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Applying for a business credit card is pretty much the same as applying for a personal card, except you also have to provide information about your business. You may qualify for a business card even if you think you don’t — basically, if you’ve sold something in the past year or so, that may be counted as business revenue.
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Ready to expand your business with a line of credit? Or earn a massive signup bonus, thanks to your side hustle?
In this article, we cover:
Whether you’re an aspiring biz mogul or a seasoned entrepreneur, you’re going to want to keep reading.
Before we get into the nitty-gritty details, however, here are a few of our favorite business credit cards.
|Card & Rewards||Annual Fee|
|Capital One Spark Cash for Business
||$0 intro for first year; $95 after that|
|The Business Platinum Card® from American Express
||$595 (Rates & Fees)|
|Ink Business Preferred® Credit Card
|Ink Business Cash® Credit Card
|Capital One Spark Classic for Business
|Wells Fargo® Business Secured Credit Card
As you might expect, you must have some sort of business to qualify for a business credit card. If you’re already a small business owner, feel free to skip to the next section.
But if you’re mostly interested in business credit cards for the signup bonuses, you might be wondering whether you, too, could qualify.
Luckily, the definition of “business” is pretty lax. Think back to the past year: Did you hawk jewelry at the local craft fair? Did you do any freelance web design work? Did you sell your old lawnmower on Craigslist?
Any of those activities count as business revenue, and could help you land a small business card. If your business hasn’t built business credit yet, don’t worry. Most banks look at your personal credit reports when you apply for a business card, unless your business has already established credit history (even then, they may still check your personal credit too).
Business cards may suit some freelancers, while others may prefer personal cards or a combination of the two. Explore our list of the best freelance credit cards for help deciding what works best for you.
If you’ve applied for a personal credit card before, the business credit card application won’t look all that different. It’ll just have some additional fields with questions about your business on top of the usual personal information.
Typically, here’s what you’ll need to provide:
You’ll also need to provide standard information about yourself, like your personal income and maybe your monthly housing payment.
Here’s an example from a Chase Ink card.
If your application is denied, don’t hesitate to call the card issuer’s reconsideration line. Explain you want the card to help you grow your business and earn points or cash back rewards, and you may luck out with a sympathetic rep who approves your application.
The most common types of business cards are as follows.
These are similar to regular personal credit cards: They have a credit limit that dictates how much you can spend on the card before paying it off.
You must make a minimum payment each billing cycle, but you don’t have to pay your bill in full, and can carry a balance from month to month.
While we don’t recommend carrying a balance because it’ll incur high interest charges, doing so can provide small business owners with a financial cushion during lean months.
Unlike credit cards, charge cards don’t have a published credit limit. Instead, they have “shadow” limits, which tend to be higher and more flexible than credit card limits. These limits can change over time, depending on your use of the card, credit history, and financial situation — and going over them could freeze your account.
Another big difference with charge cards: You can’t carry a balance, and you must pay your bill in full each month.
These cards can be useful for businesses whose expenses vary greatly, but can be dangerous if you spend more than you can pay off. Not paying the full balance could lead to penalty fees, as well as the inability to make more purchases.
On the other hand, if you need extra motivation to only spend what you can afford, a charge card could be the push you need.
If you’re a business owner with low or no personal credit, a secured credit card might be your only option. With these cards, you put down a deposit (say, $2,000) that serves as your credit line.
Since payments are usually reported to the credit bureaus, they’re a good way to build business credit until you qualify for an unsecured card.
If you’re a small business owner, the main purpose of business credit cards is to separate your personal expenses from your business expenses.
Without a dedicated business card, you’ll spend the end of the year ripping your hair out while determining which of your 112 Amazon charges are business purchases. (Not that I know from experience or anything…)
Here are the other pros and cons of using business credit cards.
While many business credit cards come with high credit limits, they often come with high interest rates, too. Though you can use your credit card to loan yourself money in a pinch, we always recommend paying your bill in full each month, so you can avoid paying interest completely.
Also worth noting: The CARD Act of 2009, which protects consumers from retroactive rate increases and fees, doesn’t apply to business cards. That being said, many business cards still offer these guarantees — so be sure to read the fine print.
For true rewards credit card junkies, there may come a time when you’ve taken advantage of many of the signup bonuses on the market.
But applying for business credit cards opens up a whole new world of killer signup bonuses.
So, even if your business is teeny tiny, you should consider applying for business credit cards. Just be sure to embrace responsible credit use: Pay your bill in full each month, and never spend extra money to get rewards.
Did you know businesses have credit scores, too?
Three credit bureaus — Dun & Bradstreet, Equifax, and Experian — offer business credit scores on a scale from 0 to 100. But if you’re just starting out, you won’t have any business credit yet. Which means that even when you’re applying for a business card, credit card companies will look at your personal credit scores.
Just like with personal credit cards, the card issuer will pull your credit reports after you apply. It’ll want to see things like a solid payment history, low credit utilization ratio, and long average age of accounts.
Since each application results in a hard credit check, you should only apply for cards that match your creditworthiness. (Here’s how to check your FICO score for free.) If you’re worried you won’t get approved for a card, try applying to a bank or credit union with which you already have a relationship. That said, a few hard inquiries won’t have a significant impact on your scores, especially if you have good credit, so don’t be afraid to apply for a card if you really want it.
When you apply for a business credit card, note you’ll probably have to sign a “personal guarantee.” This means you take personal responsibility for any debts incurred — and if the business fails and you’re unable to pay your bills, the bank can come after your personal finances. If you have a well-established business, however, you may be able to negotiate with the credit card issuer to get a business card without a personal guarantee.
Once you’re approved, your business card activities generally won’t affect your personal credit scores.
Out of the major credit card issuers, only Capital One reports all business credit card activity to the personal credit bureaus: TransUnion, Equifax, and Experian. So all the activity will wind up on your personal credit reports. American Express, Chase, and U.S. Bank only report negative information and delinquencies.
That doesn’t mean you should be irresponsible, though; missing payments could cause you to incur late fees and interest charges — and delinquencies could eventually impact your personal credit history.
Ready to apply for your business credit card? Amidst all the shiny card offers out there, it can be hard to know which to choose.
In addition to finding a card that matches your credit scores, here are a few things to consider:
The right airline travel rewards card for your business depends on what airline you travel most: Best Business Cards for Airline Travel
The best card for hotel rewards and benefits depends on where you stay most: Best Business Cards for Hotel Stays
For rates and fees of The Business Platinum Card® from American Express, please click here.
Susan is a freelance writer who specializes in turning complex financial topics into engaging and accessible articles. She's been writing about personal finance for six years, and was previously the senior writer at The Penny Hoarder and a staff writer at Student Loan Hero. Her personal finance writing has also appeared in publications like MarketWatch and Lifehacker.
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