How to Get a Business Credit Card (Regardless of Your Company’s Size)

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If you own or run a company, it’s likely that you have at least some business-related expenses. Rather than paying these costs outright with a check or cash, though, there could be some definite advantages to using a business credit card.

But before you sign up for just any card, follow a few key steps to determine how to get a business credit card and which card would be best for your particular objectives.

If you’re wondering how you can get a business credit card, the good news is that in many cases, it’s easier than you might think! Using a company credit card can also come with a number of nice perks, like cash-back, travel benefits, or other rewards.

In addition to simply paying your expenses, a business credit card can be used for a number of other financial-related needs, too. These can include alternate financing strategies in lieu of taking on business loans.

So, how exactly do you go about securing a business credit card?

5 Simple Steps for Choosing & Getting the Right Business Credit Card

Narrowing down the right business credit card can be quick and easy if you work through the following 5 steps:

1) How much does your company spend each month?

The first step is to determine approximately how much your company spends on a monthly basis. In some cases, it may just be the cost of your internet service and a few new ink cartridges.

In other cases, though, you could have high overhead expenses, along with the cost of inventory, supplies, and marketing materials. And don’t forget to factor in travel if you’re on the move — this can really add up!

Hot Tip: As a part of your business credit card decision, ensure that you don’t let large balances roll over if you aren’t able to pay off the statement in full every month. Otherwise, you could find that you’re stuck with escalating interest charges over time.

2) What type of expenses does your company primarily have?

Having an approximate expense figure is key to pointing you in the right direction in terms of the perfect card, but so are the types of expenses you have.

Savvy business owners will ascertain their “categories of spend” and look to sign up for a business card that rewards you in those categories. For example, if you spend a lot on online advertising (such as Facebook or Google Ads) then a card like the Chase Ink Business Preferred will earn you 3pts for every $1 spent on that type of purchase.

This can make a significant difference over the course of a year vs putting that spend on a card that just earns you 1pt per $1 spent on advertising. So, it’s critical to determine where you’re spending your money and allocate that spend to cards that reward you for doing so. This is one of the reasons that Alex earns so many points because he rotates the use of 4-5 business cards to ensure that each $1 he spends in his business is earning 1.5 – 5pts.

Some of his favorite business cards are as follows:

And for straight up cash-back earnings:

3) Is a credit card or a charge card better for your business?

As you go through the process of getting a business card, you should determine whether or not a credit card or a charge card will best fit your needs. Although the 2 types of cards have some similarities, there are also some distinct differences.

multiple credit cards
Choosing the right card for your business can make a big difference. Image courtesy of Shutterstock

One primary difference is that there is typically no pre-set spending limit on a charge card. Also, there is no interest charged to charge cardholders — because you’re required to pay back the entire balance in full every month.

If your payment is late, you may be dinged with a sizeable late fee…or possibly even a suspension of your charge card.

In addition, many charge cards are only accepted at certain locations like retail stores or gas stations (typically referred to as “branded” cards), while credit cards like Visa and Mastercard are generally accepted anywhere.

4) Do you want a business credit card with a rewards program?

Having a rewards program associated with your business card can be a nice incentive. However, the rewards may come at a price.

For example, many rewards credit cards charge an annual fee. So, before you apply for a card, make sure that the potential rewards will meet or exceed any yearly fee you’re charged.

Put another way – you don’t want to sign up to a high annual fee travel card that offers luxury lounge access, like the Business Platinum Card® from American Express, if you hardly ever travel. Instead, it might make more sense to sign up to a lower annual fee card like the Ink Business Cash if you’re not a big traveler, but you’re looking to get cash-back on your business spend.

5) Which business credit card will you qualify for?

Even if you’re found the ideal business credit card, you will still have to qualify before you are issued a card to use.

Similar to when you apply for a personal credit card, the card issuer will typically check your credit report so they can determine your payment history, as well as your credit utilization ratio and the average length of your other credit accounts.

Hot Tip: If you have trouble qualifying for a particular business credit card, you could try applying for a card that’s affiliated with your current bank or other financial institution where you already have a financial relationship built.

How to Apply for a Business Credit Card

Applying for a business credit card is pretty similar to applying for a personal credit card. The card application will ask you for personal and financial information, but there will be some additional information fields, too:

  • Name of the business
  • Type of business
  • Your role in the business (i.e., owner, founder, etc.)
  • Tax ID number or Employer Identification Number (EIN)
  • Years in business
  • Number of employees (if applicable)
  • Annual revenue
  • Estimated monthly expenses

Final Thoughts

Because all businesses and financial needs are different, there is no single “best” business credit card across the board. To determine the card that is right for you, review several potential options — including spending limits, rewards offered (if any), annual fee, and qualification factors.

Lastly, if you’ve decided on a business credit card, don’t miss our piece on How to Maximize Rewards from Your Business Purchases.


Featured Image: Courtesy of Shutterstock.com

FAQ

What are the best business credit cards with rewards programs?

The best rewards points will really depend on what you’re looking for regarding perks. For instance, some cards offer you “points” when you spend on the card – and the point value may even vary, based on where you are spending. You can then “cash in” your points for a plethora of items like books, clothes, and other types of merchandise.

Other cards offer travel-related options such as airline tickets or hotel stays. Still others offer cash-back, which may be used for paying part of your monthly balance.

What type of information will the business credit card issuer ask for on the application?

All credit card issuers will want to know information about you and your business. So, you name, contact details, and Social Security number will be required, as will your credit score. In addition, the card issuer will usually want to see the amount of revenue that your company is bringing in. This can help them determine whether or not you have the financial wherewithal to pay your business credit card balance.

If your business is just starting out, though, you may still have options when it comes to getting a company credit card. In this case, the card issuer will typically want to know the amount of your personal income.

Does your personal credit score matter when applying for a business credit card?

When applying for a business credit card, all card issuers will typically consider both your personal credit score and your business credit score (if you have one). However, even though the card you are applying for is intended to be used for business purposes, it is usually your personal credit score that is weighted more heavily in the decision. This is especially the case if your company is relatively new and you don’t have much (or any) business history to show.

Are there any business credit cards with unlimited lines of credit?

Business expenses can vary — sometimes significantly — from one month to the next. There are some cards available that have a large 5- or 6 six-figure spending limit, which gives you some major flexibility.

On the other hand, business charge cards will usually have an unlimited spending limit — but you also need to pay off the balance of the card in full every month. Otherwise, you will be docked with a late fee and/or higher interest, and possibly even suspension of your business charge card usage.

You may be able to find a “best of both worlds” business card, that gives you the option to either pay your statement in full every month, or to defer a portion of your bill with no penalty.

Is there a difference between a business credit card and a corporate credit card?

While they may initially appear similar, there is a difference between a business credit card and a corporate credit card. The biggest of these is the fact that with a business card, the business owner – and oftentimes their credit score – is on the hook if the bill is not paid. With a corporate credit card, though, if the bill is not paid, it is the company itself that is responsible for paying it.

How can you prevent identity theft with a business credit card?

Just like with your personal credit card(s), your business credit card(s) could be at risk of identity theft. In fact, because business cards often have a higher (or even unlimited) credit limit, these can be a treasure trove for criminals to get hold of.

To help prevent or combat identity theft with your business credit card, be sure that you keep a close watch on your statement. If you see any charges that were not authorized, contact the card issuer immediately to report it. In many instances, if you contact the card company within 48 hours, the most you may be liable for is $50.

Susan Wright

About Susan Wright

While writing about finance and insurance isn't something that keeps most people awake at night, it is what Susan Wright has focused on for more than 25 years. As a financial copywriter, Susan has an eye for money-related details such as credit and savings, and she loves to pass along helpful information to consumers. Susan holds 11 financial industry designations (including CLU, ChFC, RHU, REBC, ADPA, CITRMS, CIPA) as well as several licenses.

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