How to Apply for a Business Credit Card



how to apply for a business credit card

If you’re a business owner, you can apply for a card specific for business use. You can be approved for a card even if you’re a sole proprietor.

What if you don’t have an Employee Identification Number (EIN)? That’s okay. In lieu of an EIN, you can use your social security number on the application.

You should already have a business checking account. You’ll be asked to provide that information on the credit card application. Also, you should already have registered your business.

It makes good sense to have separate personal cards and business cards. That makes all your financial reporting much easier, whether you do that monthly, quarterly or annually.



What is a Business Credit Card?

As it sounds, the card is only used for business purchases or activities. The uses can include things like travel and supplies.

You can even use the business’s card to pay utilities such as phone services and electric or buy items at office supply stores. That’s a good move if you’re using a card that issues a percentage of cash back to you as a statement credit. The cash back credit will be issued based on the amount you pay against the balance.



Personal credit cards are only used for your personal purchases, such as household items, clothing and groceries. Those items aren’t eligible purchases for a business card.

Why You Should Apply for a Business Credit Card

Now that you have the answer to what are business credit cards, the next question should be why should get a business credit card. There are many great reasons to apply, and are some of them:

Boost Business Credit Scores – When you apply for a business credit card, you’ll be asked to provide your personal credit score. That might help you get the business card, but your personal score doesn’t affect your business’s credit rating. Using the card, and making timely payments on the balance, boosts your business rating. Major consumer credit bureaus look at both scores on loan applications.

Tax Deductions – The annual fee and interest charges are tax deductible as business expenses.



Financials Tracking – You’ll get year-end summaries for your business and personal credit card. This paves the way for easier tax reporting at years end. Keeping business and personal finances separate makes things easier for small business owners.

Line of Credit – It is easier to get a credit card than it is to get a loan, especially if you only have a fair credit rating. As long as you don’t overextend, you’ll build business credit history as you make payments.

Cash Back – Business credit cards typically provide cashback as a percentage of your payment.

For more information go to Why Use a Business Credit Card? Here are the Top Reasons.



6 Simple Steps to Apply for a Credit Card for your Small Business

1. Check You Meet the Business Credit Card Requirements

Card issuers for businesses will look at your (personal) credit score. Good personal credit scores may get you a lower annual fee. Business credit card issuers will make a personal credit check of your financials.

2. Make Sure You Have all the Documents Needed

You’ll need proof that your business is registered. You’ll provide an EIN or use your social security number.

If you’ve been in business for a year or more, you can provide business financial reports.

Major credit card issuers may also set low credit limits for you at first. This may be based both on your personal credit report and your business report. If you make timely payments, your preset spending limit may be adjusted, and your business’s credit score will continue to improve.



3. Compare Business Credit Cards

There are many card options and it’s important to do your research and choose the right business credit card. Here are some key business categories of the card features:

Credit Limit – Credit card companies are understandably cautious and may start with low limits. But the best business credit cards adjust this number up as you make timely payments. Secured business credit cards require that you make a deposit as your personal guarantee before you can use the card. This works similarly to a rent deposit – it’s there for the card company to seize if you default on payments.

Annual Fee – Many cards advertise a 0% annual fee. The 0% fee can last as long as 15 months. However, it’s important to know that if you make a late payment, an annual fee will be assessed.

Foreign Transaction Fees – If you’re not going to travel or conduct business in foreign countries, you don’t need to worry about this one.



Perks – Most business credit cards include perks such as cash back, points or miles (to apply to air travel). You may get a sign up bonus. Choose the perk that best suits your needs.

Additional Cards – Will you need cards for your business partners? Will you need cards for employees (such as for gasoline)? Will the card company provide free employee cards or are there fees?

4. Find Out Your Credit Score Based on Your Personal Credit History

Before you apply for the card, pay off or pay down your personal card. Definitely don’t have any overdue balance amount, which would greatly impact your credit record. Your payment history for items such as a mortgage, utilities and more will be scrutinized.

Commercial credit bureaus will look at your personal finances. If your rating is “good to excellent” you’ll have lots of business credit card options. If you’re rating is “fair” you may be offered an APR as high as 25%. To get a lower APR you may only get a business credit card “secured” by a deposit.



5. Complete Your Business Credit Card Application

Fill out the application and check your work.

If you use a PO Box for mail at your home of business, make sure to also provide the physical address of each.

6. Start Using Your Small Business Credit Card

Start building your business credit score by using your small business credit cards for everyday business purchases. Building business credit leads to a favorable business credit report. Stellar business credit reports are a huge help when you apply to a lender for a loan.

Image: Depositphotos




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Lisa Price Lisa Price is a freelance writer living in Barnesville, Pennsylvania. She has a B.A. in English with a minor in journalism from Shippensburg State College (Pennsylvania). She has worked as a trucking company dock supervisor, newspaper circulation district manager, radio station commercial writer, assistant manager of a veterinary pharmaceutical warehouse and newspaper reporter.

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