Best Business Credit Cards

How Can You Get a Business Credit Card?

You can apply for most business credit cards just like you’d apply for a personal credit card. This is because business credit cards usually rely on your personal credit, rather than your business credit; so there usually isn’t much difference in the application.

You’ll need “a business” of some kind, but you may find that it’s easier to meet that standard than you thought. You may qualify if you’ve ever engaged in anything like having a business — that includes being a freelancer or sole proprietor, or selling knickknacks at a local craft fair. Selling your old stuff on Craigslist might even be enough.

A few business cards, however, are designed for large corporations with large revenue streams. If that’s what you need, take a look at the Brex cards and the American Express Corporate cards.

Learn more about applying for business credit cards here, including how they can affect your personal credit.

What’s the Best Business Credit Card?

There are quite a few excellent business credit cards. The right one for you will depend on your needs:

• The Business Platinum Card® from American Express (Review): For travelers who want luxury perks and an extensive reward program
• Capital One Spark Cash for Business (Review): If you want simple flat-rate cash back
• Ink Business Cash® Credit Card (Review): For high cash back rates on typical business expenses
• Ink Business Preferred® Credit Card (Review): For points on travel and other expenses, and a big introductory bonus
• Brex Daily Card (Review): Excellent rewards and perks; you can apply with a business EIN and no personal guarantee

Best Picks for Airline Travel

There are many good airline business credit cards which are co-branded with specific airlines. They’re meant to be used mostly with that one brand, where they offer perks and their best rates for earning award miles.

The best airline card or cards for you will depend on the airlines you like. If you love flying with Delta, take a look at its co-branded cards; but if you hate that airline, you should rightly avoid its credit cards.

Many of the major airlines have co-branded cards, giving you opportunities to earn a whole lot of airline miles. Usually they only have one business card offer each, but in some cases there are more. If you don’t like the business card options, there may be a consumer airline credit card that’s more appealing.

Here are our top picks for airline business cards.

Best Picks for Hotel Stays

Just like when it comes to airline cards, the best hotel business card for you will depend on where you like to stay. Most of the major hotel brands offer co-branded cards, and they’re often very rewarding.

You’ll typically get some complimentary services and benefits at the participating hotel and resort locations, like free night stays. And you’ll often get some kind of Elite membership status, which usually provides extra perks and even more points on top of what you earn from the card.

There aren’t many hotel business cards, unfortunately. If the hotel brand you like doesn’t offer a business card, check to see if there’s a consumer hotel credit card that would work for you. You’ll get the same types of rewards and perks, but without the business features.

Here are our picks for the best hotel business cards.

What’s the Difference Between Business and Personal Cards?

There are a few important differences between business and personal cards. Before getting a business card, educate yourself on what to expect.

• The applicant will usually be held completely liable for the account. Business credit cards usually require a personal guarantee (PG), which will hold the applicant personally responsible to repay the debt incurred with the card.
• Business credit cards, as long as they are paid on time, are not usually reported on personal credit reports. But if your account goes into negative status or default, it may show up as a surprise blemish on your credit reports (and some card issuers report all business card activity on personal credit reports).
• Business credit cards are not covered by the protections of the CARD Act of 2009, which limits retroactive rate increases and fees, and requires a 21-day grace period before payments are due on cards that have grace periods. However, some card issuers will still include these features on business cards — check the card terms to find out.

If I Apply Using My EIN, Does the Card Issuer Check My Personal Credit Reports?

The short answer is yes, the credit inquiry will almost always look at against your personal credit (unless you’re applying for a corporate card, like from Brex or Amex).

You’ll have some choices about the information you submit when applying for a business card. You may need to enter both your Employer Identification Number (EIN) and your Social Security number. And in some cases you may be able to submit your EIN instead of your SSN.

However, you should usually expect a credit inquiry to show up on your personal credit reports, because your EIN is connected to your SSN. Since you typically need to sign on as the personal guarantor of the account, the card issuer will check your personal credit reports. The issuer can do this with just your EIN, although if that’s all you input they may ask you to submit your SSN afterward.

Depending on the issuer, regular account activity may be reported on your credit reports alongside personal credit card accounts, affecting your personal revolving utilization. Other issuers only report negative items, like late payments, to personal credit bureaus. Learn more about how different issuers report in our guide to building business credit.

In some cases, if you have a large, established business with a good credit history of its own, you may be able to apply for a business card without a personal guarantee. You may need to negotiate this with the card issuer. If you want to apply for a business card using only an EIN and without a personal guarantee, we recommend contacting the card issuer to ask about it.

A Positive Impact on Businesses

A report from the American Bankers Association clearly showed the overall economic advantage of the increased use of credit cards by small businesses.

On the individual scale, small business credit card use is connected to higher returns when it comes to growth in revenue and employment.

Some other interesting takeaways from the report:

• An increase of $1,000 in credit card spending was associated with an increase of $5,500 in business revenue.
• Small businesses with business cards had, on average, more assets, loans, revenue, and employees.
• Every increase of 1% in business card use was associated with approximately 17,000 new small business jobs.
• 80% of small firms using business cards paid off their balance in full each month (you should be like them!)

Types of Business Cards

Just like with personal cards, there are different types of cards available for businesses. The main types are revolving (commonly called “credit cards”), charge, and secured.

Revolving Business Cards

When you think of the typical credit card, you’re probably thinking of a revolving card. Revolving credit cards are issued with a credit limit based on your credit history and scores along with your current finances, and you can spend up to that limit.

If you carry (or revolve) a balance from month to month, you’ll be required to pay a minimum amount at the end of each billing period. If you decide not to pay the full balance owed, the remainder will accrue interest, which is set by your interest rate (usually a variable APR).

Unless absolutely necessary, we always recommend that you pay off your balance in full to avoid being charged interest on purchases.

Business Charge Cards

Charge cards are very similar to revolving credit cards, but they do not allow you to revolve a balance from month to month. Instead, you’re required to pay off the balance in full each month.

There are many benefits to this approach, because, while late fees may still apply for paying late, you’ll be saving money by not accruing interest each month. You don’t get the advantage of being able to pay for purchases over many months, but charge cards usually come with many of the same features as credit cards, like cash back for purchases along with shopping and traveling benefits.

In a sense, charge cards are like credit cards with a bit of built-in financial responsibility.

Read more: Charge Cards vs. Credit Cards

Secured Business Credit Cards

Though not an immediate go-to option, secured business cards are available for business owners with below-average or bad credit.

You simply need to put down a refundable security deposit to fund the credit limit. Over time, with responsible use, you can build up your credit and upgrade to an unsecured credit card.

Read more: Secured Business Credit Cards

Building Business Credit

Business credit is a different type of credit than personal credit, and needs to be built up in different (but similar) ways. You have business credit scores very much like personal credit scores, but there are different requirements to meet and some different credit reporting agencies to deal with.

The Definitive Guide to Building Business Credit

Starting a business can be complicated and expensive, and keeping business credit separated from personal credit may seem like a challenge.

What you’ll learn here:

• A step-by-step process to building business credit
• The agencies involved in reporting business credit
• How business credit is calculated
• How business credit differs from personal credit
• More tips and advice about business credit

Read more: The Definitive Guide to Building Business Credit

Getting a Business Credit Card Without a Personal Guarantee

In some cases it can be possible to successfully apply for a business credit card without needing to sign a personal guarantee of liability for the card. But you’ll usually need to be a corporation with an established line of credit.

What you’ll learn here:

• How personal guarantees will usually hold you liable for your business card usage, even if the card is associated with a business
• The two things you’ll need to do if you want to get a business credit card without signing a personal guarantee
• How consumer protections differ between personal and business cards

Read more: Getting a Business Credit Card Without a Personal Guarantee

Expert Q&A

Q1) Are there any differences in the application process between personal and business credit cards?

Answer by: Rama Malladi, Associate Professor of Finance, California State University, Dominguez Hills, CA

Credit cards fall into three major groups:

1. Personal cards for individuals
2. Small-business cards
3. Corporate cards for large businesses (typically more than $4 million in annual revenue)

They differ mainly in eligibility, credit limit, liability, point collection, and regulations. Since most people have a personal credit card, they are familiar with the application process. The business credit card application process is similar. Quite often, banks that transact with the business offer business credit cards and help in the application process.

However, most major banks offer business credit card programs. The most commonly used details are business name, tax identification (Social Security number or Employer Identification Number), date of birth, contact information, business details (start date, employees, state of business, title, annual revenue, estimated expenses, etc.). Small business credit card applications also require a personal guarantee and personal credit score.

 

Answer by: John J. Petosa, CPA, J.D. Professor of Practice, Syracuse University, Whitman School of Management

The application process is usually very similar with either an online or paper application. There are obvious differences in the information being requested, for example, the individual application would ask for the income of the person applying while the business card would want the sales and/or net income of the business and possibly a financial statement.

 

Answer by: Thomas Ulbrich, Executive in Residence for Entrepreneurship, University at Buffalo School of Management

If we’re focusing on small to mid-size businesses (which are the vast majority of businesses in the U.S.), truth be told there is little difference between the two. A small business credit card functions much the same as a personal credit card and the application process is similar. You are almost certainly going to have to give your personal information and personally guarantee the card if you aren’t a publicly traded company.

 

Answer by: Rainford Knight, PhD and Instructor for Finance, Florida Atlantic University School of Business

In order to assess your credit worthiness, credit reports are usually pulled. The process of pulling credit reports – hard pulls – will negatively impact your credit scores.

Q2) Are there any requirements to get business credit cards?

Answer by: Rama Malladi

Business credit cards require the owner or an authorized officer who can borrow on behalf of the business to sign the application. Corporate cards for large businesses typically require more significant annual revenue (example: more than $4 million), a minimum number of card users (example: 15), sufficient credit card usage (example: $300,000 or more), be registered as a corporation (instead of a sole proprietorship), tax ID and state registration, and recent audited financial statements.

 

Answer by: John J. Petosa

Each bank is different, but they’re making a credit decision so the Dun & Bradstreet number and the credit history of the business are taken into consideration. Some card companies follow new incorporations and offer introductory cards with a low threshold of say $2,000 as a way to gain the business of a new entity.

Q3) What is a personal guarantee for business credit cards, and why is it usually required?

Answer by: Rama Malladi

Unlike the small-business credit cards that make cardholders personally responsible for the card balance if the business fails, business (corporate) cards make only the business liable for the card debt. Typically, most small-business credit cards require a personal guarantee along with the application. If the business defaults (fails to pay credit card bills), the personal guarantor may be financially responsible. It may be possible to waive the personal guarantee requirement based on company payment history, solid financials, and low leverage ratios.

 

Answer by: John J. Petosa

Since many businesses choose to incorporate, the assets of the corporation are the sole way that the card payments would get paid. If the business goes bankrupt, credit cards are an unsecured creditor and therefore unlikely to get paid or are paid last after secured creditors. As such, and as a way to keep the interest rates somewhat reasonable, a personal guarantee will give the credit card issuer some additional collateral to collect any unpaid balances in the event the business files for bankruptcy.

 

Answer by: Thomas Ulbrich

I love this question as it makes me smile when I think the number of times I’ve heard a small business owner say, “I’m going to get a business credit card so I don’t have to do a personal guarantee”. That’s simply not going to happen. Although you won’t be signing a huge loan document, read the fine print on the application and in your acceptance letter. You’re responsible for the card. It’s under your social security card number, remember when you had to fill that in on the application?

There may be some advantages to choosing certain business card issuers over another if you look into their credit reporting policies. If you have a personal credit card you’ll typically have your credit history reported to the consumer credit bureaus on a monthly basis. That’s true for some business credit cards too, but there are some business credit card issuers that only report to the commercial credit bureaus and not the consumer credit bureaus. To further complicate things, you want to be doubly careful which card issuing bank you choose if you do have trouble making timely payments as many of the small business credit card companies actually report your activity to both the consumer credit bureaus and the commercial credit bureaus, which affects both your personal and business credit scores.

 

Answer by: Rainford Knight

Most business credit cards come with personal guarantees. So, if you do not have decent credit, getting a business credit card will be challenging. The personal guarantee protects the card issuer if the business fails, the borrower is still on the hook for the borrowed funds.

Q4) Why would a small business use a business credit card over a personal one?

Answer by: Rama Malladi

Using a small business credit card may be advantageous in the following areas:

A) Minimize reimbursement process: employees spend lots of time submitting documents and wait to be reimbursed.

B) Expense analytics: Since credit card companies provide expense analytics (monthly or quarterly, or annually), the small business does not need an expense analyst. So, the company can reduce time in number crunching and instead focus on improving the business.

C) Manage employee spending: Each employee spending can be managed automatically by setting limits and using the credit card systems (instead of a small business employee keeping track of spending).

D) Points to the company, not individual: Some companies may not allow employees to use personal credit cards for business purposes since the benefits of personal credit card usage go to the individual.

E) Build business credit: Business credit history is often used to make business loans and other lending decisions. Dun & Bradstreet, Experian, and Equifax Commercial are a few firms that keep track of business credit history. One primary reason for not using a personal credit card for business is inadvertently crossing the firewall between personal and business expenses. Commingling business and personal expenses can happen quickly in such a scenario and may violate company ethics guidelines and breach the firewall between a person and business. The CARD Act of 2009 provides many legal protections (such as constraints on APR increases, the fee for infractions) to users of personal credit cards, but these protections do not apply to business card users.

 

Answer by: John J. Petosa

If the business card is used effectively and is paid within terms, this helps build the business’ credit just as it would for an individual. Additionally, if for some reason the business card isn’t guaranteed the business owner would not be held responsible for the balance in the event the business fails. If the business fails and the owner uses their personal card, they not only have a failed business, but will impact their personal credit if they don’t pay the personal card.

 

Answer by: Thomas Ulbrich

There are a few reasons that a small business may want to use a business credit card instead of their personal card:

A) Although it is perfectly legal and acceptable to use your personal card for business, you do have track your purchases carefully and make sure you’re not mixing personal and business charges. Although the credit card companies likely won’t care, the IRS will if you get audited. Having a dedicated business credit card is a great way to keep things cut and dry. Business charges are business. Period.

B) Many business credit cards provide you year-end statements that can separate purchases by categories, making it easier for you and your accountant to complete your tax returns.

C) Annual fees can be tax deductible in many instances

D) Many times a business credit card has much higher limits than you might get with a personal card

E) Many cards offer unique and valuable bonus points or cash back which can be attractive if you are charging large sums of money. Sometimes business cards have super attractive 0% introductory periods that may be attractive to business owners

 

Answer by: Rainford Knight

There are several good reasons why a small business would want to use a business credit card instead of a personal credit card:

A) Ideally, a business owner should not mingle business and personal expenses. These expenses should be kept separately so that the cost of running a business can be clearly determined and done profitability. Also, proper expenses need to be tracked for tax purposes.

B) Using a business credit card will help to establish business credit history which could lead to better financing terms (for loans and credit lines) at some point in the future.

C) If you need to rebuild your credit, then a business credit cards showing on time payments and no defaults can be helpful.

Q5) How can businesses make the most out of business credit cards?

Answer by: Rama Malladi

Business credit cards can be helpful in the following areas:

1. Manage and monitor employee expenses effectively
2. Establish and build business credit
3. Motivate and recognize key employees
4. Create a company-wide pool of points
5. Provide access to emergency financing, and
6. Create a higher credit ceiling since credit limits are higher for businesses than those for people.

 

Answer by: John J. Petosa

Most businesses look for low interest cards and/or build points or cash back rewards as an additional way to finance their growing business. The key is discipline! Pay the balance each month to avoid higher interest costs, additional fees and provide room for unexpected expenses.

 

Answer by: Thomas Ulbrich

A word of warning. Like a personal credit card, don’t use if for the wrong purposes. It should never be used for long-term purchases or to try to save a dying business as in the end. It’s likely you’ll be on the hook for that debt. There is a saying that says, “I went bankrupt gradually, then suddenly”. The same goes with credit card debt, it sneaks up on you and builds gradually, only to find out that suddenly you’re beyond the point of being able to pay back the debt you’ve accrued. Business credit cards are a great tool for a good business, but they are not a panacea for a failing business.

For rates and fees of the American Express Blue Business Cash™ Card, please click here.

For rates and fees of the Delta SkyMiles® Reserve Business American Express Card, please click here.

For rates and fees of The Hilton Honors American Express Business Card, please click here.

For rates and fees of The Blue Business® Plus Credit Card from American Express, please click here.

For rates and fees of The Business Platinum Card® from American Express, please click here.

For rates and fees of the American Express® Business Gold Card, please click here.

For rates and fees of the Marriott Bonvoy Business™ American Express® Card, please click here.