How to Apply for a Business Credit Card

How to Apply for a Business Credit Card

How to Apply for a Business Credit Card

A business credit card can offer you a myriad of flexibility. Business credit cards can help you manage cash flow and separate your company expenditures from your personal spending. You can also get quick access to liquid capital for funding your daily operations, as well as business-specific rewards and benefits not available on a personal credit card. 

Who Can Apply for a Business Credit Card?

Anyone with a business can apply for a business credit card. But, contrary to what most think, you don’t need an office or a certain number of employees to be considered a business. In fact, you don’t even need an LLC or a corporation to have a small business credit card, you can apply as an unincorporated sole-proprietor.  

Anyone with a for-profit endeavor can obtain this type of credit card, including gig workers, freelancers, online sellers, and more. As long as you’re making a profit, or just intend to, then you can be approved for a small business credit card. 

When Should You Apply for a Business Credit Card

You can apply for a small business credit card as soon as you start your business, even if you haven’t had any revenue or expenses yet. And if you’ve had your business for a while, here are some circumstances when you should consider applying for a business credit card: 

  • You want to simplify bookkeeping: The first business rule is to keep your company and personal expenses separate. This will protect your personal finances if there are any legal troubles with your business down the line. While many entrepreneurs start by using their personal credit to make business purchases, know that it can complicate your life immensely when tax time rolls around. 
  • You want to build business credit history: Having a solid credit history is necessary to obtain financing when the time comes to scale your business. The process of establishing good credit is long and slow. The sooner you can start, the better. Making business purchases through your business credit cards, then paying off the balance on time each month will help you to develop good credit for your business. 
  • You need an extra source of funding: Whether you need funding for more upfront inventory, or if you want to amplify your presence through a bigger marketing campaign, having a business credit card offers you working capital that you can use to solve your business needs. Plus, many business credit cards offer 0% APR introductory financing on new purchases, balance transfers or both. So you will be able to make the new purchase without being charged interest on your balance during the introductory financing period. 

What You Need to Apply for a Business Credit Card

Every credit card issuer has a different application, but most will ask for applicants to supply the following information: 

Business information. You will need to provide the following information about your business including it’s legal business name, mailing address and phone number. You may also need to provide the industry type of your business and its legal structure such as corporation, LLC, non-profit or  sole proprietorship. Other common questions include how long  you’ve operated your business and how many employees you have.

Revenue and Tax information. You will likely be asked a few questions about your business’ finances. This can include your company’s annual revenue, and the amount you expect to spend each month on business expenses. You’ll also be asked to supply your company’s employer identification number (EIN). If you don’t have an EIN, you can supply your Social Security Number (SSN) instead. 

Personal information: You will be required to enter your legal name, contact information, total annual income, and your Social Security Number. This is so that the credit card issuer will use this information to check your personal credit score. 

The Business Credit Card Application Process

When you apply for a small business credit card, your application will go through several stages. 

The Application Stage. Once you’ve gathered the required information, the business credit card application process becomes much easier. You can apply in person through your preferred credit card issuer’s local branch office or fill out an online application. 

The questions will revolve around your business structure, revenue, and personal information during the application process. Note that if another person has an ownership of 25 percent or more in your business, you’ll be required to provide their information too. 

The verification stage. Once you’ve submitted your application, expect the provider to check your personal credit with one or more of the three major consumer credit bureaus, Equifax, Experian, and TransUnion, to obtain your credit score, payment, and debt history. They will also look at your reported income to make sure you can afford a credit card. 

The decision stage. Your credit history and the submitted information will be analyzed to see if it fits the credit card issuer’s eligibility requirements. If your credit score isn’t excellent, then the  card you qualify for may have lower perks and higher interest rates. Cards with higher perks have stricter standards. 

Once they make a decision, you’ll be notified. You may receive instant approval online and be mailed a physical credit card within 7 to 10 days (the exact number of days may differ based on the bank). Or you could receive your denial in the mail. If your application is denied, you’ll be provided with a reason.

The reconsideration stage. If your small business credit card application is initially denied, then you can still contact the card issuer to have it reconsidered. Often, applicants are able to provide new information or clarify their application, which can result in approval.

What are the Qualification Criteria for Business Credit Cards

Business credit card applicants must have good to excellent credit to qualify for most cards. That means a FICO® score of 670 or up. Those with a lower credit score may qualify for a card with a smaller credit line or a secured business credit card that requires you to make a cash deposit upfront that will be used as a security deposit. 

How to Choose the Right Business Credit Card

Here are some factors to consider when researching and analyzing your options:

  • Rewards: Review your business transactions of the past six months to identify your biggest spending areas and choose a credit card that gives the most significant perks when spending in those categories. For example, if you travel a lot for business, pick a card that provides cashback, gift cards, or reward points for airfare, office supply stores, and gas station purchases. 
  • Sign-up bonuses:  While you may be inclined to pick the card with the biggest offer, remember that you’re not getting the bonus just by signing up for the credit card. You’ll have to qualify the welcome offer by meeting the spending requirement. If you have a big purchase coming up for your business within the first few months of getting your card, then you may be able to use that purchase to earn the bonus. 
  • Annual fees: Credit cards with a high annual fee typically come with more generous rewards. But determine whether what you’ll be spending will unlock enough rewards to justify the yearly fee. It’s also worth considering the perks offered by the card that can make up for the annual fees paid.  
  • APR: Annual percentage rate (APR) refers to the interest charges on your balance if you don’t pay it off each month. You might be eligible for a low-interest rate if you have an excellent credit score. But having a lower credit score may mean receiving a card with a higher APR. If you’re worried about incurring interest charges, then consider a credit card with a 0% APR introductory financing offer.
  • Foreign transaction fee: If your business takes you abroad often, or you make purchases that are processed outside of the United States, then you’ll want to have a card with no foreign transaction fees. Unfortunately, many cards impose a 3% fee on all foreign transactions, but there’s a growing number that don’t.

Bottom line

Whether you own a large or a small business, or you’re merely a freelancer, having a dedicated card for your business expenses can reward you in many ways. By taking the time to find the right business credit card for your needs, and learning how to apply for it, you can enjoy one of the most valuable business tools available.

This article was originally written on February 3, 2022 and updated on February 4, 2022.

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9 responses to “How to Apply for a Business Credit Card

  1. I just signed up for a credit card specifically for my biz and got accepted. I am glad this one was essentially my biz applying and me as the cosigner. Now, just wondering, as I build biz credit, is there a length of time, in which the biz alone can do the applying and i am removed as a personal guarantee? Is there a best practice you could suggest or specific cards to apply for beyond basic parties like Staples, etc? Thanks in advance.

    1. Each lender has its own policy with regard to personal guaranties. It may depend on type of loan, lender policy, and business factors such as time in business and revenues. Keep on building business credit, along with growing revenues and time in business will help over time.

  2. Are you able to list business credit card that actually report to the business credit bureaus only? Many credit card companies only report when you are late, and they want to report to the personal credit report. If they are willing to report late payments, the credit card companies should also be willing to report positive payment history.

        1. Not exactly. The EIN is a tax id number and may be requested at certain times, while the DUNS number is traditionally used for federal government contracting and grants, as well as your business credit identifier with DNB. They will likely be requested in different contexts.