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.
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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?
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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:
|Credit Card||Key Benefits & Info|
|Ink Business Preferred® Credit Card|
(at Chase's secure site)
Must Reads: For more info on the Ink Business Preferred, see our guides on its benefits, 7 things to do as a new cardholder, and our full review. This is our favorite of Chase's business credit cards.
|Credit Card||Key Benefits & Info|
The Business Platinum Card® from American Express
(at Amex's secure site)
Must Reads: For more info on the Amex Business Platinum, see our insights on its benefits, top card FAQ's and the 24 best airport lounges you can access. Go here for our full review. This is one of several business credit cards from Amex.
*This bonus value is an estimated valuation calculated by UP and not the card issuer.
And for straight up cash-back earnings:
|CREDIT CARD||BENEFITS & INFO|
Ink Business Cash® Credit Card
(at Chase's secure site)
Must Reads: For more info on the Chase Ink Cash Card, see our guide on its benefits and our full review. This is one of several Chase business credit cards.
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.
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
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.