Our pick for businesses: Ink Business Cash® Credit Card
- Huge $900 cash bonus after spending $6,000 in the first 3 months
- No annual fee
Our pick for businesses: Ink Business Cash® Credit Card
Use our table to compare business credit cards and find the most useful option for your company's needs. To start, select your credit score, select the features you want and the rewards type. Finally, select a specific card issuer if you have one in mind and browse through the selection of cards.
Think about your business spending and cash flow when weighing business card factors that include:
A business credit card is just like a regular credit card but with tools specifically designed to help you streamline and manage your business spending. These tools can range from rewards or cash back for business expenses like office supplies or travel perks for employees on the move.
Also, set spending controls for each employee and monitor their card activity. This can help you streamline your finances and avoid card misuse.
Here’s how to get started with a business card:
Here’s one reason you might use a personal credit card over a business card: Personal cards have more consumer protections from the Credit CARD Act of 2009. These are a few advantages they have that business cards don’t:
If you want a business card, gauge your ability to pay off your debt. The better prepared you are, the more likely you’ll be able to roll with the punches if your provider changes your card terms.
|Business credit card||Personal credit card|
|Credit limit||Typically higher credit limits, depending on creditworthiness||Typically lower credit limits, depending on creditworthiness|
|Build your credit score|
|Personal guarantee||Likely requires a personal guarantee||Personally responsible for debt incurred, along with any cosigners|
Establishing business credit involves a few steps, but it can be relatively simple. Follow these instructions and you’ll be well on your way to getting your business credit scores.
The first step to getting your business credit is to legally separate your personal and business finances. Do this by establishing a limited liability company (LLC), a C corporation or an S corporation. If you’re not sure which to choose, read our guide on how to settle on the right business structure.
After you’ve incorporated, it’s time to get a few more details squared away before you can start building business credit:
There are three main commercial credit bureaus: Dun & Bradstreet, Experian and Equifax. Each evaluates your business credit by compiling information from legal filings, public records and creditors who work with you. Then, they give you numerical business credit scores — typically 0 to 100, with the higher end meaning higher creditworthiness.
You’ll want to establish credit files with each of them:
Here are two of the easiest and most common ways to start building business credit:
Net-30 accounts — that is, those that give you 30 days to pay off purchases — are often good avenues to establish tradelines. These include vendors such as Uline, Summa Office Supplies, Quill, Grainger and Crown Office Supplies.
Each credit agency evaluates a different mix of factors when determining your credit score. However, one of the easiest ways to consistently grow your score is by making payments on time.
Late payments negatively affect your business credit. To avoid that, set alerts or automate your credit card payments. If you consistently pay early and in full, Dun & Bradstreet will likely assign you a perfect score.
The balances you carry on your business credit cards can also affect your credit score. Keep an eye on your credit utilization ratio — that is, watch your balances relative to your total credit. The higher the ratio is, the higher risk credit agencies will assign to you defaulting on your debt. It’s generally recommended to keep your credit utilization ratio under 25% to 30%.
If you’ve got a perfect payment history, working with lenders that report to business credit bureaus can further help you establish your business credit. Before applying or a loan, check with the lender that your payment history will be reported to the credit agencies.
Also, try not to borrow more than you can pay off. Same goes for your credit card limit — don’t use it all at once if you can’t pay it off. With timely payments and responsible borrowing practices, your business credit will improve.
Open new credit accounts responsibly, and pay off what you owe. Update your information with all three of the largest business credit bureaus since you don’t know which bureau a lender will pull your credit from.
Aside from payment history, credit bureaus keep public records, such as bankruptcies, liens and judgments. These records factor into your business scores as well, and can stain your business credit for up to 10 years. Avoid them as much as possible and you’ll help protect your fast-growing track record.
If you’re worried you can’t get a business card with no or bad credit, first be clear on which type of credit you lack — personal or business credit.
You can likely still get an unsecured business credit card without a business credit score. A provider will look at your personal credit score when deciding whether or not to approve you.
It’s more difficult to get an unsecured business card without a personal credit score or with bad credit. A provider might not check your personal credit if you have strong business credit.
If you don’t immediately need a business credit card, start building your personal credit with a credit-building card. Once you improve your personal credit score, you can apply for most business credit cards.
A majority of business credit cards will check your personal or business credit before you can qualify. However, the Brex for Startups card is a new card that won’t check your personal credit. Instead, this card checks your personal income and other financial factors to determine eligibility.
There are a fair number of business cards for bad credit that you might find more obtainable than other business cards. Still, here are a few tips to find one you’re most likely to qualify for.
There are plenty of benefits to using a business card instead of a personal card. A business card can help you separate your personal spending from your business spending. While it may be tempting to rely on your personal credit card for business expenses — especially when you’re only starting out — this can have several unintended consequences. For example, separating your personal spending from your business spending can help you easily differentiate expenses and sort deductions come tax season.
Plus, a separate credit card for your business helps protect your personal assets if your business is incorporated and you find yourself facing a lawsuit. And even if your business isn’t entirely official, a business card offers other perks too:
Yes. In fact, freelancers and private contractors are eligible for business credit cards as long as they can prove their income.
While different card providers have different eligibility criteria, you should be prepared to offer the following information when you apply for a business credit card:
The size of the company these cards are meant for is the main differences between corporate and small business credit cards. This table explains a few other key differences.
|Corporate credit cards||Small business credit cards|
|Who are they for?||Issued to large companies and corporations with more than $1 million in revenue.||Designed for the small business owner with one or two employees with access to a company credit card.|
|Who is liable?||The company is entirely liable for all debt. Before issuing the card, the bank reviews the company’s finances and uses some of its assets as collateral. However, some banks will tailor cards allowing you to choose your liability options.||In most cases, you’re personally liable for any debt you incur on these business cards.|
|Do they report to personal credit?||No. Your personal credit won’t be affected. Instead, all card activity is reported to business credit bureaus.||Depending on which card you choose, the bank may report to personal and business credit bureaus. Your personal credit can take a hit if your business runs into financial trouble.|
Corporate cards aren’t always limited to private entities. Government agencies and nonprofit organizations could find these cards helpful as well.
What’s suitable for your business in its infancy may not work long-term — especially if your business experiences rapid growth or a sudden change in trajectory. One reason you may want to consider swapping card providers is if your business has outgrown your current card’s credit limit. Or perhaps your business checking account is stationed with another bank and there are perks or incentives for combining your accounts.
A practical way to evaluate whether your current card serves the needs of your company is by reviewing your business expenses and spending habits. Does your current card offer perks and rewards that benefit your business? Would it be possible to snag a lower APR by switching providers?
Just because a particular card worked for your startup doesn’t mean it will continue to work for your business two, three, five or ten years down the road. The bottom line? Don’t be afraid to switch it up.
Here’s a quick side-by-side look at some of the cashback business cards available.
Can I get a business credit card if I am self-employed?
Yes, with the current shift in the labor markets towards a gig economy, credit card companies including Chase, Capital One, American Express, and many others issue business credit cards to self-employed individuals. I would like to caution that one should keep in mind that different credit card companies have different policies with regard to issuing business credit cards for the self-employed. Depending upon individual needs, one can find the best fit for their business and establish in-depth understanding of what they are signing up for.
Can anyone get a business credit card?
My bank required that I submit a business tax ID number in order to get a business credit card. I believe this is typical and helps to validate that the business is legit. Even single-person businesses get tax ID numbers as they create a registration for the business and can help with sales tax exemptions and business income tax deductions. Because my consulting business is an LLC that is treated as a sole proprietorship, the creditworthiness of my business is based on my personal credit score.
Businesses of all sizes can get business credit cards. It’s pretty typical for employees of any size firms to have a business credit card to use for travel and what would otherwise be classified as reimbursable expenses.
What are the benefits of having a business credit card?
The biggest benefit that a business credit card has versus a personal one has to do with the amount of credit offered. As you can imagine, one of the biggest and most-frequent business issues, especially in small to mid-size businesses, is cash flow. Some business credit cards offer credit up to $50,000, which allows for a great deal of flexibility for the business owner. Furthermore, if the business pays its credit card debt promptly, it boosts its credit rating which may result in them getting better terms (for example, dating) from its suppliers.
How do you determine if an annual fee is worth paying?
People hate annual fees. Since consumers have a huge choice of no-annual-fee cards, why would anyone pay for something that they can get for free? The answer is, it depends.
Premium business credit cards often have perks and benefits that regular cards don’t. You can get higher rewards (cashback) earning rate, sign-up or annual bonuses, travel, dining or entertaining perks, concierge services, additional insurance coverage, or discounts on various shopping categories.
Depending on your lifestyle and spending patterns, it might make perfect sense to pay for a credit card, if you can get more in perks and benefits from it than from a no-annual-fee card. As a business owner, you are more likely to charge higher expenses on your credit card, so, even with an annual fee, the rewards or cashback you reap can be significantly higher.
Why would someone choose a business credit card over a personal credit card?
A business card may come with perks that you can’t find on a personal card (e.g. 5% back at office supply stores).
Also, some business credit card issuers only report to commercial credit bureaus. This means a business credit card application might not affect your personal credit score.
New credit inquiries can impact up to 10% of your score. Avoiding a personal credit inquiry may help when applying for additional loans or personal credit cards.
Why do I need a business credit score, and how is it different from a personal score?
Similar to loans for individuals, lenders want to know as much as possible about a borrower before approving a credit card application.
Business credit scores work like personal scores in many ways but different companies monitor them. On-time payments and keeping revolving balances (credit cards, lines of credit) low is key.
However, when you are looking for a credit card for a small business, your personal credit score is likely a factor as well.
When is a business card a good idea?
Business credit cards can help small businesses track how much they spend, on what, and when. They can also serve as a “cash flow buffer” for most firms that often have to spend now and collect from their customers later. This seemingly free additional spending power and flexibility comes at a high price, though: interest and the risk of unnecessary spending. When businesses cannot pay off their credit card balances in full every period, mounting credit card debt can become a problem itself, much like what consumers face.
Can small business owners use a regular credit card for their business?
One needs to keep business and personal accounts separate. A small business owner can use a personal credit card for business purposes, but after evaluating the factors listed below:
Can you get business credit with bad personal credit?
The short answer is yes. It’s more difficult, and you’ll have fewer options. You’ll likely have a higher interest rate than someone with better personal credit. The amount/credit limit on some of the business cards you can get may be low. In the end, business cards are personally guaranteed — so if there is default on a business card, you’re liable for it.
What is the difference between a business and personal credit card?
Business cards may have larger credit lines, better perks for travel and points, and are a good way to establish business credit. However, they may require an annual fee, have higher interest rates, and may require a personal guarantee of repayment. This means that your use of credit for your business could affect your personal credit score.
Personal credit cards don’t usually have annual fees, have a smaller annual percentage rate, and may have a smaller initial credit line.
Probably the most important thing to remember about the difference is that business cards can hurt your personal credit but probably not improve it. Where personal credit cards and personal credit can help you establish business credit.
Does a consumer need a business to open a business credit card?
No, a consumer doesn’t need to start or own a business of any size (large or small) to apply for and open a business credit card. Business credit card providers, while geared for small business owners, are typically open to providing access to business credit cards to small businesses and individuals. With a good credit score, an individual can be the proud owner of a business credit card.
Here are our top picks for 2021.
Ensure your personal assets remain secure while still getting your business the credit it needs.
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