How to Get a Business Credit Card

How to Get a Business Credit Card

How to Get a Business Credit Card

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A business credit card can be an incredible tool for your company. The right credit card offers you a convenient way to make purchases, a line of credit to extend payment, valuable rewards for spending and useful perks. Using a business credit card is also a great way to separate your business expenses from your personal charges. You can also add employee cards to extend your purchasing power to them. 

However, many people are unsure how to apply for a new credit card for their small business. Thankfully, applying for a small business credit card may not be as hard as you think.

5 Steps to Get a Business Credit Card

Assuming you meet the basic criteria of being a business owner, these five things can help you down the path towards approval:

1. Check Your Personal Credit Score

Most small business credit cards rely on the personal guarantee of the business owner, so it’s important to understand your credit profile before applying. By checking your personal credit score, you can get a better idea of what cards to apply for or what outcome  — approved or denied — you’ll likely encounter. For instance, most business credit cards will only approve applicants with good to excellent credit. 

That’s not to suggest that you won’t be eligible for a credit card if you have average or below average credit. There are numerous options available to those who look; however, keep in mind that they typically have higher interest rates and fees, fewer benefits. For example, there are some secured credit cards for small business owners who have a very limited personal credit history, or who have had significant credit problems. 

As a consumer, you’re entitled to a free annual credit report from the three major consumer credit bureaus — Experian, TransUnion, and Equifax. You can request a copy of each of your credit reports by going to annualcreditreport.com

On the other hand, you don’t get that same benefit when you request a credit report for your business entity. But you can go to each of the top business credit reporting agencies — Experian, Dun & Bradstreet, and Equifax — and request a report, though you may have to pay for them. 

Fortunately, you can also get a free copy of your business credit scores and reports by signing up for a Nav account.

The relationship between personal credit and your business finances

Separating business and personal finances is a cardinal rule of entrepreneurial finance, so why should it matter what your personal credit score is?

Despite designation as a “business” card, most issuers will require the card be back by a personal guarantee. In other words, if the business fails to meet their debt obligations, the primary cardholder will become personally responsible for the debt. 

But what if your business is classified as an LLC, S Corp, or C Corp? Though these classifications typically protect your personal assets should you encounter a legal issue, like a customer lawsuit, they don’t supersede the personal guarantee as it relates to credit card debt.

2. Gather Your Business Details

Regardless of which business credit card you apply for, you’ll be required to provide basic information about your company. This includes the legal name of your business as well as its address and phone number. It’s likely that you’ll also need to provide your Social Security Number (SSN) as well as your company’s Employer Identification Number (EIN). If your company doesn’t have an EIN, many credit card issuers will accept your SSN instead. 

In addition, many business credit card applications also include fields for several of the following:

  • Annual business revenue, or projected annual revenue if you’re a new business.
  • Number of years (or months) in business.
  • Number of employees (“1,” if it’s just you).
  • Industry type, with options typically available as a dropdown list. 
  • Your role in the business .
  • Estimated monthly spend, or how much you plan to use the card each month. 

If you’re a new business owner, answering these questions about your revenue or time in business may be intimidating. However, don’t be tempted to misrepresent yourself. Being a new business owner is not a disqualifying characteristic, and some card issuers even advertise their products to those who are just starting their business.

3. Check the Credit Score and Other Requirements of the Card(s) You’re Applying For

One way to improve your odds of approval is to find cards that fit your profile. Most credit card companies base approval on a variety of factors, but typically the applicant’s credit score plays a major role. Other factors may include the applicant’s debt-to-income ratio and, surprising to some, the number of cards they’ve applied to in the last year. 

This is particularly the case for small business credit cards issued by Chase, as they’ve created the “Chase 5/24” rule. Under this undocumented rule, card applicants who have opened five or more cards from anny issuer within the last 24 months will automatically be denied. However, small business credit cards don’t count towards this limit. 

Understanding these requirements and qualifications can certainly be helpful, but unfortunately, they aren’t always easy to find. Some credit card issuers, like Capital One, are very upfront about credit score requirements. Other issuers are less straightforward.

If you can’t locate the requirements as they relate to a specific card, and calling the issuer does not provide any further insight, then you can likely find some information through various financial resource sites, like Nav. Many of these sites offer basic insights about known card requirements, including the average score of approved applicants(e.g., fair, good, excellent).

4. Sign Up for Nav to get Pre-Matched and Pre-Qualified

Are we plugging our own business here? Yes, but that’s because our mission is and always has been to offer business owners the tools and resources to make the best financial decisions, like which business credit card to choose. This includes offering transparency across the small business ecosystem and aligning the needs of small business owners with lenders and partners. 

When you sign up for a free Nav account, we’ll securely sync your data, including your personal and business credit scores and, with the help of our MatchFactor technology, pair you with the best financing options. This means you won’t have to spend valuable time sifting through credit card applications. We’ll do the work for you.

5. Fill Out the Online Application

You’ve checked your credit score, collected all the required business information, and found the small business credit card that most closely aligns with your credit profile, business plans, and maybe even ultimate rewards program preferences. Now it’s time to apply.

Today, credit card applications are almost always available online, meaning you can apply from your phone, tablet, laptop, etc., and often within minutes. Typically, these applications are pretty similar — enter your name, business information, and answer any additional questions regarding your business, like a number of employees and industry type. 

Once you’ve completed the application, you can submit it, and in many cases, receive notification of approval within a few seconds to minutes. However, in some cases, you may not receive an instant decision; instead, your application will go into pending status. 

This does not mean you were denied. In some cases, the issuer may need to verify information, there may have been inconsistencies or mistakes on your application, or the issuer’s application platform may simply be overloaded. 

Rather than waiting to receive notification of approval or denial via email or mail, you can often receive a decision immediately by contacting the card issuer’s reconsideration line. This will give you an opportunity to discuss your application with a representative, and supply information on any details of your business that weren’t clear from your application. You might be surprised to realize that many card issuers have a manual approval process, and that the person you speak to may be empowered to approve your application over the phone.

Tips for Choosing Which Business Credit Card to Get

When choosing a small business credit card, there are many factors that can affect your decision. For example, some business owners prioritize having a card with no annual fee. But while these cards can make sense for those with limited spending requirements, the cost of the annual fee is often justified by the rewards and benefits offered by premium cards that charge an annual fee. And depending on your type of business, finding a card without a foreign transaction fee is also critical. For example, a card without this fee is vital for international business travelers as well as those that make regular purchases that are processed outside of the United States. 

Many business owners want a rewards credit card, to earn valuable points, miles, or cash back. These cards will have higher standard interest rates than non-rewards cards, so a rewards card won’t be ideal for those whose business needs require that they pay over time. But if you do look for a rewards card, you want to make sure that you receive the most valuable returns on your most frequent business purchases, such as those from office supply stores, gas stations, and telecommunications services providers. Also, look out for cards that have spending limits on bonus purchases each calendar year. 

But if your business will need to carry a balance, you will want to look for a card with a 0% intro APR offer. This will allow you to avoid interest charges on your eligible purchases for some period of time, typically 6-18 months. You’ll also want to look for cards with a low standard APR. But note that nearly all cards have a variable APR, which can rise and fall with the Prime Rate.

And if your personal credit isn’t good or excellent, then the most important factor will be finding a business credit card for fair or bad credit.

Why Get a Business Credit Card?

Few small business funding options are as valuable and versatile as the right business credit card. Manage gaps in cash flow? Check. Maximize regular spending on common things like office supplies to earn bonus points, and benefits? Check. Provide relief in the face of unexpected expenses. Double check. 

Responsible use can even help you build your business and personal credit, opening up even more financing opportunities. This versatility is perhaps why, according to Mercator Advisory Group, credit card usage among small businesses is expected to approach $700 billion by 2022

Despite the value this type of small business funding can provide, finding and applying for the right card can be complicated. There’s a seemingly endless array of cards businesses can choose from, and even after diligent research, the key to approval can be a mystery. Many credit card companies provide vague, if any, information about exact eligibility requirements. 

While there’s no surefire way to ensure that you’re always approved for your card of choice, there are a few things you can do to find cards that fit your credit and financial profile and increase the odds of approval.

Can Anyone Apply for a Business Credit Card?

Before we dive into the “how to get a business credit card” part, let’s take a minute to discuss some basic requirements, namely what sets a business credit card apart from a personal credit card and whether or not you meet that primary eligibility criteria. 

In order to qualify for a business credit card, you must first be considered a business owner. In some cases, eligibility is obvious. If you are the owner or part-owner of an LLC, C-Corp, or S-Corp, and therefore have an EIN, you can apply for a business credit card. 

But what about if you’re a freelancer or an unincorporated sole proprietor who doesn’t have an EIN? Or, what if you are a single-member LLC and didn’t apply for an EIN? Can you apply for a business credit card if it’s just you running the show? 

The answer is typically yes.If you engage in a for-profit activity, whether it be selling your wares online or tutoring a few students, you can likely qualify for a business credit card. In this case, you’d rely on your SSN instead of an EIN, though you will still need to provide any required information about your business (e.g., revenue, time in business, etc.).

Do You Have to Have an LLC to Get a Business Credit Card?

No, you do not. If you are an unincorporated sole proprietor, then you can simply apply using your SSN instead of an EIN. You can also be incorporated as something else that’s not an LLC, like an s-corp.

How to Apply for a Business Credit Card with an LLC

Limited liability corporations, or LLCs, are a common business structure that offers liability protections without some of the paperwork and complexity of corporate entities.

Though LLCs can and often do have EINs, they aren’t always required. That’s particularly true of a single-member LLC. In that case, you can typically apply for a business credit card with your SSN, essentially treating it as an unincorporated sole proprietorship. However, if you’re a multi-member LLC; you have employees; file Employment, Excise, or ATF taxes, you will need to apply for an EIN and use it on your credit card application.

Why Applying for a Business Credit Card with an EIN can be a Good Move

If you have an EIN and are not exempt from using it for tax purposes (e.g., single-member LLCs or a sole proprietor), you’ll need to include it on your credit card application. However, even if you aren’t required by the IRS to have an EIN, you may still want to consider using it on any credit applications.

One of the primary reasons for this is that it inextricably links your credit card activity to your business, which means you’ll be able to build business credit. In fact, responsibly using a business credit card is one of the primary ways you can improve your score. 

Does that mean you won’t need your SSN at the time of application? Probably not. Because most credit cards require a personal guarantee, and because your SSN is used to obtain your personal credit report, you’ll likely still be required to include it. Don’t have an SSN?  Learn more about your credit card offers here

A better business credit score, along with other factors, can help you get lined up with more preferable options like unsecured credit cards. Otherwise, you may have to apply for secured credit cards.

Can You Get a Business Credit Card with No Revenue?

Yes, you can apply for and receive a business credit card even if you’ve just started your business and have no revenue. Credit card companies are still eager to offer you a card, so long as you have the personal credit necessary to qualify. 

Can You Get a Business Credit Card with Bad Credit?

Since business credit cards will rely on your personal guarantee of repayment, most of them will require you to have a good or excellent personal credit score. But if you don’t have strong personal credit, then you could apply for a secured card for small businesses. These cards require the payment of a refundable security deposit, but otherwise work the same as a standard, unsecured credit card. 

Check out our list of business credit cards for bad credit.

Best Business Credit Cards for Startups

If you’re an LLC or a sole proprietor, and you’re in the early stages of business development, then there are a lot of reasons a credit card can be a valuable tool in your financial arsenal. However, some small business cards may be better suited to meet your unique needs than personal cards. 

For instance, if your goal is to finance a big purchase and you want to cut down on interest, you may want to look for a business card that has a 0% introductory APR offer for qualifying new purchases, balance transfers or both. Similarly, if you’ll be jet setting from place to place to woo clients or perform other business-related tasks, a card that allows you to earn travel rewards points, miles, cash back, or hotel stays for your travel may be a good choice. Many small business cards offer generous welcome bonuses, but require you to spend a certain amount after account opening.

To help you decide which card is best for you, check out our list of best business credit cards for startups

How Do I Build Business Credit for My LLC, Partnership, or Corporation?

Regardless of what type of small business funding you seek, be it credit cards or small business loans, your business credit score will play a big role in the chances of approval as well as the rates, credit limits, and terms you receive. It also can affect the number of choices you have, as good to excellent credit will make you eligible for far more credit products than fair or bad credit.  

  1. Request a copy of your business credit report, check it for errors, and identify any accounts that need your attention. 
  2. Make payments on time, every time. And, if you can, you may even want to consider making payments early. 
  3. Keep credit utilization low. 
  4. Open a business credit card and make regular, on-time, payments. This can help establish a positive repayment history and increase your available credit, assuming you keep balances low (if you choose to carry a balance).

This article was originally written on June 27, 2019 and updated on February 18, 2022.

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