How to Get a Business Credit Card: The Ultimate Guide

Updated on November 19, 2020
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how to get a business credit card

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. Plus, 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.

This being said, however, 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 on top of this, there’s the application process to consider. Therefore, if you’re wondering exactly how to get a business credit card, you’re not the only one.

Luckily, we’re here to help. In this guide, we’ll break down why you should apply for a business credit card, the different business credit card requirements you should be aware of, and finally, we’ll explain how to get a business credit card—taking the process step-by-step. Ultimately, we’ll cover everything you need to know to find and get the right credit card for your business.

In This Article

Why Apply for a Business Credit Card?

Before we dive into the details of how to get a business credit card, let’s start with the basics: Why should you apply for a business credit card at all?

If you have a very small business, like a sole proprietorship, you might feel like a business credit card is unnecessary—after all, you have a personal credit card, so you may be wondering if it’s realistically worth all the effort to learn all of the business credit card requirements and actually complete an application.

Well, we’ll be the first to tell you that the answer is yes—it absolutely is worth your time and effort to get a dedicated business credit card. Regardless of the age, size, or type of business you have, getting a business credit card is not only beneficial but an essential step in the financial progression of your company.

Let’s explain some of the reasons why:

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

First and foremost, 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.

In fact, creating a separation between your business and personal finances is one of the first actions you’ll want to take when you start your business—for both organizational and legal reasons. Separating these finances will not only make things easier come tax season, but it will also protect your personal finances from any potential legal trouble that arises with your business. Plus, if you’re an LLC or a corporation, you’ll need“corporate veil” between you and your business, in order to legally protect yourself from becoming personally liable for your company’s debt or any legal issues that might arise from a lawsuit.

This being said, applying for and getting a business credit card is a great way to establish this separation—after first signing up for a business bank account, of course.

You’ll build your business credit.

In addition to separating your business and personal finances, getting a business credit card will also be an important step in building your business credit. Unlike your personal credit history, your business credit will be tied directly to your EIN and the spending and payments your business makes—which can include spending with a business credit card.

In fact, there are even business credit cards designed specifically for new businesses that can help you establish your credit. Why is business credit so important? Like your personal credit score, your business credit score is used to illustrate your trustworthiness as a borrower.

Therefore, if you’re ever in the market for business financing, your business credit history will be one of the most important factors considered 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.

This being said, then, 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—you can use a business credit card to do just that—putting yourself in the best place possible for future financial success.

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

Along these lines, on top of helping you build your credit, getting a business credit card also grants you access to working capital. Once again, this can be particularly useful if you’re a new business, as you likely won’t qualify for a loan or other similar financing products. Plus, with a loan, you would face a lengthy application process and potentially high-interest rates.

Although some business credit cards have high-interest rates, if you pay down your 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.

Therefore, by going through the straightforward process to apply for a business credit card online or in-person, you’ll have relatively instant access to a revolving line of credit—giving you the opportunity to use the funds you need to start growing your operations.

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

Finally, an added incentive for getting and 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, some credit cards even offer a welcome bonus when you sign up and fulfill the necessary qualifications.

Moreover, you might also have the opportunity to take advantage of additional perks like travel accident insurance, extended warranties on certain purchases, and even early access to tickets for major entertainment and sports events. With a business credit card, therefore, you’ll not only be separating your finances and improving your credit, but you’ll also have the potential to earn more for your business while you spend.

Business Credit Card Requirements

So, now that we have a better sense of why you should get a business credit card, let’s continue by discussing the requirements involved to actually apply for a business credit card. After all, if you’re aware of the business credit card requirements and prepare them before you start an application, you’ll save yourself in both time and hassle.

First, if you’re wondering what types of businesses are eligible for business credit cards, the answer is many types. Essentially, if you sell items or services for a profit—and have a reason for needing a business credit card, such as purchasing materials—you have a shot at qualifying for a business credit card. 

This being said, then, let’s break down 11 of the most common business credit card requirements you’ll need to know to complete an application. As you might imagine, some of these business credit card requirements are more straightforward than others, and the creditor will weigh some of these factors more heavily than others to determine your eligibility. Nevertheless, depending on the specific card and application process, you’ll likely need some, if not all of the following:

1. Your Business’s Legal Name

When you’re applying for a business credit card, some of the requirements will be as simple as providing basic information about you and your company—which includes your business’s legal name.

If your business is set up as a C-corp, S-corp, LLC, or limited partnership, then you’ll provide the name under which you registered your business with the state. If you’re a general partnership or sole proprietorship, on the other hand, then you can just provide your own legal name.

2. Contact Information for Your Business

Next, you’ll need to provide your business’s mailing address and phone number. If you work from home, you can list your home address.

3. Industry Type

You’ll probably have to choose an industry from a drop-down menu or tick a box, so you’ll want to choose the industry that most closely applies to your business.

4. Business Entity or Legal Structure

A business credit card application will ask you to indicate your entity type—either a corporation, partnership, nonprofit, LLC, government, or sole proprietorship. If you’re applying for a business credit card as a freelancer and haven’t registered your business with the state, then you’ll choose sole proprietorship.  

This being said, if you’re registered as a corporation or partnership, you may be asked whether your business has beneficial owners. Beneficial owners are individuals, other than yourself, who own at least 25% of your company, either directly or indirectly. To clarify, “indirect ownership” means owning equity in a business through another business. For example, if you own 100% of Company A, which owns 25% of Company B, then you’re an indirect owner of Company B.

If you do have beneficial owners who own at least 25% of your company, then you’ll be prompted to provide some basic information on those individuals—this information may include their name, home address, date of birth, social security number, and percent of ownership.

If you’re wondering why this information is part of business credit requirements, it was recently initiated as part of the Customer Due Diligence Requirements for Financial Institutions. This federal mandate aims to guard against criminal financial transactions, such as money laundering, by verifying the identities of registered corporations’ owners.

 5. Time in Business and Number of Employees

If you’re a new startup, just choose the lowest option available in your application’s time in business field. In terms of the number of employees, if you don’t manage any employees other than yourself, you’ll want to just list one employee.

6. Federal Tax ID

Your Federal Tax ID, otherwise known as your EIN (employer identification number), is the nine-digit number the IRS assigns registered businesses. A credit card issuer will use your EIN to verify your business. If you’re a sole proprietorship without an EIN, you can list your social security number in this field instead.

7. Annual Business Revenue and Estimated Monthly Spend

With these basic business credit requirements out of the way, you’ll be ready to prepare some of the more involved information you’ll need to complete an application. This being said, then, you’ll need to report your annual business revenue and estimated monthly spend on the card.

Essentially, the card issuer wants to know that you’ll spend responsibly and that your revenue can handle monthly credit card payments. Additionally, a card issuer will likely use your revenue, as well as estimated monthly spend to determine the size of your credit line.

Generally, the larger your annual business revenue, the more likely you are to have your business credit card application approved—the card issuer figures that the more money you have coming in, the less likely you are to fall behind on your bills, and therefore, you pose less of a risk.

If you’re looking for a business credit card for your startup, and don’t have any revenue to report, the card issuer will consider your personal annual income instead.

8. Total Annual Income

As we just mentioned, your business doesn’t need to be your primary stream of income for a card issuer to approve your business credit card application. In fact, it’s pretty common for brand-new business owners and entrepreneurs with little capital to their name to apply for, and be approved for, business credit cards—especially since responsibly using a business credit card is such a reliable way to build your business’s financial profile.

Ultimately, then, card issuers are interested in your total annual revenue for two key reasons:

  1. They need to know that you have the funds necessary to repay them, and
  2. They need to determine your debt-to-income ratio.

These two business credit card requirements are important factors by which creditors determine whether or not to approve your application. 

This being said, then, when reporting your total annual income, you can include whatever income you reap from your business, whether or not that business makes up the bulk of your income. In fact, you’ll want to add up any and all streams of personal (full-time and part-time jobs) and business income to generate that final number. Again, the card issuer just needs to know that you have access to substantial enough funds to repay your debt.

Moreover, an amendment to the 2009 CARD Act also allows the inclusion of your spouse’s income in your calculations, as long as you truly expect to have access to their money.[1]

9. Legal Name, Contact Information, and Social Security Number

Along these lines, regardless of the type of business you have and the specifics of your operations, a credit card issuer will use your personal information to judge your application. Therefore, you’ll need to provide your legal name, contact information, and social security number.

The card issuer will use your legal name and social security number to check your personal credit score—which, more often than not, is actually the most important business credit card requirement.

10. Personal Credit History

Perhaps one of the most important business credit card requirements is your personal credit history, which includes your personal credit score. The card issuer will use the information mentioned above—your name and social security number—to perform a credit check. Within this credit check, an issuer will review your credit score and current debts, and they’ll use your annual income to determine your debt-to-income ratio—in other words, how much your debt payments are compared to your income.

Although you won’t actually fill in this information on an application, it’s nevertheless worth discussing why it’s so significant and how a credit card issuer will use it.

Essentially, an issuer will use your personal credit history to determine your reliability as a borrower. Therefore, major red flags, like tax liens, bankruptcies, collections, and judgments, could disqualify you from being approved for a business credit card. On the other hand, if you’re reliably paying your bills in full and on time, keeping your credit utilization ratio low, have a low debt-to-income ratio, and have a clean financial history, you’ll have a much better shot at being approved for the business credit card you want.

Additionally, it’s important to note that when you apply for a business credit card, the card issuer will perform a hard credit pull to check your personal credit history. Comparing soft pulls vs. hard pulls, hard pulls cause a temporary dip in your credit score. Usually, you’ll only experience a minor dip (typically fewer than five points), but because of this, you’ll want to avoid applying for too many business credit cards all at once to keep that credit risk down.

Ultimately, if you’ve been in business for a few years, your personal information won’t be as weighty in your business credit card application. However, if you’re a startup and you’ve just registered your business, credit card companies will weigh your personal financials a little more heavily in their decision to extend credit to your business.

11. Personal Guarantee

Typically, most business credit cards will require a personal guarantee with your application. A personal guarantee will state that the card issuer holds you personally, financially responsible if the primary payer—which most likely means your business—fails to repay their credit card bills. You’ll usually find a personal guarantee clause in the fine print of your card’s agreement terms and conditions.

This being said, then, if you’re required to agree to a personal guarantee, the only way to ensure that your personal finances are protected is to pay your bills on time and in full every month. If, however, this personal liability worries you, there are ways to get a business credit card without a personal guarantee.

Generally, if you’re looking to avoid a personal guarantee, your best bet is to get your credit card through a bank with whom you have an existing relationship. If your bank has hard evidence on hand of your reliability, based on your past transactions with them, they might be more likely to waive your personal guarantee.

How to Get a Business Credit Card: A Step-by-Step Guide

Luckily, a huge part of figuring out how to get a business credit card is understanding the business credit card requirements listed above—and therefore, once you’ve done that, you’ve handled a significant part of the application process already. With this in mind, then, let’s break down the actual steps necessary to apply for a business credit card:

Step 1. Decide which business credit card is right for you.

There are a variety of options for business credit cards on the market, so before you can actually apply for a business credit card, you’ll need to explore your different options to determine which card is best for your business.

How do you know which business credit card is right for you?

Ultimately, the right credit card for your business will be one that you think you’ll qualify for, that has the features and rewards you’re looking for, and that will help you achieve your financial goals.

With this in mind, here are some features to keep in mind as you sort through your choices:

0% Intro APR Period

If you’re looking to build your business credit score, a 0% intro APR business credit card is a great option. With a 0% intro APR period, you’ll be able to 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. Typically, this introductory period generally ranges from nine to 12 months.

The American Express Blue Business Card Plus 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 you’ll want to be sure to check the issuer’s terms and conditions for the latest APR information.

It’s also important to remember that after the 0% APR period, you’ll need to be sure you can pay off your balance—if you can’t, your balance will carry over and it will begin to accrue interest based on the variable APR.

This being said, although it’s best practice to pay 100% of your credit card bill every month, if you want the option of carrying a monthly balance for a specific amount of time—perhaps to pay down a large purchase—it’s worth looking into the different business credit cards that offer a 0% intro APR.

Annual Fee

As you consider various business credit cards, it’s always important to look at the annual fee.

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. Typically, this means that cards with more rewards tend to have higher annual fees.

This being said, however, if your ideal card offers awesome benefits that pertain to your business needs, it might be worth paying an annual fee every year. For example, you might consider 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, the rewards points you earn never expire, and you can redeem them for a variety of perks—like travel, cash back, and gift cards.

Therefore, if you travel often, plan on getting employee cards, and want extra perks, it might be worth paying a $95 annual fee. On the other hand, if you’d prefer to have a business credit card with no annual fee, there are many options as well—including cards with great benefits. In fact, the AmEx Blue Business Plus card we discussed above has no annual fee, in addition to the 12-month 0% intro APR period, as well as 2x reward points for every dollar you spend on your first $50,000 in purchases annually.

Rewards Program

As we mentioned earlier, one of the benefits of getting a business credit card is the different rewards you can earn. Therefore, in searching for the right credit card for your business, you’ll want to consider what kind of rewards each card can offer—as well as what type of rewards you would prefer.

Would you prefer rewards in the form of points, straight cash back, or miles? Similarly, 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 in. These are the most common type of reward offered among credit card issuers because they’re fairly straightforward.

On the other hand, tiered rewards offer higher reward percentages for big spending, or for spending in a certain category, such as gas, groceries, department stores, or even Amazon purchases. Ultimately, the best business rewards credit card for you will depend on what benefits your business could use the most, as well as where you do the most spending.

This being said, if you’re looking for a pretty simple way to earn cash back, you might specifically consider the Chase Ink Business Cash® credit card, which earns you 5%, 2%, or 1% cash back depending on where you spend. Qualifying spending channels include office supply stores, internet, cable, and phone services, gas stations, and restaurants, so you’ll be rewarded for a good amount of your basic purchases.

Foreign Transaction Fee

If you travel abroad often, you might pay close attention to the foreign transaction fees associated with different business credit cards.

The standard rate for foreign transaction fees is 3%—so if you’ll be making substantial purchases outside of the U.S., you’ll likely want to look for a business credit card that does not have foreign transaction fees. Plus, it’s important to remember that you don’t necessarily need to be abroad to be charged a foreign transaction fee on your credit card. You might also incur this fee if you buy a product online from a foreign retailer, or if your purchase is routed through a non-domestic bank.

This being said, although most issuers charge foreign transaction fees, there are some exceptions—Capital One, for example, has eliminated these fees. Additionally, many business travel credit cards offer no foreign transaction fees as well as travel-specific rewards like earning points on all travel-related purchases (rental cars, plane tickets, hotel rooms), redeemable miles, and free hotel stays.

If this sounds like the type of card that might work best for your business, then you might consider the Capital One Spark Miles for Business card, which offers a solid, flat-rate rewards program and a generous sign-up bonus.

Introduction Bonus

Another feature you might take into consideration as you search for the right business credit card is the welcome or signup bonus.

With a business credit card that offers a welcome bonus, you’ll get extra points, rewards, miles, or cash back if you spend a certain amount of money within the first few months of using your card.

Although not all business credit cards include this type of perk, it might be particularly worth exploring the ones that do if you plan on making substantial purchases within your first few months with the card—this way, you’ll be truly maximizing your spending. The Chase Ink Business Unlimited® card, for example, offers a $750 welcome cash back bonus if you spend $7,500 in the first three months.

When it comes to signup bonus credit cards, however, you’ll want to be sure to read the fine print to see exactly how much money you’ll need to spend—and on which types of purchases—to make sure that you’ll actually be able to access the offer.

Business Credit Card vs. Charge Card

Finally, the last feature you might consider before applying for a business credit card is whether you might consider a charge card over a credit card. The major difference between a charge card and a credit card is basically that credit cards have a preset, monthly spending limit—charge cards, on the other hand, are more flexible.

Therefore, unlike a credit card, with 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 based on your financials and your payment history.

Additionally, with a charge card 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 huge impact on your credit score.

This being said, then, a charge card is really only preferable for businesses that have their financials and credit score in good standing and that want to pay for large purchases. If you’re considering a charge card, you’ll need to be absolutely certain you can pay your monthly bill on time, all the time. You’ll also want to be aware that these cards generally come with an annual fee, and they can be expensive.

 Step 2. Check your credit score.

Once you’ve narrowed down your options based on these features, as well as any others that are important to your business, the next step is to know where your credit score stands. As we’ve explained, one of the most important factors in your business credit card application will be your personal credit score.

Therefore, before you start filling out an application, you’ll want to check your credit score to determine whether or not you’re likely to qualify for the particular card you’re interested in. Every credit card application requires a minimum credit score, so to avoid damage to your credit score (and hopefully rejection) you’ll want to only apply for cards for which you’re in the range of eligibility.

Luckily, there are business credit card options for all credit score ranges—and, 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—you still have some options.

If you have bad credit, you can try a secured business credit card, which requires cash collateral. Similarly, if you have a limited credit history, you might look into a card like the Capital One Spark Classic, which only requires a minimum credit score of 580.

Step 3. Gather the necessary business credit card requirements and fill out an application.

Now for the heart of the matter: how to get a business credit card.

At this point, there’s really not much to it—online applications make it pretty simple to apply for a business credit card. Once you’ve found the right business credit card for you, it’s very likely that you’ll be able to fill out the application online and receive an approval within seconds.

As a reminder, you’ll likely need to provide business credit card requirements we discussed above, but the exact specifics will largely depend on the card you’re applying for.

This being said, although it may seem obvious, you’ll want to take care to fill out your application accurately. If you ever need to apply for a business loan, for example, lenders might not be able to pull your credit score if there are clerical errors on your business credit card application. Therefore, you’ll want to pay close attention to details—like that you’re providing your business address, not your personal address (unless, of course, you work from home) and that your revenue calculation is accurate.

Once you’ve completed all of the business credit card requirements and double-checked your information, you can submit your application.

Step 4. Wait for approval.

Once you get your business credit card application in, it shouldn’t take too long to hear back if you’re approved. As we mentioned, most online applications will tell you almost instantly 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.

On the other hand, if you find out you were denied for a business credit card, you’ll want to review the denial reason provided by the issuer. If you find out that something is negatively impacting your credit score, you’ll want to work to remedy it so that you improve your chances for approval in the future.

Step 5. Activate your business credit card and use it responsibly.

Finally, once you receive your business credit card, you’ll want to activate it as soon as possible. This way, you can start using it—responsibly—to manage your business expenses and improve your business credit.

The credit limit on your card will generally depend on how strong your credit score is, and what you (or your business’s) income is. Sometimes issuers are conservative when extending credit limits at first to make sure that they’ll get their money back.
Regardless of what your credit limit is, you’ll want to be sure that you’re managing your spending properly—spending wisely and paying off your balance on time and in full will put your business in the best place for future financing options.

The Bottom Line

There you have it—your complete guide on how to get a business credit card. At the end of the day, although there are a handful of business credit card requirements involved, the process is relatively simple when you know what to expect.

First, you’ll want to consider your business’s needs. Then, you’ll want to determine which card features you need to pay special attention to and choose the card whose features will best suit your requirements. Finally, you’ll want to have all your information prepared for the application, and of course, remember that your personal credit will likely play an influential role in your approval or rejection.

Once you’ve applied for and received your business credit card, you’ll have taken an important step in managing your finances and hopefully, with responsible credit card spending, improving or establishing your business credit.

Article Sources:

  1. “The CFPB Amends Card Act Rule to Make it Easier for Stay-at-Home Spouses and Partners to Get Credit Cards
Randa Kriss
Senior Staff Writer at Fundera

Randa Kriss

Randa Kriss is a senior staff writer at Fundera.

At Fundera, Randa specializes in reviewing small business products, software, and services. Randa has written hundreds of reviews across a wide swath of business topics including ecommerce, merchant services, accounting, credit cards, bank accounts, loan products, and payroll and human resources solutions. 

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