Learn how to find, apply, and qualify for a small business credit card.
Business credit cards are a popular choice for small businesses, as they can provide funds quickly, are generally simpler to obtain than a loan, and are suitable for even very small businesses. As you begin to grow your business, you may find yourself maxing out personal credit cards. When you are ready to move to a business credit card, these are the steps you will need to take.
Why get a business credit card?
Many small business owners start out by using their own personal credit cards and savings, but it’s likely that your business will outgrow this. Business credit cards are available for all types of businesses, from sole proprietorships to small businesses with a few employees to larger businesses.
Business credit cards have a number of key advantages:
- They have higher credit limits than personal credit cards, allowing you to make the larger purchases that may be necessary to grow your business.
- They give you quick access to credit, as opposed to business loans which may take days or weeks for approval.
- Many credit cards offer rewards and perks that you can earn through normal use, such as points, cashback, cashback bonuses for new cards, introductory 0% APR periods, and travel perks.
- They can help you track your expenses and keep your business and personal spending separate. This simplifies your yearly taxes and legal situation.
- They help you build business credit, which can assist you in obtaining loans and other types of financing.
How can you get a business credit card?
There are a number of steps you can take to get the right business credit card for your company.
1. Determine what kind of credit card your business needs.
When you decide to get a business credit card, it’s wise to first evaluate your business’s spending and determine how you expect to use the card. There are a number of types of business credit cards available, each with different rates and rewards, and you’ll want to choose the card that offers the most benefit to your particular business.
Some factors to consider include:
- Points or cashback categories. Some credit cards offer a higher percentage of cash back in specific categories, such as office supplies or gas. If your business spends heavily in a particular category, it’s a good idea to look for a card that offers extra rewards for those purchases. Otherwise, you may want to consider a card with a flat-rate cashback program.
- 0% introductory APR offers. For new businesses and startups, a card with an introductory 0% APR period can act as a free loan, allowing you to carry a balance forward to the next billing month without being charged interest. However, it’s crucial that you pay off the full balance before the introductory period ends or you could find yourself paying large amounts of interest.
- Introductory bonus offers. Credit cards may offer a special bonus payment if you spend a certain amount after first getting your card. If the amount is within your normal spending, you can save money by taking advantage of this bonus.
- Travel. Some business credit cards offer a variety of travel rewards and perks. If you or your employees travel frequently for business, you may want to consider this type of card.
- Foreign transaction fees. If you will be using your card abroad or purchasing items from other countries, it’s a good idea to choose one that does not charge foreign transaction fees.
- Cards with annual fees. Some cards charge an annual fee. These fees often have more valuable rewards, but you’ll need to calculate how much you will use the card and be able to take advantage of these benefits to decide whether the annual fee is worth it.
2. Check your credit scores and other requirements.
Your personal credit score is the most important factor in your business credit card application. Credit card companies will likely also check your business credit score, if you have one. It’s important to know your credit score and make sure it’s above the minimum requirement for the card you want to apply for.
You can get a free personal credit report every 12 months from the three major credit reporting companies Equifax, Experian, and TransUnion at AnnualCreditReport.com.
Make sure you’re not applying for business credit cards when your credit score is too low. Whenever you apply for a business credit card, credit card companies will do a hard pull on your credit report, which shows lenders that you’ve made a credit application. Multiple hard pulls in a short period of time can lower your credit score, increasing the difficulty of getting a credit card. Hard pulls typically affect your credit score negatively for about one year.
If you do have a lower credit score, a good option may be to get a secured business credit card. With a secured card, your credit limit is backed by an upfront deposit you make. So if you make a deposit of $500, your credit limit is usually $500. Using and paying off a secured card can help you build credit, which will in turn help you get an unsecured card.
In addition to your credit score, there are a few other factors that can affect your eligibility for a business credit card. Some companies won’t offer credit cards to businesses in industries that are considered higher risk, such as adult entertainment, gambling, or cannabis businesses. In addition, if you operate a sole proprietorship or nonprofit, you’ll need to find a credit card issuer that accepts this type of business. Credit card companies may also have specific requirements for your business or personal income.
It’s also important to be aware that a personal guarantee is required by most credit cards. This makes you liable for paying off the debt. To be ready to apply for a business credit card, you will need to make sure that you have reliable cash flow and income.
3. Gather information needed for applying.
When you apply for a business credit card, the application will require certain information, including:
- Your social security number or employer identification number if you have one
- Your name, business’s legal name, and your business and personal contact details
- Type of business entity (such as sole proprietorship, LLC, corporation, partnership, nonprofit)
- Personal and business income information
- Personal and business debt information
- An estimate of much you spend each month
- Information about your business industry and activities
- Number of employees
- Length of time in business
4. Apply and receive your card.
Once you apply, you should be notified of the card issuer’s decision within a few weeks. If you are approved, you can begin to use your business credit card responsibly. Make sure you pay your card off regularly, stay aware of your rewards to make the most of them, and avoid mixing business and personal expenses. If you give business credit cards to employees for their use, make sure you have clear guidelines and monitor their usage.
Can you get a business credit card with bad credit?
It can certainly be more difficult to get approved for a business credit card with a lower credit score, especially for many of the popular cards that offer perks and benefits. Many credit card companies will only approve your application if you have a “good” credit score—typically 670 or above. However, if you do have a lower credit score, there are still many options available to you:
- Cards that don’t consider credit score. Some card issuers do not look at your personal credit score when evaluating your application. The Brex Card is a popular example, looking instead at your business’s financial information, such as available cash, spending patterns, and credit history.
- Secured cards. A common option for those with bad credit is to use a secured business credit card. With a secured card, your credit limit is backed by an upfront deposit you make. So if you make a deposit of $500, your credit limit is usually $500. As you use your card and make on-time payments, you can build on your credit score. A popular example of a secured card is the Wells Fargo Business Secured Credit Card.
- Business lines of credit. A business line of credit may be a good alternative to a business credit card. A line of credit acts as a revolving loan that gives businesses access to a fixed amount of capital that they can withdraw when funds are needed. Some alternative lenders may accept applicants with lower credit scores, and they also typically weigh other factors—such as your business’s financial history—rather than relying so heavily on personal credit score.
Compare Business Credit Cards
|Good For||Credit Card||Annual Fee||Rewards||Intro Offer|
|Cashback||Capital One Spark Cash for Business||$0 for first year, then $95||2% cash back on all purchases||$500 cash bonus once you spend $4,500 on purchases within the first 3 months|
|Cashback, No Annual Fee, 0% APR Period||American Express Blue Business Cash™ Card||$0||2% cash back on all purchases up to $50,000 per calendar year, then 1% on purchases after that||$250 statement credit once you spend $5,000 on purchases within the first 6 months, with an additional $250 statement credit after you spend an additional $10,000 or more within the first year|
|Cashback, No Annual Fee, 0% Intro APR||Chase Ink Business Cash® Credit Card||$0||5% cash back on office supplies and internet and phone services, 2% cash back on gas station and restaurant purchases, 1% cash back on all other purchases||$750 cash bonus once you spend $7,500 on purchases within the first 3 months|
|Cashback, No Annual Fee, 0% Intro APR||Discover it® Business Card||$0||1.5% cash back on all purchases||Cashback match on all cash back earned after first year|
|Cashback, No Annual Fee, 0% Intro APR||U.S. Bank Business Cash Rewards World Elite™ Mastercard®||$0||3% cash back on purchases at gas stations, office supply stores, and cell phone/service providers, 1% cash back on all other purchases||$300 cash bonus once you spend $3,000 on purchases within the first 90 days|
|Cashback, No Annual Fee, 0% Intro APR||Wells Fargo Business Platinum Credit Card||$0||1.5% cash back on all purchases, or 1 point on every $1 spent and receive 1,000 bonus points when your company spend is $1,000 or more in any monthly billing period||$300 cash bonus or 30,000 bonus points once you spend $3,000 on purchases within the first 3 months|
|No Annual Fee, 0% Intro APR||American Express Blue Business® Plus Credit Card||$0||2X points on first $50,000 spent in purchases each year, 1X points on purchases after that||10,000 points once you spend $3,000 on purchases within the first 3 months|
|No Annual Fee, 0% APR Period||U.S. Bank Business Platinum Card||$0||N/A||0% Intro APR for 15 billing cycles|
|Travel||Capital One Spark Miles for Business||$0 for first year, then $95||2X miles on all purchases||50,000 miles bonus once you spend $4,500 on purchases within the first 3 months|
|Travel, No Annual Fee, 0% Intro APR||Bank of America Business Advantage Travel Rewards World Mastercard®||$0||1.5 points per dollar spent, 3 points per dollar spent when you book travel through the Bank of America® Travel Center||30,000 miles bonus once you spend $3,000 on purchases within the first 90 days|
*The descriptions and offers of these business credit cards are current as of the date of publishing. Offers and terms may have changed since this article was published.
The majority of businesses will need a business credit card as they expand. Obtaining a business credit card can have many benefits for your business, from rewards to growing your business credit score. To find the best option for your business, it’s wise to carefully evaluate your spending habits and your business’s needs.