Here’s What You Need to Know Before Applying for a Business Credit Card

Here’s What You Need to Know Before Applying for a Business Credit Card

Here’s What You Need to Know Before Applying for a Business Credit Card

Congrats! You’ve decided to invest in your business by getting access to some capital. Perhaps that decision includes opening a new line of credit with a business credit card. Before you hit “submit” on that application, however, some questions may affect you. Will you be eligible for the best interest rates? Are you choosing a card that’s right for the kind of business you’re running? Read on to see the must-read facts regarding your business and getting access to that dream line of credit.

Are You Credit Worthy?

Business credit cards are different than consumer credit cards in some ways, but when it comes to the application process your personal credit scores are still key to whether you get approved. The major business credit card issuers all rely on personal credit scores (and, potentially, other factors) to determine your interest rates and approval odds and your personal credit scores may be impacted if you default or miss a payment on the card once you’re approved (you can learn more about how your personal credit could be impacted here). Your business credit scores could also be impacted if you miss a payment, depending on the issuer (here’s a quick guide to which credit cards report to the major business credit reporting agencies).

You will likely not know beforehand which personal credit score will be used to approve or deny your business credit card application, so focus on the fundamentals of good personal credit like making on-time payments, keeping your credit utilization (ratio of balances to limits) under 30% and not making too many applications for credit (aka inquiries) unnecessarily.

No one wants to apply for cards they’re unlikely to qualify for, so checking your scores ahead of time can help you pick a credit card that matches your credit level. (You can check your personal and business credit for free on Nav to see where you stand.) Rewards credit cards tend to have higher credit score requirements than cards with more basic features.

How to Complete the Application

Filling out the application is relatively simple. You may be asked your personal household information if you have no previous year’s income for a brand-new business. Other pieces of info you’ll need to include:

  • Name and date of birth
  • Business address and phone number
  • Your SSN or EIN
  • Business type (sole proprietorship, partnership, LLC)
  • Number of years in business
  • Industry type

You should learn whether you’ve been approved (and your available credit limit and terms) within a few hours to a week – at the latest.


Charge Cards vs. Credit Cards

Another alternative to a business credit card is the business charge card. Unlike a credit card, which allows you to carry a balance long after the purchases are made, charge cards are designed to give you and your employees temporary access to funds – usually for no more than 30 days. When the charge card bill comes due, payment of all charges must be made in full.

These cards are a good option for businesses who want a line of credit but don’t want the temptation of carrying a balance. It can keep your budget in line and prevent your company from going into the red. 

Consider Secured

If you don’t have a good credit score but would like a business credit card, there are a few secured business credit cards on the market. These function much like the secured cards for consumers do. You’ll need to provide a cash deposit to secure the credit limit of the card (sometimes a larger dollar amount than your deposit, depending on the issuer’s policy) and ensures that you are a good risk for taking on additional debt. Eventually, if the business owner makes on-time payments on the account, the issuer could transition them to an unsecured card, which requires no deposit and may have a higher credit limit. These cards tend to have higher APRs, and the penalty APR can be especially high. 


This article was originally written on February 9, 2018 and updated on December 10, 2020.

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