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Apply for a card that rewards your business spending and keeps purchases in one place.
Running a small business efficiently means overseeing every aspect involved in keeping it afloat, especially the cash that flows in and out.
If you’re currently using your personal cards to fund your business — or are interested in finding a card that rewards you for your business spending — consider upgrading to a strong business credit card that helps you focus on taking your success to the next level.
Find the right business card
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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.
The flexibility of a revolving line of credit — and the option for a cash advance — make credit cards useful tools for small businesses, helping to support your livelihood in a short-term cash crunch.
What to look for in a small business credit card
Look for a credit card that can earn you reward points or cash back on your largest small business expenses — like travel, gas or office supplies. You’ll even find cards that allow you to earn point or dollar multiples on categories that rotating quarterly or annually.
If you’re already in the market for a card, you might as well look for the strongest intro incentive you qualify for. Signup offers are plentiful and often easy to meet, helping you jump-start your rewards with bonus rewards or cash back. Whereas a low or 0% intro APR can soften the blow of large investments in your business, such as laptops or furniture for your office.
To establish or build your business’s credit score, focusing on cards that report your responsible spending to all three credit reporting bureaus can set you up for long-term success.
Why choose a business credit card?
A small business credit card can help finance your business and increase your working capital. But a good one can do much more.
If you’re still working on establishing your credit, a business card can offer easier access to credit when compared with other types of business funding. Some of the best small business cards online require only basic business and personal information and typically offer conditional approval in minutes.
If you spend a lot each month on office supplies, travel to clients or other business needs, a business card can earn you cash back to reinvest into your business or travel rewards to cover the cost of frequent trips.
A credit card you use only for your small business can provides a simple solution for managing your spending, with many offering ways to integrate your transactions into existing accounting software. It can also offer peace of mind for tax season, keeping all of your expenses and potential write-offs conveniently in one place.
A credit card offers small business owners constant access to funding, preventing you from having to reapply for financing each time you need to make a new business purchase. It can be useful for monthly recurring expenses as well.
With responsible spending and on-time payments, small business owners can work their way to a stronger overall business credit history. If you ever need the financial boost afforded by a business loan, a high credit score can land you the lowest rates and largest amounts.
Credit cards providers know that businesses are important for their own bottom lines. And so they typically offer higher credit limits to small business owners than for personal credit cards. Higher limits can provide purchasing power without having to pay down your balance to free up available credit.
With most business cards, you can link additional cards for your trusted employees to your account. These cards can not only make it easier for them to more easily do their jobs, but you’ll also rack up any rewards or cash back more quickly. A solid business card will also let you monitor and limit spending for individual cards — by amount, date ranges, even geographic area.
Business and personal credit cards are alike in lending approved borrowers a revolving line of credit that’s paid back each month, often with interest. Each also offers perks like rewards and interest-free promos.
However, they’re different products with advantages that go beyond merely separating your business and personal finances.
Business credit cards
Typically offers higher credit limits with flexible repayment.
Programs reward your business spending.
Generally, interest on business expenses is tax-deductible.
Some cards integrate tools to organize expenses.
Helps you build business credit.
Can hurt your personal credit if used irresponsibly.
Offers few protections on your purchases.
Personal credit cards
Often a stronger option for balance transfers.
Covered by consumer protection laws.
Helps you build personal credit.
Can be difficult to categorize expenses.
Separating out taxes for business could be confusing.
A key difference is that the Credit Card Act and other consumer protections do not apply to business credit cards. It doesn’t mean you’re out of luck: Most providers extend these protections to business customers as a courtesy.
But you’ll want to understand your business card contract, especially terms related to interest rate increases and late fees. Business providers are not required to notify you in advance of increases or cap late fees at a reasonable amount.
Can I use my business credit card for personal expenses?
Yes, but we don’t advise it. For starters, a top benefit of a business credit card is organizing your business spending. When it comes time to work out accounting and taxes, you’re a step ahead with business spending on designated card. You also decrease the risk of your business spending affecting your personal credit score.
On top of that, if potential lenders or credit bureaus find out that you’re using a business credit card for personal purchases, it could potentially signal to them that you’re not able to successfully manage your expenses.
How to compare the best credit cards for small business
Are you planning to invest in your business? Do you need to pay off debt? Would you like a stronger cash flow?
Think about your business spending and cash flow when weighing business card factors that include:
Annual fee. Consider how much you’re willing to pay to use a business credit card each year, and determine if any perks are worth the price. A high annual fee doesn’t mean a card isn’t a contender for your business — it could potentially provide you with invaluable rewards, tools and more.
APR. A high APR means you’ll pay more interest on any balances you carry over each month. A low interest rate can minimize the cost of borrowing money with your credit card.
Promotional interest rate. An intro purchase APR can help you avoid paying high interest rates on big items or balances you transfer from other cards. But pay close attention to the length of your intro period to avoid getting hit with a heap of interest when the rate reverts to your everyday APR.
Cash back and rewards. Choose a business credit card that can earn rewards on what you buy most. Look for cash back, miles or points in categories that fit your needs.
Foreign transaction fees. If you travel internationally on business, a card that waives foreign transaction fees can save you big. Many providers charge 2% or more for each purchase made outside the States.
Signup bonus. The business card market is fierce, with many providers offering generous bonuses to entice you to choose theirs over competitors. Most come with spending requirements that are easy to meet with regular use.
Premium benefits. Rewards aren’t the only perks. You could get access to priority airline boarding, waived bag fees and other travel extras. Just make sure your business can take advantage of what your card offers.
Read the fine print. By taking on a business credit card, you’re agreeing to specific terms and conditions. Read and understand your card’s contract as you would any others for your business. If you don’t fully agree with what the provider requires, consider a different business card.
Kait signs up for a bonus — and covers her business in Cali
Kait recently started a luxury travel company on the East Coast that books vacations for clients all over the world. Tired of using her personal credit card, she applied for the Chase Ink Preferred℠ credit card. She liked the 80,000-points bonus, which she easily qualified for after spending $5,000 in the first three months of using her card.
She redeemed those 80,000 points — about $1,000 when used toward travel — to pay for a business trip to California, reinvesting the money she saved into her business’s success.
What credit score do I need to get a business credit card?
Applicants with a good or excellent credit score of 670 or higher will find several business card they can find approval for. Among the business credit cards out there, you’ll find those with less strong credit histories too.
When weighing your options, first read the provider’s requirements to make sure you’re eligible. That way, you avoid unnecessary hard pulls on your credit history, which can temporarily lower your overall score.
Lenders typically beyond your personal credit score to focus on your business’s annual revenue, among other factors. After you’ve built up your business’s credit score, you’ll be in a stronger position for approval on business loans with low rates and long repayment terms.
Your personal credit score is different from your business credit score, though lenders may rely on both when reviewing your application for business credit. Each score reveals to potential creditors how you handle different type of financing.
Typically, yes. If you’re having trouble with approval for an unsecured business card, look for a secured business credit card.
These card requires a deposit either at application or after approval that then becomes your line of credit. If you fail to make payments or otherwise don’t meet your end of the card’s agreement, the lender can use your deposit as collateral to pay off your debt.
Secured credit that’s managed responsibly will generally increase your credit score and typically leads to the ability to apply for or graduate to an unsecured credit card in the future.
How to apply for a business credit card in 4 steps
Applying for a business credit card is not much different than applying for a personal credit card. Any owner or sole proprietor of a business can submit an application for a business card using their Social Security number.
While the process can vary slightly, you can set yourself up for successful approval with a few easy steps.
1. Know your credit score.
Most applications for credit depend on your credit score — even for businesses. The credit provider typically weighs both your personal and business credit score, if you have one, to determine whether you’re a trustworthy borrower.
If you haven’t established a history of business credit, you may still be eligible. Just read the card’s eligibility requirements to be sure.
2. Select the best card for your small business.
Compare business credit cards that you’re eligible for against the financial needs of your day-to-day business operations. Look for perks like flexible repayments, rewards on your spending and business management tools.
3. Complete the credit card application.
When applying for a business credit card online, you’ll provide your personal contact information and business details that can include detailed financials.
Name, address and phone number
Social Security number and date of birth
Email address
Total current debt
All that’s left is reviewing your card’s terms and conditions and signing the application.
Do I need a personal guarantee for a business credit card?
It’s likely. Most business card providers require a signed personal guarantee for approval. This guarantee is a promise between you and the creditor that you’re personally liable for your business debts.
This agreement protects the creditor from any unpaid debts on the card but exposes you to seizure of your personal finances or assets if you find yourself unable to pay back what you borrow.
4. Learn the provider’s decision.
If approved, you’ll receive your business credit card by mail in about 10 business days. After, it’s just a matter of activating your card online or by phone with the provider.
Review your monthly statements, and pay at least the minimum on time to keep your account in good standing with the credit card issuer. Always keep tabs on your credit limit, especially if there’s a fee for exceeding the limit. What’s your credit score? Compare cards now
Am I eligible for a business credit card?
Generally, if you do business or receive payment for your services, you’re eligible to apply for a business card.
Freelancers
Sole proprietorships
Hobbyists
Partnerships
Side hustles
C-corps
S-corps
You don’t necessary need to turn a profit to be eligible. But if you can provide projected revenue numbers in your application, it could help your chance of approval.
How to make the most out of your business credit card
You’ve got your card in hand, and you’re ready to start making it work for your business. Take advantage of all that a business card offers by keeping in mind a few key elements.
Look for a credit card that can earn you reward points or cash back on your largest small business expenses — like travel, gas or office supplies. You’ll even find cards that allow you to earn point or dollar multiples on categories that rotating quarterly or annually.
If you’re already in the market for a card, you might as well look for the strongest intro incentive you qualify for. Signup offers are plentiful and often easy to meet, helping you jump-start your rewards with bonus rewards or cash back. Whereas a low or 0% intro APR can soften the blow of large investments in your business, such as laptops or furniture for your office.
To establish or build your business’s credit score, focusing on cards that report your responsible spending to all three credit reporting bureaus can set you up for long-term success.
Keep to a budget. Align your spending with your cash flow to avoid expensive interest. Calculate how much you can afford to comfortably repay each month so that you don’t bump into your credit limit.
Adjust your credit limit. The credit limit on your card should be enough to cover your daily expenses throughout the month, with a little extra for emergencies. If you’re exhausting your credit limit often, see if your issuer is willing to increase your limit.
Maximize rewards. Look for a card that can earn your points or cash back on your top business expenses. Many include airline, hotel and other partners that offer double — sometimes triple — rewards in specific categories.
Travel affordably. If you’re always on the road, look for a card offering elite status on airlines, airport lounge access, complimentary rental car insurance, waived foreign transaction fees, loyalty programs and multiple ways to redeem points.
Automate your accounts. Technology makes it easy to keep tabs on our cards. Set up autopay, sign up for text or email alerts, go paperless for your statements or use a mobile app to monitor your business accounts at all times.
Monitor your credit score. Your business credit score is an important one if you’re planning on sticking around for the long haul. Pull both your personal and business credit reports to make sure everything is accurate and current.
Don’t be afraid to switch. As your business grows, the credit card you have today may not meet your needs. Maybe you need a higher credit limit or your spending trends are newly suited for stronger rewards. Don’t let brand loyalty hold you back from getting the best business card you’re eligible for.
Ask the experts
Eric Rosenberg
personalprofitability.com
Personal Finance Expert
Why do I need a business credit score, and how is it different from a personal score?
Just like loans to individuals, lenders want to know as much as possible about a borrower before approving a credit card application.
Business credit scores work similarly to personal scores in many ways but are monitored by some different companies. 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.
Tim and Amy Rutherford
gowithless.com
Award Travel Professionals
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 inquires have the potential to impact up to 10% of your score. Avoiding a personal credit inquiry may help when applying for additional loans or personal credit cards.
Andy Shuman
lazytravelers.net
Travel and Personal Finance Expert
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.
A provider can deny your business credit card application for many reasons that include:
Limited income.
No business credit score.
Poor personal credit score.
Too many marks on your personal credit report.
Lack of collateral.
Business too young.
If you’re denied for a card, start by calling the provider to ask for reconsideration. If they aren’t willing to reconsider you due to poor credit, you want want to resist applying for another card until you’ve had a chance to improve it. That way, you’ll avoid racking up hard pulls on your account for cards you ultimately won’t receive.
A charge card requires you to pay your balance in full each month, while a credit card offers the flexibility to pay your balance over a series of months.
It could. It all depends on how you use it and if your provider reports your account activity to the credit reporting agencies. You can avoid any issue by paying at least your statement’s minimum on time to keep your business account in good standing.
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