Can Anyone Get a Business Credit Card? 3 Important Qualifications

Brayden McCarthy

Brayden McCarthy is Head of Policy & Advocacy at Fundera. He was previously a presidential appointee in the Obama administration, where he served as Senior Policy Advisor in the West Wing Office of the White House National Economic Council and the U.S. Small Business Administration.
Advertiser Disclosure

From magazines to sponsored social media posts to banner ads on blogs and websites, chances are that, at some point, you’ve run into some form of advertising for a business credit card offer. You may have noticed flashy travel rewards points, higher credit limits than you see from personal cards, and interest rates that would make anyone tempted to apply.

So, can anyone get a business credit card? The short answer is YES, as long as you can prove that you have a business of some form or fashion.

Contrary to popular belief, though, you don’t necessarily need to have filed formal paperwork with state or local authorities establishing your business, or to have an Employer Identification Number (EIN) on file. Even if you’re simply a weekend freelancer or sell a few products on eBay or Etsy, you most likely are eligible for a business credit card.

That said, will you qualify for a business credit card—or at least with a card that carries rates and terms your business will find beneficial? This is another matter entirely, and will depend on things like your personal credit history, your business’s revenue, and more.

To help you evaluate your own qualification standards and apply for the card that meets your needs, let’s dig into what you need to know about getting a business credit card.

Why Should Anyone Get a Business Credit Card?

Now we’ve answered your basic question: Can anyone get a business credit card? Yes, for the most part. But why should you get a business credit card? Is it necessary, or even a good idea for your business?

In almost all instances, the answer is yes. From attractive rewards offers to the simple practicality of maintaining your business accounting systems, here are a few of the main reasons to pursue getting a business credit card if you are a business owner of any kind:

Higher Credit Limits

Because businesses tend to spend more than individuals, businesses are rewarded with business credit cards that have higher credit limits than personal cards. A higher credit limit on a business credit card comes with a two-fold benefit: it allows you to spend more money as needed, while also giving your credit score a boost.

That’s because the FICO credit score formula takes into account the amount of credit you’ve been granted and how much you use. Utilizing a moderate amount of credit raises your credit score, and a higher credit limit makes it easier to use credit without utilizing too much of what’s available.

Better Credit Card Rewards

The competition is fierce to attract business owners to open a business credit card, and companies frequently offer tempting signup bonuses, great cash back options, and stellar rewards programs in order to earn your business.

Plus, because business credit card rewards programs are tailored to fit the needs of business owners, you’ll likely see higher levels of rewards on things like office supplies or business travel than you’d find with a personal credit card.

0% Introductory Offers

For business owners considering some form of financing—whether a credit card, a loan, or outside investment—to expand their businesses, there may be no more popular incentive than the 0% introductory offer.

Available for 6, 9, 12, and even up to 15 months, these offers allow you as a business owner to maintain a balance on your business credit card for a given period without accruing any interest on that balance. In essence, it’s free business financing—and some business owners have used this opportunity to stage significant business growth.

Keep in mind, these offers come with a caveat. After the introductory period ends, interest rates on these cards can skyrocket quickly. If you haven’t made sufficient plans to pay off your balance by the end of the offer period, you may find yourself paying exorbitant interest rates on the remaining debt.

can-anyone-get-a-business-credit-card

Separating Personal and Business Expenses

Beyond the more attractive benefits of valuable rewards and introductory offers, there’s a simpler and more practical reason for anyone to get a business credit card: it will help you separate personal and business expenses.

Any accountant or bookkeeper can tell you of the horrors involved in trying to file taxes or keep accurate accounting for a business owner who mixes daily business and personal expenses on the same form of payment. It’s a common mistake that leads to hours poring over receipts and huge missed opportunities for business tax deductions.

Even if you plan to pay off your card balance every month, obtaining a separate business credit card for expenses related to your business will simplify your finances and help you avoid this frustrating scenario.

Establishing a Business Credit History

For business owners with high aspirations of growth, obtaining a small business loan may eventually become an important part of making those dreams a reality. Regular and responsible use of a business credit card can help to establish your business credit history, proving your business’s ability to effectively use and pay back credit. Beginning to build this credit history now could strongly improve the fate of your future business loan application.

Application Requirements to Get a Business Credit Card

Almost all business credit cards can be obtained through a simple online application that will ask straightforward questions and require a few simple forms of documentation.

No matter which company you apply with, you can expect to supply the following basic information:

  • Your legal name
  • Contact information
  • Industry type
  • Time in business
  • Number of employees
  • Annual business revenue
  • Total annual income
  • Estimated monthly expenditures
  • Legal name of your business
  • Federal tax ID—this is your EIN. If you’re a sole proprietor or single-member LLC and don’t have an EIN, you can use your social security number.
  • Business entity type, i.e. sole proprietor, LLC, S-corp, or C-corp

Though it may take a little bit of time to gather the necessary application and complete your credit card application, the process is relatively straightforward. The credit card company simply wants to know a little about you, your business, what you do, and whether you’re able to repay your debt.

The 3 Most Important Qualifications to Get a Business Credit Card

Clearly, card issuers take a variety of information into account when considering your business credit card application. But what if that information is truly most important to their approval decision?

Let’s take a look at the three most important qualifications that will be used to determine whether you qualify for a business credit card:

1. Personal Credit Score

Some business owners are surprised to find that when assessing applications for business credit, lenders and credit card companies alike tend to look to a borrower’s personal credit history as the strongest indicator of financial stability.

Just as if you were applying for a personal credit card, credit card companies will look to your FICO credit score and report to determine whether you qualify. Most credit card offers come with a range of acceptable credit scores, and there’s little if any leeway available if your credit score falls below that range.

The good news is that most credit card companies publish the average accepted credit score for their different credit cards, so if you know your credit score before you apply, you can make a good assessment about whether or not your application is likely to be approved. This allows you to avoid multiple applications, which can result in small dings to your credit reports.

2. Debt-to-Income Ratio

Credit card companies want to make sure that if they issue you a business card with a set credit limit, you’ll be able to repay the amount owed at any given time. To make this assessment, they’ll look to what’s called your debt-to-income ratio.

To calculate your debt-to-income ratio, simply take your total monthly debt payments and divide it by your monthly income.

A low debt-to-income ratio is a great sign and, in contrast, a high debt-to-income ratio signals you’re already holding a lot of debt and may be struggling to make timely payments. The lower your debt-to-income ratio, the better your chances of credit card approval will be.

3. Signed Personal Guarantee

When accepting an offer for a business credit card, it’s important to read the fine print. One of the clauses sometimes includes a personal guarantee, which states that you are personally liable for debts incurred on your business credit card if the primary payer (i.e. your business) doesn’t pay. This means in the event that your business fails, you will still be responsible for repaying debts incurred on your business credit card.

To ensure that your business and personal finances are protected, you must make a careful budget for your business, not accruing more debt than you can afford. For small businesses, a business credit card can be a way to make large purchases that you don’t have the cash on hand to pay for at the time. Even so, make sure you’re not overleveraging yourself and putting your personal finances at risk.

can-anyone-get-a-business-credit-card

How to Apply for a Business Credit Card

Now that you understand the requirements to be eligible for a business credit card and some of the potential risks of using one, it’s time to learn how to apply for one.

1. Check Your Personal Credit Report

When choosing a business credit card, you want to be fairly certain you’re eligible before submitting an application so that you don’t receive a ding to your credit report along with a rejection for the card. To confirm this, take the time to check your personal credit report and score with all three major credit bureaus—Experian, Equifax, and TransUnion—so that you know in advance what credit card companies will see.

Should you encounter mistakes on your credit report, contact the reporting agency in writing to have the errors corrected. Most credit card companies offer a range of acceptable credit scores for applicants, so you can seek out a business credit card option that will fit with your credit history.

2. Calculate Your Debt-to-Income Ratio

If you have a high debt-to-income ratio, it’s likely that a card issuer will believe you’re already leveraging more credit than you can afford. Too much debt will scare off the credit card company, forcing them to reject your application.

Again, take the time to calculate your own debt to income ratio and know what the credit card company is likely to find so that you can better predict whether your application will be accepted.

3. Identify the Right Business Credit Card for Your Needs

Each business credit card has unique rewards and perks. Some cards focus on dining out while others offer heavy rewards for travel or airline miles. Depending on your lifestyle and type of business, choose the card that fits your needs, gives you the rewards that make you happiest, and that is likely to accept your application given your credit history.

4. Submit Your Business Credit Card Application

Once you know which card you’re eligible for and will best fit your needs, it’s time to submit an application. Most applications can be completed online and shouldn’t take more than a few minutes if you’ve already gathered the necessary documentation. When your application has been submitted, you may receive news of approval in as little as a few minutes.

5. Use Your Business Credit Card Responsibly

You’ve done your research, submitted the application, and finally have your business credit card in hand. Now, you need to use that card responsibly. Mind your business budget, allowing for the unexpected, and take care not to overuse your credit. Ideally, you should aim to use about 30% of your available credit limit, paying off as much of the credit card balance as possible each month.

Who Can Get a Business Credit Card?

So, can anyone get a business credit card? The answer is, fortunately, almost any individual with a business of some kind can get a business credit card. What is most important, though, is making sure you find the business credit card that accounts for your financial history, meets your business’s future needs, and will set both you and your business up for a positive financial future.

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.

Brayden McCarthy

Brayden McCarthy is Head of Policy & Advocacy at Fundera. He was previously a presidential appointee in the Obama administration, where he served as Senior Policy Advisor in the West Wing Office of the White House National Economic Council and the U.S. Small Business Administration.

Our Picks