Among the array of financial tools available to business owners, a business credit card stands out as a versatile way to help manage expenses, access credit, build a credit history and access additional cardmember perks. In this article, we’ll share how to get a business credit card and what you may want to know about the application process.
Before you apply for a business credit card, you’ll want to assess your eligibility. Typically, criteria includes factors such as the legal structure of your business, its revenue and credit history, which might include the business’ credit score, your personal credit score, or both. You’ll likely want to ensure your business is properly registered and you have the necessary documentation to support your application.
Sole proprietors, partnerships, LLCs and corporations can all apply for a business credit card. You’ll want to note that each type of entity may have different requirements or documentation needed for the application process.
Additionally, freelancers, gig workers or other service providers who run their business from home can also apply for a business credit card. In some cases, you may need a tax ID, or an Employer Identification Number (EIN) to apply for a card, but this may not always be required. The EIN is assigned by the Internal Revenue Service (IRS), to identify a business for tax purposes and distinguishes the business entity from an individual taxpayer. If you find that you need an EIN, business owners can apply for an EIN online through the IRS website.
There are several types of business credit cards to consider, including:
When comparing business credit cards, you may want to explore cards tailored to your specific industry or business needs. For example, if your business requires a lot of travel, you may want to consider applying for a business credit card that offers rewards for every dollar you spend at gas stations, airlines and hotels. Some cards may even offer cardmember perks like complimentary membership to airport lounges, which could come in handy for frequent business travelers. In addition, you may also want to consider annual fees as well as factors that could affect the way you use the card, such interest rates, and rewards programs.
Once you've reviewed your eligibility and chosen a business credit card that suits your needs, you can start the application process. You can usually apply online or possibly in person at a bank or credit card issuer. Be prepared to provide information about your business and personal details. Some credit card issuers may require additional documents, such as financial statements, to verify your business's creditworthiness.
Here is a list of business information you’ll likely need to provide in your application:
Credit score requirements for business credit cards can vary by issuer and card type. Generally, a FICO ® Score of 670 or higher is considered a good credit score for a business credit card. However, some card issuers may require higher credit scores or have stricter credit requirements. Having a stronger credit score may positively impact your application.
After you submit your application, the credit card issuer will review your application and credit history. If you're approved, you'll receive your new business credit card in the mail and you’ll need to activate it by following the instructions provided by the issuer. If your application is denied, the issuer will send you a letter explaining the reason for the denial.
Effectively manage your business credit card account by making payments on time and maintaining good credit practices to build a positive credit history. This may improve your business credit score over time and make way for higher credit limits or more ideal terms on any credit you apply for in the future.
Getting a business credit card can be a valuable tool for managing expenses and building credit for your business. Choosing a business card that aligns with your business needs and understanding the application process can set you up for making the most of your business credit card.
