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No matter the size of your business, applying for a business credit card is always a good idea. With a business credit card, you can build up your business’s financial history, mitigate cash flow issues, delegate spending to your employees, keep your personal and business finances separate, and much more.
And with the right card, you can earn rewards—like redeemable points, cash back, and even free hotel stays—that will help you run your business smoothly.
But even a simple online search into business credit cards can yield overwhelming results. Not only are there tons of cards on the market, but each one comes with a lengthy description of its terms and benefits. And once you do narrow down your choices, there’s the application process to consider.
We’ve broken down this daunting process. If you keep these factors in mind, you’ll feel confident applying for a business credit card that will best suit your needs.
Wondering how to apply to a business credit card? Like with any financial product, the absolute first step to follow is shopping around your options.
The small business credit card market has really expanded—meaning there are more options available to more business owners than ever.
Here are some things to keep in mind before applying for a business credit card.
When faced with a huge selection of credit cards, ask yourself this: Which of these cards solves the problems my business is facing? Is it cash flow? High travel costs? Limited credit history?
The easiest way to answer that question is to investigate each credit card’s common features: They’re the tools that can help fix your problem or the drawbacks that exacerbate them.
These features include:
What do these features really mean? Let’s take a closer look.
What’s a 0% intro APR period? Think of it as a zero-interest loan. This grace period lets you roll over your credit card debt from month to month, with no added interest, for a set amount of time after you sign up for the card. That introductory period generally ranges from nine to 12 months, with a few exceptions.
The American Express Blue Business Card Plus, for instance, offers a 12-month introductory period. After your 12 interest-free months are up, a variable APR sets in at a rate depending on your creditworthiness. This rate will also vary with the market, so check the issuer’s terms and conditions for the latest APR information.
This type of card is a great option for business owners hoping to build their business’s credit score. If you don’t need to worry about paying an additional interest within your first few months with the card, then you’ll likely be using that card often and responsibly. And, most importantly, you’ll be paying your credit card bills on time (right?!)—all surefire methods to help you build your credit score.
But keep in mind, with a 0% APR card, you need to be sure you can pay off your balance during that introductory period. If not, your balance will carry over, and it’ll gain interest based on the APR indicated when you signed up for the card.
An annual fee is exactly what it sounds like: an extra fee that the card issuer charges to you, per year, to account for the card’s rewards and benefits. That means that cards with more rewards tend to have higher annual fees.
If your ideal card offers awesome benefits that pertain to your business needs, it might be worth shelling out those extra bucks every year. Take the Chase Ink Business Preferred Credit Card. It has a $95 annual fee, but it has no foreign transaction fees, and employee cards come at no extra cost. Plus, your points never expire, and you can redeem them for a slew of perks—like travel, cash back, and gift cards. So if you travel often, plan on doling out extra cards to your employees, and if you want extra cash, you might consider paying that extra $95 each year.
But if you’re not looking to spend extra money, there are lots of no-fee business credit cards that come with great benefits. The American Express Blue Business Plus Credit Card, for instance, features a 12-month APR, to be exact. Plus, you can earn double points on essential business purchases like office supplies.
The perks are what make business credit cards so exciting. But it’s worth considering what kind of rewards you’d like to earn. Do you want to earn in the form of points, cash back, or miles? That, too, depends on what extra benefits your business could use the most.
And would you prefer to earn flat-rate or tiered rewards? Flat-rate rewards offer you the same amount of points regardless of what category you spend on. They’re the most common type of reward offered among credit card issuers because they’re fairly straightforward. Tiered rewards offer higher percentages for bigger spenders, or for spending in a certain category, such as gas, groceries, department stores, or even Amazon purchases. So if you go for a tiered rewards credit card, consider what type of product you spend the most money on, and which you can then earn the most rewards for.
The standard rate for foreign transaction fees is 3%. So every time you purchase something overseas—a client pasta dinner in Italy, a celebratory bottle of wine in France, a packet of aspirin in Spain—you’re tacking on an extra 3% of the item’s cost. If you travel abroad often, that small number adds up fast.
But you don’t necessarily need to be abroad to be privy to your card’s foreign transaction fee. It might also be incurred if you buy a product online from a foreign retailer, or if your purchase is routed through a non-domestic bank.
Most credit card issuers charge a foreign transaction fee—but not all. If you’re a frequent flier or buy a lot of products from foreign companies, take a look at these business credit cards with no foreign transaction fees, for starters, Capital One has done away with these fees. Or consider the best business travel credit cards, most of which have no foreign transaction fees and whose rewards are specific to travel—think earning points on all travel-related purchases (rental cars, plane tickets, hotel rooms), redeemable miles, and free hotel stays.
When it comes to money, extra is a word you want to hear. With a signup bonus, you get extra points, rewards, miles, or cash back if you spend a certain amount of money within the first few months of buying your card.
Read the fine print to see exactly how much money you’ll need to spend—and on which types of purchases—to access a card’s introductory bonuses.
The next step in how to apply for a business credit card? Knowing where your credit score stands. One of the factors in determining what kind of business credit card you should apply for is knowing what you might qualify for. Like any lending product, the best cards are available to borrowers with strong credit scores.
Every credit card application requires a minimum credit score. If your score isn’t up to snuff for a particular card, your application won’t be considered. If your credit score is healthy, you’ll have many more card options to consider.
If your credit score isn’t as robust as you’d like it to be—or if you’re a brand-new business with no credit history—don’t fear! You still have options.
Have bad credit? Then try a secured credit card. This kind of card requires a cash collateral, so you’ll need to put down a couple hundred dollars to acquire one. Then the issuer determines your credit limit. Depending on the type of card, that credit limit might be the same number as your cash deposit.
If your credit history is limited, you’ll have a few conventional business credit card options. The Capital One Spark Classic for Business, for example, only requires a minimum credit score of 550.
Have no credit history? That’s not unusual for business credit card applicants since one of the benefits of using a credit card is to build or boost your credit score. In that case, look for a card with a generous signup bonus. When you’re building your business, you’re likely to spend more money quickly—which means you’re likely to hit the required amount of money to access those bonuses.
The same thing goes for rewards. If you sign up for a card that rewards office-supply purchases, for instance, then that might be a good option when you open your brand-new brick-and-mortar store.
When you’re applying for a business credit card, you first need to consider which card works best for you.
But you probably want to know what, exactly, the card issuer wants so that you can actually successfully apply for a business credit card and get it. It is an application, after all!
This information shouldn’t be surprising, but it never hurts to have everything prepared beforehand.
When you apply for a business credit card, the issuer will ask you for the following information:
Then, you’ll need to provide some extra information as the owner of the business:
On your business credit card application, you might be asked to sign a personal guarantee.
To reiterate: Credit card companies want to know that you, as the applicant and business owner, will reliably pay your bills on time. And if your business goes under, creditors want to know that you will personally pay off your business’s debts. When you sign off on the company’s personal guarantee, you’re legally enabling the issuer to seize your personal assets in case of business failure.
Different card issuers might have different personal guarantees. For example, a combined liability means that debt is incumbent on the company and all card holders. Corporate liability means that the business is responsible for debt.
Here again, it’s worth it to read the fine print. If the worst-case scenario arises, you’ll know what to expect.
Once you get your business credit card application in, it shouldn’t take too long to hear back if you’re approved. In fact, most online applications will tell you within seconds if you’ve been approved for the card. Upon approval, you should also get a notice of when you should expect your business credit card in the mail.
If things didn’t go as well and you find out you were denied for a business credit card, be sure to review the denial reason the issuer tells you. If it’s something impacting your credit score, you’ll want to improve that to better your chances for approval in the future.
This may seem obvious, but take care to fill out your application accurately. If you ever need to apply for a business loan, lenders might not be able to pull your credit score due to clerical errors. So make sure to use your business address on your application for a business credit card, not your personal address. Make sure that the address on your tax return matches the address on your credit card information. And always double-check your work. Count the zeros and be sure that revenue number is correct!
Applying for a business credit card is simple when you know what to expect from the process. First, consider your business’s needs. Then, know which card features to pay special attention to, and choose the card whose features will best suit your requirements. Finally, have all your information prepared for the application. With these four steps, you’ll be sure to find the card that works the best for your business.
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