As the founder of a budding new company, there are plenty of good reasons for you to consider using a business credit card. Not only can it help you keep personal and business finances separate, it can come in handy covering cash flow, help build business credit, and put money in your pocket through perks and rewards. Here we share some of the best business credit cards for startups.
How to Choose the Right Business Credit Card for Your Startup
When considering a business credit card for your young business, you need to ask yourself a few questions:
- Are you trying to build business credit?
- Do you travel a lot and want travel rewards?
- Are you looking for cash back rewards?
- Do you want a 0% interest introductory APR?
- What are your personal credit scores?
Once you’ve answered questions like these, you can narrow down your choices. For example, if you’re trying to build business credit, you need to ensure that the cards you consider report your balance and payment history not just to the major consumer credit bureaus, but to the business credit bureaus as well.
If you’re looking to earn travel rewards, then you should start by looking for cards that offer a strong welcome bonus. Typically, you’ll earn a large welcome bonus after completing a minimum spending amount within several months, or several billing cycles within account opening. You also want to find a card that offers you a strong reward rate in points or miles for the kinds of purchases your business makes the most.
Likewise, the best card for earning cash back rewards will also offer a valuable welcome bonus and rewards for spending. You could find a card that offers a high rate of return on all purchases, or one that offers bonus cash back for some common business purchases, such as charges from phone services providers, and just 1% cash back on all other purchases.
Business cards with 0% APR promotional financing offers can be available, but they aren’t often as generous as those from personal cards. However, this can be a great way to save money on interest charges while you finance you business operations.
Finally, you have to consider your personal credit history and credit score, as there’s no use applying for a card that you can’t possibly qualify for.
Best Business Credit Cards for Startups
We’ve picked six great business credit cards for startups and categorized them to help you pick the best credit card for your business. Keep in mind that the card offers here may change, and as always, terms apply.
1. Best for Fair or Good Credit:
The is a business credit card that offers credit limits ranging from $1,000 up to $50,000. While many business credit cards require excellent credit scores, this card is more flexible. (In addition, it will be a soft inquiry on your personal credit.) There are no foreign transaction fees.
2. Great 0% intro APR offer: U.S. Bank Business Platinum Card
If you are looking for financing for your startup, a 0% APR credit card may be an excellent option. The offers a solid intro APR: 20 months of 0% APR financing on new purchases and balance transfers, with a 3% balance transfer fee. After that, the standard APR is 11.99% to 20.99% APR, variable. It offers Visa Spend Clarity to help track your spending and manage your expenses, and there’s no annual fee for this card.
*All information about the U.S. Bank Business Platinum Card credit card has been collected independently by Nav. This card is not currently available through Nav. To see what business credit cards are available, please visit the Nav Credit Card Marketplace.
3. Rewards program for Amazon shoppers:
If your business will be regularly shopping on Amazon, AWS or Whole Foods check out the. For startups, an appealing benefit is that you get the choice of extra time to pay when cash flow is tight, or a high cash back rate when you pay quickly on specific purchases.
4. Save with gas rewards:
If your business will take you on the road frequently, you may want a gas rewards credit card. A top pick is the. Great fuel prices already make Costco a popular place to fill up. Save more thanks to the general cash back rewards for fuel purchases: . There is a annual fee with your paid Costco membership.
5. Excellent Airline Rewards Card Welcome Offer:
If you’re a Delta frequent flier, you’ll want to consider a Delta co-branded credit card, which offers cardmembers the opportunity to earn points toward flights, priority boarding, free checked bags and more. If it’s a generous welcome offer you’re looking for, thecan be very rewarding.
6. Rewards and welcome offer:
Thecombines solid cash back rewards with a cash back welcome offer, making it a great choice overall. It also offers a flexible spending limit. Here’s how Amex describes it: “From workflow to inventory to floor plans, your business is constantly changing. That’s why you’ve got the power to spend beyond your credit limit with Expanded Buying Power. Just remember, the amount you can spend above your credit limit is not unlimited. It adjusts with your use of the Card, your payment history, credit record, financial resources known to American Express and other factors.”
How to get the most from a business credit card
Not all cards are created equal. You’ll want to choose one that best fits the needs of your new business. If you’ll travel often, for example, you might want to go with a card that offers great travel rewards, such as points you can use toward airfare or hotel rewards. Sign-up bonuses or bonus points for certain types of spending (at restaurants, for example) can offer even more value the first year.
Cash back rewards are also very popular, as you can spend the cash any way you choose. Some cards, like theoffer cash back on all eligible purchases, with a high cash back limit per year.
Other cash back cards may offer higher cash back rewards in certain spending categories, such as gas stations or office supply stores. Try to anticipate your spending to make sure you choose the right card, but keep in mind you can shop for a new card if your needs change.
If you’re looking to transfer existing debt from a high cost loan or credit card, you’ll want to choose a card with a low interest rate or 0% introductory APR offer. Most credit cards carry a variable APR, and will set the rate at least in part based on the applicant’s creditworthiness. If you decide to take advantage of a 0% APR introductory rate make sure to make your credit card payments on time. Most credit card issuers reserve the right to raise your rate on your business credit card if you pay late. Stay on top of when credit card payments are due, or better yet, set up automatic payments.
A business credit card can also be a great way for a newer business to build business credit. If the card reports to the business credit bureaus (not all of them do), a good payment history will help you demonstrate the ability to make timely payments—one of the first steps to building a good business credit profile (even if your credit is less-than-perfect right now).
Picking the right rewards card will help you leverage the purchases you’re already making to get rewards, discounts or cash back. Before you hit that apply now button, weigh the benefits against the cost of the card. Premium cards such as gold cards or platinum cards will carry higher annual fees, for example, but provide higher tier rewards. Even among specific issuers (such as Bank of America, Chase or CapitalOne), you’ll find they offer several different business credit card programs.
How to qualify for a business credit card for startups
Small business credit cards are one of the few business loans available to startups without at least a year in business or strong business revenues. (And yes, when you carry a balance, you’re accessing a loan; the credit card issuer is the lender.) There are a few business credit cards with minimum business revenue requirements but most will accept income from all sources, and will ask questions about the business as well as personal finances to qualify. Almost every card requires a personal guarantee.
Small business credit cards are typically a better fit than corporate cards when it comes to getting a card for a brand new business. Corporate cards are usually available to established companies with dozens of employees and significant revenues, while small business cards are often available to startups. (An exception is a corporate card from Brex; one of their cards is available to new businesses as long as they also have a Brex Cash account and pay the card daily. In that respect it’s similar to a business debit card.)
What credit score is needed to get a business credit card?
The vast majority of small business credit cards require excellent credit. Many require minimum personal credit scores of 720 or higher, though there are some that are more flexible. Very few business card issuers check business credit scores, though it’s a good idea to build business credit for your startup as soon as possible.
Can I get a business credit card with bad credit?
Only a few issuers offer business credit cards to those with bad credit, and those typically come in the form of secured business credit cards. Secured cards work just like any other card, but they require the payment of a refundable security deposit before you can open an account.
For example, the Wells Fargo Business Secured Credit Card is offered to applicants with bad credit, and it offers a $500 to $25,000 credit line based on the amount of funds deposited by you as security in a collateral account. However, cardholders have the option of earning 1.5% cash back on all purchases, or choosing to earn reward points instead. There’s no annual fee for this card.
*All information about the Wells Fargo Business Secured Credit Card credit card has been collected independently by Nav. This card is not currently available through Nav. To see what business credit cards are available, please visit the Nav Credit Card Marketplace.
If you don’t have a good credit history, you may also want to consider other financing options for startups such as crowdfunding or net-30 vendors; both of which rarely check personal credit.
In addition, you may want to consider a personal credit card available to those with lower credit scores to establish a positive payment history.
Can a new LLC get a credit card?
Yes, you can apply for a credit card for your LLC. Understand, though, that major card issuers will require you to provide personal information when you apply, and will likely require a personal guarantee. Although the card will be issued in the name of the business, the person who applies agrees to be responsible for payments if the business doesn’t repay the debt.
How to get a business credit card for startups
Most startups will apply for a business credit card online, though the bank where you have your business bank account might also offer a business credit card. Small business credit cards are typically a better fit than corporate cards when it comes to getting a card for a brand new business.
Nav’s business credit card marketplace is a good place to start. Business owners that use Nav’s MatchFactor are 3.5X more likely to get matched to a credit card.
What do I need to apply for a business credit card?
You can often apply for a business credit card as soon as you start your business. That’s true even if you are a sole proprietor, freelancer or independent contractor with no employees. However, these cards are designed for small business owners so you will likely need to provide an Employer Identification Number (EIN) for your business, so it’s a good idea to get that from the IRS. (Of course a Social Security Number will also be required for the personal credit check.)
Also, if your goal is to build business credit, keep in mind the details you provide about your business may wind up on your business credit reports, so think about the address and phone number you want to provide.
If you have employees and want to issue employee cards, be prepared with the employee names for those cards. (You can also request them later if you choose.) Most issuers offer free employee cards and allow you to set spending limits on those cards.
Why use a business credit card for my new business instead of my personal credit card?
We’re glad you asked. Here are three significant advantages to using a business credit card for business purchases:
- Having a business credit card allows you to keep your personal and business expenses separate. You’ll be able to track business spending more easily, making tax time, as well as maintaining a company budget, much less of a headache.
- By getting a card in the name of your business you’ll start to establish a business credit score separate from your personal one. That means that if you have to make a late payment, your business credit will take the hit instead of your personal credit (there are exceptions—read about which business credit cards report to personal credit bureaus here).
- As you start to establish a business credit profile, you’ll build your business’s credibility. When it comes time to apply for other business financing, solid business credit scores can help you qualify for more financing at better rates.
- Business credit cards offer superior fraud protection compared to business debit cards, checks or cash.
Some entrepreneurs may be hesitant to use credit because they are afraid they will be tempted to run up debt. In that case, a business charge card can be the best business credit card option for some new businesses. Charge cards must be paid in full each month, making it a good alternative to business credit cards for startups which allow you to carry a balance from month to month.
The National Small Business Association conducted a survey in 2017 that showed business credit cards to be the second most popular source of financing for small businesses. Carefully determine which type of business credit card you need, and join the ranks of entrepreneurs whose mastery of this important resource plays a continuing and vital role in their success.
Can You Get a Business Credit Card as a Startup?
You can always get a business credit card as a startup, and card issuers aggressively market their products to new companies. If you’ve already incorporated as an LLC or as another type of company, you can use your Employer Identification Number (EIN) with your application. Otherwise, you can simply use your Social Security Number (SSN) instead. Either way, startups can use their projected revenue and expenses when filling out the application, which will rely on your personal credit history and personal guarantee.
How to Build Your Startup Business Credit
If you’re using a credit card that reports your balance and payment history to business credit bureaus then you will build business credit with responsible use. This means that you pay your bills on-time and carry little, if any debt.
You also must be incorporated and use your EIN, as sole proprietorships won’t build business credit. Opening a business bank account is another way to build business credit history. And beyond credit card usage, it helps to establish a credit history with other vendors and suppliers who report your payment information to business credit bureaus. Finally, you should continue to monitor your business credit reports to ensure the information there is accurate and up to date.