The Business Credit Card Application Insider’s Guide

Caroline Goldstein

Staff Writer at Fundera
Caroline is a small business and finance writer at Fundera. Before coming to Fundera, she received an MFA in Fiction from New York University. She loves finding creative ways to help entrepreneurs grow.
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When you stop and think about the power of business credit cards, it’s almost bizarre to realize how much a great card can really do for you. After you fill out a business credit card application and get approved, that piece of plastic has the power to build your credit, provide a flexible financial resource, and earn you rewards. It can even provide the foundation for working toward a small business loan.

But, like we just mentioned, there’s that one tiny hurdle—the business credit card application. Just like with any other type of business financing or line of credit, you can’t just snap your fingers and make a business credit card appear. (If you can, let’s talk.)

The great news, though, is that the process for applying for a business credit card online has never been easier. And the business credit card application requires much less paperwork than applying for other types of small business loans. In fact, you can fill out your business credit card application in a matter of minutes—if not seconds. And, sometimes, get your results just as fast.

That’s not to say that you should go into your business credit card application unprepared. (For one thing, you’ll need to know which business credit card to apply for—more on that to come.)

That’s why you’ll need a comprehensive, insider’s guide to the business credit card application process. And that’s what you’ll get. You’ll see exactly why you need a business credit card at all, plus what to expect from the business credit card application process, and how to find the right business credit card for your small business.

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How to Prepare a Business Credit Card Application

If you’ve ever considered a small business loan, you’ll be thrilled to know that a business credit card application is significantly simpler. For the vast majority of applications, you should be prepared to gather documentation about your business, as well as information about the primary cardholder, regardless of how many employee cards you might be issuing from the main account.

Gather this information about the business for the business credit card application:

  1. The business’s legal name
  2. Contact information for your business
  3. Industry type
  4. Company structure (business entity)
  5. Time in business
  6. Number of employees
  7. Annual business revenue
  8. Estimated monthly spend on the card
  9. Federal Tax ID/Employer Identification Number

As the owner of the business and the primary cardholder, supply this additional information to finish out the business credit card application:

  1. Legal name
  2. Contact information
  3. Social Security number
  4. Personal annual income
  5. Personal outstanding debt

A Deeper Look at Business Credit Card Applications

It’s useful to know what a business credit card application looks like. But the thing you really want to know is how you can be sure that your application will be accepted, right?

There are no hard-and-fast rules you can follow that’ll guarantee you’ll be accepted for the credit line you want. Generally, every card issuer will have their own criteria for determining which applicants they’ll accept and which they’ll deny. And they take all of the below information into consideration.

That said, you can be pretty certain that the card issuer will consider this criteria really carefully when you apply for your business credit card.

Annual Revenue and Estimated Monthly Spend

Credit card companies want to know that you’ll spend responsibly, and that your revenue can handle monthly credit card payments. If your business is new and doesn’t yet have strong (or any) revenue—or evidence of financial reliability—then they’ll make that determination based on your personal finances.

Personal Annual Income and Personal Outstanding Debt

This is a big one. Credit card issuers want to take a look at your income-to-debt ratio to further determine how well you’re able to handle your own debt.

It might seem meddlesome for credit card companies to investigate your personal finances. But, as the owner of your small business and the primary cardholder, how well or poorly you manage your personal finances is a good barometer of how you’ll be handling your business’s finances, too. Overall, the lower your debt-to-income ratio, the better.

Federal Tax ID and Legal Structure

Your Federal Tax ID, or Employer Identification Number (EIN), is essentially a Social Security number for your business. The card issuers use your business EIN to access your business’s borrowing history.

You acquire an EIN when you set up your business entity type, whether that’s a sole proprietorship, an LLC, an S-corp, or a C-corp. Among other factors, these legal structures determine how you file and pay your taxes, and to what extent the owner is liable for the business’s financial obligations.    

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Personal Credit History

When you apply for a business credit card, the card issuer will look at your personal credit history. To reiterate: Your credit history is a record of your reliability as a borrower. That holds true regardless of whether you’re applying for a personal credit card card or a business credit card (and most types of small business loans, for that matter). Either way, that record shows the card issuer where you’ve honored your financial commitments and where you’ve made some mistakes along the way.  

Major red flags, like tax liens, bankruptcies, collections, and judgments, could disqualify you from being approved for a business credit card. In addition, credit card companies might take a look at your spending habits on other cards. If you’re dangerously close to your credit limit on those other cards, for instance, that could hurt your chances of being approved for a new one.

But if you’re reliably paying your bills in full and on time, keeping your credit utilization ratio low, and have a clean financial history, you’ll have a much better shot at being approved for the business credit card you want.

Personal Credit Score

For all of the above reasons, your personal credit score is an important consideration when you apply for a business credit card. But, on the most basic level, most business credit cards have a general minimum credit score issuers look for in order to be eligible for that card at all.

Also, be aware that the card issuer will perform a hard credit pull to check your credit report when you apply for a business credit card. Hard pulls vs soft pulls cause a temporary dip in your credit score. It’s a minor ding (usually fewer than five points), but try not to apply for too many business credit cards all at once to keep that credit risk down.

In general, try to avoid the most damaging things you can do to your credit scoreespecially paying your loan bills late, or missing them entirely. That way, you can make sure your score is strong enough to qualify for the business credit card you really want.

And before applying to every business credit card you come across, you’ll want to find out what your credit score is, and only apply for the cards within your credit score range. Those five-point dings can add up!  

→Too Long; Didn’t Read (TL;DR): Important factors that credit card issuers will consider on your application include your business’s financials and legal structure. They’ll likely most heavily consider your personal credit score.   

Why Fill Out a Business Credit Card Application at All?

Even with all that in mind, you have a personal credit card… so, realistically, is it worth the trouble to fill out a business credit card application?

A resounding yes for so many reasons.

We’re actually willing to say that a dedicated business credit card is necessary for all small businesses, no matter the age, size, or type of business you have. You’ll see a very good reason on the list here to get a business credit card if you’re not already convinced you need one. We promise:

1. You’ll get fast and easy access to working capital.

A hefty portion of small business owners get to a point—whether right at the beginning when they’re starting, or down the line when they’re growing—when they need a business loan. And if you need access to a sizeable amount of funds, you might need to apply for a loan like a term loan or an SBA loan. These products all have different requirements—which you might not meet out of the gate if you’re a startup or if you need to rebuild your credit.

If you do qualify, you might still need cash faster than you can get the money into your account. One of the many great things about online lenders is that their eligibility requirements allow more borrowers to qualify for loans, and funds are delivered faster, too. But quick isn’t always instant.

On the other hand, filling out a business credit card application and getting approved if you’re eligible isn’t only faster and easier than the loan process—but you’ll also have instant access to a revolving line of credit once your card is in hand. As long as what you purchase is within the bounds of your credit limit each month, and you know you can repay what you owe, you’re golden.

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2. Credit cards can be less expensive than certain loan products.

Small business loans can be real lifesavers. But, of course, some are more expensive than others.

For instance, short-term loans can especially carry high interest rates, and some even have prepayment penalties. And some short-term loans require daily payments, which can be tough for businesses facing cash-flow issues.

Some business credit cards can also carry high interest rates, but if you pay down your credit card balance every month, or are judicious about the type of credit card you choose, you either won’t be accruing any monthly interest, or you’ll have a card with a lower interest rate than the loan product you would qualify for before you strengthen your profile as a borrower.

3. You’ll earn valuable credit card perks along the way.

An added incentive for using a business credit card is the potential to earn rewards. Depending on the type of card you sign up for, you’ll be able to redeem points and earn miles, cash back, gift cards, and more. Plus, you can take advantage of your business credit card’s hidden perks, like travel accident insurance, extended warranties on certain purchases, and even early access to tickets for major entertainment and sports events.     

4. You’ll keep your business and your personal finances separate.

Using a dedicated business credit card for your business expenses, rather than charging everything to your personal credit card, maintains an important separation between your business’s financials and your personal finances.

Come tax season, disentangling your personal expenses from your business’s expenses is not only an unnecessary annoyance—but if you don’t do it, you can end up in legal hot water down the line. If you’re an LLC or a corporation, you’ll need a “corporate veil” between you and your business, which legally protects you from becoming personally liable for your company’s debt or any legal issues that might arise from a small business lawsuit.

Heads up: It’s worth noting that a business credit card alone won’t do this—you’ll need a business bank account to make things separate for real. You can apply for a business checking account (with a $200 bonus from Chase, too) right here to get the process done and dusted if you’d like!

5. You’ll build your credit.

Your credit score tells the story of your history of borrowing money. And anyone who provides credit or lends money essentially views it as an indication of your trustworthiness as a borrower.

That’s why it’s one of the most important factors that small business loan underwriters consider in your financing application process. If you have a strong credit score, lenders will feel confident loaning you larger amounts of money, and at better rates, because they’ll know you’re responsible enough to repay your debt on time.

If you’re in a position where you need to build or rebuild your credit, the surest way to increase your credit score is to borrow money responsibly, and prove that you can repay it on time and in full, while spending below your credit limit. With a business credit card, you can begin to do that.

Establishing a strong credit score now sets yourself up for future success. When applying for a small business loan is the right move for your business, you’ll be in a better spot to get the best deal possible with the credit score you’ve built up using your business credit card.   

→TL;DR: Business credit cards are essential for small business owners to pay for everyday purchases. They can also help you lay the foundation to work toward a small business loan.

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Applying for the Right Business Credit Card for Your Small Business

We’re positive you have the itch to dive headfirst into a business credit card application. Before you do, though, it’s important to choose the right business credit card for your small business.

And you can use some strategy to do it:

1. Apply to the credit cards that are within your credit score range. Keep in mind that you won’t qualify for some cards if you’re well under the minimum credit score, and if you’re just within range of other cards, you should be choosey. You don’t want to rack up several denies on your credit score, which will drive it down (albeit temporarily).

2. Sort through the perks you’re interested in. Once you’re down to the business credit cards that align with your credit score, take a look at the remaining cards’ features and incentives. How can those features can help you solve your business’s problems? For instance…

  • If you travel often and airfare costs are eating away at your bottom line, you’ll probably want a business travel credit card, so you can get miles and discounts on hotel rooms.
  • If you want an advantage program that you know you’ll benefit from, go for a cash back business credit card that rewards you with extra money on everyday purchases.

3. Think about your financial goals. Maybe most importantly, a business credit card should lay the foundation for your business to grow. Look at cards with an eye toward building credit, lessening your financial burden with lower APRs, etc., to make them work for you.

Here’s what we mean:

If You Need to Build Credit

Here’s a catch-22: In order to be approved for a business credit card, you need to have a strong credit score. But the best way to build your credit score is to use a business credit card. Now what?

The good news is that there are business credit cards for building credit that’ll help you build limited credit history, or rehab your credit history that’s taken some past hits. The Capital One Spark Classic for Business has one of the lowest credit score requirements you’ll find from a major card issuer at 550+.

It also features no annual fee, and you’ll get 1% cash back on every single dollar you spend, with no limit on the amount of cash back you can earn. That’s just an added incentive to use this card (responsibly) so you can build up your credit—and ultimately graduate to a card with even more perks and rewards.

If you can’t swing the Spark Classic’s minimum credit score, consider a secured business credit card instead. Secured business credit cards are backed with a cash deposit collateral, so issuers are more willing to extend these cards to business owners with low or insufficient credit.

If You Know You’ll Carry a Monthly Balance

Paying your credit card debt in full every month is best practice if it’s possible. But if you need to pay for an extra-large purchase, or if your cash flow is unreliable, you might need a little more time to take care of your bills.

In that case, look into a 0% intro APR business credit card. These cards let you roll over your payments from month to month with no added interest for a specified introductory period. Until the variable APR period kicks in, you’re essentially getting a no-interest loan.  

In particular, the American Express Blue Business Plus credit card is one of the best 0% intro APR business credit cards on the market. The Blue Business Plus card carries the longest intro periods on the market at 15 months. After these 15 months, your APR will set in at a rate that will vary with the market prime rate, so be sure to see the issuer’s terms and conditions for the latest APR information.

If You’re a Startup or New Business Just Gearing Up

If your business is still in startup mode, you may have found it difficult to secure financing. Lenders are often wary before extending financing to businesses that don’t have a long credit history, or enough evidence of profitability, to prove that they’re trustworthy borrowers.

But business credit cards are easier for young businesses to qualify for. That’s because some business credit cards don’t require a business credit history at all. Rather, you can use your personal credit history to apply. For extra security, you’ll probably need to provide a personal guarantee. That personal guarantee makes you personally financially liable if you default on your business credit card payments, so you need to be willing to take that risk.   

There are a few business credit cards for new businesses on the market. And they all have the potential to make it a lot easier to get your business off the ground—like providing easy access to flexible capital, rewarding purchases with cash back, and helping new business owners establish strong credit histories.

The SimplyCash Plus Business Credit Card from American Express does all of the above. Among other perks, you’ll get 5%, 3%, or 1% cash back, depending on which category you’re spending in, including office supplies, wireless phone services, and advertising. Plus, this card carries no annual fee.  

If You Want More Spending Power

If your financials and credit score are in pretty good standing, and you want the flexibility to pay for large purchases, you might want to consider a charge card over a credit card. The major difference between a charge card and a credit card, basically, is that credit cards have a preset, monthly spending limit. Charge cards essentially don’t.

When a credit card issuer accepts your application, they’ll assign you a hard credit limit. They determine that cap based on the usual suspects like your credit history, credit score, annual revenue, and outstanding debt. Hit, exceed, or even get too close to that limit, and you’ll max out your credit card.

But if you have a charge card, the card issuer doesn’t give you a specific spending limit at signup, and your max can change from month to month. However, the issuer will still determine an absolute maximum amount you can use on your card. They determine that limit based on your financials and your payment history.

So, you can use your charge card to pay for large purchases without worrying about how it’ll affect you credit utilization ratio. However, you must pay off the full balance on your charge card every month, and you still need to stay within the bounds of your limit. If you don’t, you’ll run the risk of paying hefty penalty fees, getting your card shut down, and seeing a big blow to your credit score.

Only apply for a charge card if you’re absolutely certain you can pay your monthly bill on time, all the time, and if you’re self-disciplined about your spending in general. Also be aware that cards generally come with an annual fee, and they can be pricey.

If that all sounds doable to you, you might want to look into the Business Gold Rewards Card from American Express OPEN. This charge card features a generous welcome offer (which includes waiving the card’s $175 annual fee for the first year), a substantial rewards program, no foreign transaction fees, and, of course, a flexible spending limit.

→TL;DR: To figure out which business credit card to apply for, consider the cards in your credit score range, then the features and perks that can provide you with the financing solutions your small business needs the most.

You’re Ready for the Business Credit Card Application

It’s time to go ahead with your business credit card application. You know what you need—and how to find the right business credit card for you. And applying for a business credit card is the right move for so many reasons!

With a business credit card, you’ll:

  • Have access to a flexible, revolving source of capital, which could be less expensive than a loan
  • Earn perks and rewards that’ll make your life as a small business owner a lot easier
  • Establish a clear separation between your personal and your business’s finances
  • Build a strong credit history, so you’ll be able to get a great deal on a small business loan in the future

On your business credit card application, the credit card issuer will ask you for information about both your business and your personal finances. That’s because, as with any other type of small business loan application, the credit card issuer wants to know that you’re trustworthy as a borrower and that you’ll be able to handle additional debt.

Although business credit card applications are similar no matter what card you apply for, every business credit card has different features that can provide solutions to different problems small business owners face. So, take a look at the business credit cards that fall within your credit score range, and choose the one that best suits your business’s needs. Read the fine print so you know exactly the terms you’re agreeing to, then go ahead and fire off that application.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

Caroline Goldstein

Staff Writer at Fundera
Caroline is a small business and finance writer at Fundera. Before coming to Fundera, she received an MFA in Fiction from New York University. She loves finding creative ways to help entrepreneurs grow.

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