Always dreaming about the next destination, credit cards specialist Barbara King is an avid traveler who optimizes her adventures through the use of points and miles. Barbara has earned and redeemed millions of credit cards points which has enabled h.
Barbara King Credit Cards WriterAlways dreaming about the next destination, credit cards specialist Barbara King is an avid traveler who optimizes her adventures through the use of points and miles. Barbara has earned and redeemed millions of credit cards points which has enabled h.
Written By Barbara King Credit Cards WriterAlways dreaming about the next destination, credit cards specialist Barbara King is an avid traveler who optimizes her adventures through the use of points and miles. Barbara has earned and redeemed millions of credit cards points which has enabled h.
Barbara King Credit Cards WriterAlways dreaming about the next destination, credit cards specialist Barbara King is an avid traveler who optimizes her adventures through the use of points and miles. Barbara has earned and redeemed millions of credit cards points which has enabled h.
Credit Cards Writer Dylan Pearl Credit Cards EditorOver a decade of editorial experience across a number of publications and more than 60 countries visited have given Dylan Pearl a wealth of travel knowledge, and the tools to effectively communicate that knowledge to others. Dylan has made it his mis.
Dylan Pearl Credit Cards EditorOver a decade of editorial experience across a number of publications and more than 60 countries visited have given Dylan Pearl a wealth of travel knowledge, and the tools to effectively communicate that knowledge to others. Dylan has made it his mis.
Dylan Pearl Credit Cards EditorOver a decade of editorial experience across a number of publications and more than 60 countries visited have given Dylan Pearl a wealth of travel knowledge, and the tools to effectively communicate that knowledge to others. Dylan has made it his mis.
Dylan Pearl Credit Cards EditorOver a decade of editorial experience across a number of publications and more than 60 countries visited have given Dylan Pearl a wealth of travel knowledge, and the tools to effectively communicate that knowledge to others. Dylan has made it his mis.
| Credit Cards Editor
Updated: Aug 19, 2024, 1:42pm
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Applying for a business credit card is simple but requires diligent research and preparation, like any financial decision. Before you apply, be sure to do the following:
All types of business structures can apply for a business credit card. That includes:
The size, age or nature of your company doesn’t matter for business card eligibility. You can apply for a business credit card even if you founded your company last week. As long as you intend to make a profit from selling goods or services, you have a business. So don’t count yourself out if you’re a part-time freelancer or an eBay seller—these are legitimate businesses.
The first step in applying for a business credit card is determining which cards you have a realistic chance of qualifying for. Generally speaking, a credit card issuer will evaluate your personal credit history to determine whether your business qualifies for a credit card. That means it’s important to maintain healthy spending habits and regular payments on your existing personal accounts to maintain a strong credit score and improve your chances of getting a business card.
Major business assets and revenue can also help your odds of approval as well as qualify your business for a higher credit limit. But if your business is new, the approval decision will depend almost entirely on your personal credit history.
A business credit card application will usually ask for information such as:
Note that if your business doesn’t have an EIN, you can submit your SSN in its place.
Most business card applications will also require the owner’s personal information since the owner will be expected to give a personal guarantee. The credit card issuer may have follow-up questions about the business during the application process. Be honest and provide any documentation requested. Even if your new business’ current income is low or nonexistent, it’s better to disclose this. Be ready to discuss your business and plans for its growth.
It may help to seek out business credit cards offered by banks you already have a relationship with—this can make the application process more comfortable, efficient and successful.
Since business card approval usually hinges on your personal credit history, getting a business credit with a less-than-stellar personal credit report can be challenging. Your options will likely be limited to secured business credit cards requiring a security deposit.
There’s no way to guarantee approval on any credit card application, but there are some things you can do before applying that should increase your chances of success:
Use the correct registered business name on your credit card application. If you haven’t registered a business name and you are a sole proprietor, use your name only as your business name.
Responding to a credit card preapproval offer may also improve your odds.
The card issuer will check your credit once you submit a business card application online. After the credit check is complete, cardholders deemed creditworthy by the lender may see an approval.
Credit cards for businesses can be similar to personal credit cards in terms of perks and reward structures, but many offer higher spending limits and improved reward earnings for business-specific categories such as office supplies, advertising and shipping expenses. Business credit cards also provide business-focused features such as tools to help track spending across various categories or by employee cardholders. With most business cards, expense information is available for download to your business accounting software, making record-keeping easier.
Your business doesn’t need an employer identification number (EIN) to apply for a business credit card. The owner’s SSN will usually be required in the application process. In most cases, the owner is expected to provide a personal guarantee for the business credit card so their personal credit history is used to determine business creditworthiness.
However, if your business has an EIN, it’s beneficial to provide it in addition to the owner’s SSN when applying for a business card as the EIN identifies the business to commercial credit bureaus and helps to establish business credit history.
Business credit cards are useful for establishing, growing and sustaining a business. Here’s what business owners need to know:
Business credit cards often have a higher credit limit than personal cards since both business and personal revenue are considered. As the business starts to demonstrate sales growth and builds its credit history, it becomes easier to increase credit card spending limits and successfully apply for loans or lines of credit.
A higher credit limit allows you to make more purchases in a single statement period without maxing out the card. This avoids a large increase in your credit utilization—the ratio of your credit card’s balance to its assigned spending limit. Credit utilization is a significant factor in determining your credit score—a lower utilization ratio is desirable.
Access to more credit funding helps with cash management, providing funds when incoming cash doesn’t match the timing of cash outflows. This is especially useful for small businesses with financial constraints.
Getting a business credit card and using it responsibly can help your company build a credit history, which is important for future funding. Like individual consumers, businesses have credit histories, reflecting spending, payment and revenue patterns.
A strong credit history increases your business’ credibility and reliability in the eyes of credit card companies, banks, vendors and investors. A business, like any individual, will also benefit from lower interest rates when a business credit bureau reports a clean record and a steady payment history.
To establish business credit, add your company’s EIN to the credit card application, as the EIN is used to track your company’s credit performance.
A business credit card enables more accurate and organized financial reporting by separating personal expenditures from business expenses. Better financial data means improved record-keeping and fewer headaches at tax time.
