer has its own specific standards. So make sure to read your chosen card’s terms and conditions before submitting an application.
A first business credit card is beneficial not only because it allows you to separate your personal and business expenses. A business card often comes with a higher credit limit than a personal credit card. In most cases, activity on your business card won’t affect your personal credit report. However, you’re still personally liable for any debt incurred on a business credit card.
Business cards also come with better rewards. You can make the same purchases you normally would for your business and earn more points. Businesses can also distribute credit cards to employees as expense accounts. All eligible spending on an employee’s business card earns rewards toward your account.
Many good first business cards require good or excellent credit to qualify. However, your personal credit profile will a major factor in determining if you’re ultimately approved for a business credit card.
One glaring difference between business cards and personal credit cards is that business cards are excluded from protections under the Credit CARD Act of 2009. Most notably, an issuer can arbitrarily raise the interest rate on a business card balance. For personal credit cards, payment has to be at least 60 days before a higher interest rate kicks in. Fortunately, many of the major issuers have implemented some of the CARD ACT’s key provisions for their business cards.
The easiest business credit card to get is the Wells Fargo Business Secured Credit Card because it accepts applicants with bad credit. The Wells Fargo Business Secured Credit Card also has a $0 annual fee and rewards cardholders with 1.5% cash back on all purchases. A minimum security deposit of $500 is required, though.… read full answer
In general, the easiest credit cards for a business to get require bad-to-fair credit for approval. It’s also worth noting that while you must have a business to get most of these cards, your personal credit history matters a lot more than your company’s credit standing.
As you can see, there are a few easy approval business credit cards available, so you shouldn’t let limited or damaged credit prevent you from getting the card your business needs. And remember, if you pay your bills on time and keep your credit utilization ratio low, your credit should steadily improve over time.
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