Skip to content

How to Get a Business Credit Card: 4 Steps for Small Businesses To Take in 2023

Picture this—you’ve just kick-started your business, and you’re nervous as a cat. But just then, you get offered a helping hand—one that simplifies expenses, earns rewards, makes corporate purchases easier, helps build business credit, provides great rates on loans, and even makes tax filing bearable. 

This helping hand is no fairy godmother. It’s a simple business credit card.

That’s probably why you’re looking for ways to get your hands on one. 

Good news—your search stops here. 

This article will tell you:

  • The four simple steps involved in getting a business credit card.
  • A breakdown of the basics of how business credit cards work.
  • Answers to key FAQs on how to get a business credit card.

How to Get a Business Credit Card in 4 Simple Steps

A business credit card is like any other credit card—except it’s specifically for business use. It comes with some great perks, like a higher credit limit and itemized year-end statements that make tax return filing easy. 

And the best part is, you don’t need a formal business structure (like an LLC or S Corp.) to get a business credit card. Freelancers, sole proprietors, gig workers, and independent contractors can all qualify for a dedicated business card.

In fact, American small businesses are some of the biggest consumers of business credit cards (the Federal Reserve Bank’s Small Business Credit Survey says 67% of small businesses use them—while a recent study by the Mercator Advisory Group indicates that small businesses spend 1 in every 6 dollars spent on credit cards). 

Here’s a breakdown of how you can get one in four simple steps:

1. Check your credit score, credit report, and eligibility

Whether you qualify for a business credit card largely depends on your personal credit score. So, even if your company is two days old, it has the same shot as more established companies. You’ll typically need a good to excellent credit score to qualify for most business credit cards (that’s usually a personal FICO score of 690 or higher)—but there are also secured credit card options for entrepreneurs with bad or fair credit. 

With My FICO, you can compare your FICO Scores and credit reports from all three major credit bureaus—Experian, TransUnion, and Equifax.

The next step is to make sure you check for any errors on your credit report. If there are any, it’s crucial to get them corrected before you try to apply for a credit card.

Why does your business credit card approval depend on your personal credit score?

Because you don’t need an employer identification number (EIN) to apply for a business credit card—so for businesses without an established business credit history, the owner’s Social Security number (SSN) and personal credit history will prove the business’s creditworthiness.

This can be great for new and small businesses—but it also means that you (the owner) arepersonally responsible for paying back the credit card debt. Miss a payment or make a late one, and your personal credit score will suffer.

Keep in mind that one way to protect your personal assets is incorporating your business as an LLC (limited liability company). Getting a business credit card for LLC ensures your company is a separate entity from your personal assets, and gives you the ability to apply for business credit under your company name instead of your personal name.

2. Research and compare different business credit cards

Once you know what credit cards you can qualify for, narrow down your options based on specific needs—you’ll want to compare key credit card features, rewards, rates, and fees.

Here’s a table with the aspects you should compare:

Features / Fees What to consider
Credit card issuer Stick to reputed and major banks—such as Bank of America, JPMorgan Chase, Wells Fargo, US Bank, Citigroup, and so on—but first try to leverage the relationship you already have with your bank
Type of business credit card Different types of business credit cards cater to specific needs—these include 0% APR cards, cash-back business cards, travel credit cards, and lower interest rate credit cards.
Annual fee What the card issuer charges you for the card’s rewards and benefits—this is why cards with better rewards tend to have higher annual fees.
Interest rates A yearly rate you pay for borrowing money from your card issuer—you can usually avoid paying it if you don’t carry a balance from month to month. 
0% Intro APR Period Some business credit cards come with a 0% intro APR offer (they charge a 0% interest rate on existing or new debt)—this can benefit startups that need to finance business purchases without accruing interest. 
Balance transfer fee Most credit cards (even the ones with a 0% intro APR offer) have a balance transfer fee (usually 3%–5%).
Rewards program Usually, business credit cards offer two types of rewards

Flat-rate rewards give you the same amount of points regardless of what category you spend in. Tiered rewards offer higher rewards for spending more (or in a certain category).

Foreign transaction fee Credit cards can charge a standard 3% foreign transaction fee when you make purchases outside the US, or if you buy a product online from a foreign retailer—so if you often travel abroad on business, go for a credit card with lower (or zero) foreign transaction fee.
Welcome Bonus A welcome bonus typically includes extra points, rewards, miles, or cash back if you spend a certain amount of money within the first few months of using your card.

3. Apply for the most suitable business credit card

Once you’ve decided on a business credit card, you should be able to apply for it instantly—given that you have the necessary information at hand.

You’ll have to provide a mix of personal and business information to apply. Almost all business credit cards will ask for your Social Security Number—but there are a handful that let you apply with just your Employer Identification Number (EIN)

Here’s some of the key information you’ll need for your application:

  • Your business’s legal name, address, and phone number
  • Type of business and industry details
  • Legal structure of your business
  • Federal tax identification number (Your EIN and/or SSN)
  • Number of employees working for your business
  • Approximate annual business revenue
  • Estimated monthly expenses on the credit card

4. Wait for the approval decision

Here’s an encouraging statistic: 80% of businesses that apply for credit cards were approved (says Small Business Credit Survey).

It usually shouldn’t take too long to hear back about approval after submitting your credit card application—most online applications will tell you almost instantly if you qualify. 

Once you’re approved, you’ll be notified about when to expect your business credit card in the mail—and you’ll most likely get an email on creating an online account. Check the accompanying information, and then activate your business credit card.

However, if you get denied, make sure you check the issuer’s reason for denial—this will help you figure out if something is affecting your credit score. 

Understanding the Basics of Business Credit Cards

Now  you know the steps to getting a business card—so let’s take a step back and go through the basics.

1. How do business credit cards work?

Pretty much the same way as personal credit cards—but they tend to have a higher spending limit and better rewards programs. They also include business-centric tools to help track expenses in various categories. You can usually download this expense information, and easily import it into your business accounting software. 

2. What are the different types of business credit cards?

There are three main types of business credit cards—

A. 0% APR cards

They have a 0% introductory APR on new purchases and balance transfers for a limited time—when you won’t have to pay your credit card’s ongoing interest rate (typically 15–18 months, for some cards even 21 months). 

These cards are especially useful if you’re looking to finance large purchases or consolidate existing debt for your business—but keep in mind that even credit cards with a 0% intro APR offer have a balance transfer fee (usually 3%–5%).

B. Cash-back cards 

These business credit cards earn cash back, and are very versatile in nature. You can choose to redeem your rewards as a statement credit or get them deposited into a connected bank account. 

Some cash-back cards will give you the same amount of points regardless of what category you spend in—this is called a flat-rate program. Other cash-back cards have tiered rewards—they usually offer a higher rate of interest if you spend more on specific categories (like groceries, gas, department stores, or even Amazon purchases).

C. Travel credit cards

Credit cards for business travel are perfect for people who spend a lot of time on the road (or in the air). Business travel cards earn points on travel-related expenses and offer additional traveler-friendly perks like lounge access and airline credits. 

Just like cash-back cards, they offer either flat-rate rewards or tiered rewards—with certain categories earning a higher rate.

3. What are the benefits of using business credit cards?

Brian Greenberg, CEO and Founder at Insurist, believes that having a business credit card can be a real game changer for businesses:

When you have a business credit card, you’re able to build your credit history as an entrepreneur or small business owner. This is especially important if you’re just starting out, because it will help you get better rates on things like loans and personal lines of credit. If you’re looking to expand your company in the future (like buying property), this can make all the difference when it’s time for financing.

Apart from better access to funds and better rates on loans, here are some additional benefits of business credit cards:

A. Separate business finances from personal finances

A business credit card reduces your personal responsibility for business expenses—you build credit for your business, keeping your business and personal finances separate—so even if something terrible happens to your personal credit, your business can still be in a good position to ask for financing.

B. Track expenses

A business credit card statement can make tracking expenses so much easier—and help you claim tax deductions for business costs.

C. Set up your own spending limits

Setting spending limits has many uses in a business environment. As a business owner, you can get employee cards—authorized-user accounts tied to the same credit line as the primary cardholder. 

This way, you can track the exact amount of money your employees spend by using the credit cards your company gives them—which can give you key insights into where your funds are going and what they’re used for. 

D. Comes with higher credit limits

Business credit cards have higher limits than personal credit cards—$30,000–$50,000 (or more)—giving you more room to cover common business costs.. And the extra grace period means 30, 60, or 90 days to pay back the money without interest—so you have more leeway to put money into your business

4. What are the limitations of a business credit card?

Business credit cards come with some limitations—

A. Expensive annual fees

Some business cards have no annual fees, but most are expensive and charge hundreds of dollars a year. This is often balanced out by high rewards and benefits (as well as higher credit limits). 

B. High APR

Like most personal-use credit cards, business cards have a high APR. Your best bet is to use a business credit card with a 0% introductory APR—and pay off your balance before the regular APR takes effect.

C. Personal credit check and guarantee

Usually, there’s a personal credit check for the business owner or the authorized representative for all business credit cards—that’s because the person who applies for the card is technically held liable for any balance on the card that the business can’t repay.

Key FAQs on How to Get a Corporate Credit Card

Let’s understand all there is to know about business credit cards through some key FAQs.

1. How to get approved for a business credit card?

There’s no sure-shot way to get approved for a credit card for business—issuers may look at both your personal credit score and your business credit score. 

You’ll usually need a good or excellent credit score of at least 690 to get approval for the best cards. Other factors—like the age of your business, its current and projected revenue, business expenses, and so on—will also play a role.

2. How to get a business credit card for a startup?

The application process is the same no matter the structure and size of your business..

If you’re applying for cards for a new business, it’s likely that you don’t have business credit yet—so the lender will need your personal Social Security number to check your credit history. This makes you personally liable for your business credit card as well as all the employee transactions on a company credit card. 

In this case, the issuer must see you as a reliable borrower—which can only be proven through your credit score. A credit score of 690 and above puts you in a good spot to qualify for a small business credit card. 

If you’re an LLC, you can apply for business credit under your company name instead of your personal name—your company will be separate from your personal assets, protecting you when your employees use a company credit card.

3. How to get a business credit card with bad credit?

You can qualify for secured business credit cards even with bad credityou need to pay an additional security deposit that’s in line with your credit limit, and get limited or no rewards

On the bright side, secured credit cards usually have lower fees—and you can use them to build your credit score and qualify for better credit cards to support your business.

4. How to get a business credit card without a business?

You must have a legitimate business operation to get a business credit card—but the structure and size of your business don’t matter. This is why sole proprietors, freelancers, gig workers, and the like, can all qualify for a business credit card. 

5. How to get a business credit card with just your EIN?

An EIN is a nine-digit tax ID number that small business owners, sole proprietors, corporations, and others in the US can apply for and get from the Internal Revenue Service (IRS). 

Applying for a business card with just the EIN (without the SSN) can prevent your personal credit history from affecting your credit card eligibility. 

You won’t usually get a credit card with just your EIN (especially if you’re a small business)—this is because credit card issuers protect themselves by asking the business owner to provide a personal guarantee for debts. 

Issuers can also use SSNs to inquire about your personal credit by performing a hard credit check—which can further negatively impact your credit score. 

Top Credit Cards for Business You Should Consider

  Business Platinum Card® from American Express Capital One Spark 2% Cash Plus U.S. Bank Business Platinum Card
Best for Work travel Cash back 0% introductory APR; no annual fee business credit card
Annual fees $695 $150 $0
Credit score required 690-850 (Good –Excellent) 800–850 (Excellent) 800–850 (Excellent)
Variable APR 17.99%–25.99% No APR—pay off the balance in full every month to avoid a 2.99% late fee. 15.74%–24.74% 
Perks Tiered rewards system; Amex global lounge access; no foreign transaction fee; cash flow flexibility, etc. Unlimited 2% cash back on every purchase; $1,000 in the first 6 months; no preset funding limit. 0% Intro APR on purchases and balance transfers for the first 18 billing cycles.
Rating 4.5/5 4.5/5 4/5
Application link Business Platinum Card® from American Express Capital One Spark 2% Cash Plus U.S. Bank Business Platinum Card

Key Takeaways

  • A business credit card is created specially for business use—it helps track business expenses, and comes with higher credit limits.
  • Most top business credit cards require a personal FICO score of 690 or higher—but there are secured business credit cards for entrepreneurs with bad credit.
  • You’ll most likely need to provide your SSN to get access to a business credit card, especially if you’re a new business owner.

If you’re looking to expand your company in the future, getting a business credit card now can greatly change your funding prospects.

 

Articles Credit Cards

AUTHOR Deepti Nickam

Content writing and marketing professional with 4+ years of experience in the B2B and B2C space.

Related posts