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How to Apply for a Business Credit Card
A business credit card can make purchasing smoother and help ensure future financing. Here's what you need to know.
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After establishing your business, you may need to purchase supplies or inventory on credit. While you can use your personal credit card, having a credit card in your business’s name has distinct advantages. A business credit card can simplify accounting and give your business a more professional appearance. In the long run, it can help establish business credit, which you’ll need for financing your company’s future growth.
Several factors are involved in choosing and applying for a business credit card. We’ll outline the qualifications required to apply and explain how to obtain one.
How to apply for a business credit card
The following steps will guide you through the process of applying for a business credit card.
1. Check your credit score.
If your business has been operating for three or more years, you may qualify for a business credit card using your business credit score. However, card issuers will typically ask for your Social Security number and will check your personal credit score.
Either way, it’s advisable to check your credit score before applying for a business credit card. The higher your score, the better your chances of approval and securing favorable terms with your top choices.
If your personal credit score is below 650, you may want to hold off on applying and instead focus on improving your credit. You can increase your score by paying down debt, bringing accounts current or resolving past credit disputes.
2. Identify the features you want in a business credit card.
Joe Camberato, CEO of National Business Capital, emphasized the importance of identifying your business’s specific needs to ensure you select a card with features that meet them.
“Figure out what your business actually needs in a credit card,” Camberato advised. “Do you need a high limit? Do you care more about flexible repayment terms? Know what you’re looking for upfront so you don’t waste time on options that won’t work.”
Consider the following card features that may suit your business:
- Rewards: Study your business expenses to see where you spend the most. For example, if you spend heavily on business travel, a mileage rewards card might be ideal.
- Long introductory periods: Some cards offer 0 percent introductory annual percentage rate (APR) periods for an extended time. These can be excellent options if you’re starting a business or want to use a credit card to finance your startup.
- Cash back programs: Some business credit cards provide cash back rewards for spending in specific categories. If your business has consistent expenses in key areas, a cash back program may be a good fit.
- Multiple cardholder support: Some cards are well suited for large corporations with dozens or even hundreds of cardholders and employee expense reimbursement
- Security features: Look for fraud protection, spending controls and real-time alerts to safeguard your business.
- Credit limits: Consider whether the card offers high credit limits to support big purchases or fluctuating expenses and cash flow issues.
- Repayment terms: Some cards provide flexible repayment terms, including interest-free grace periods or options to carry a balance over time.
3. Check business credit card qualification requirements.
Once you’ve identified the features that you want, you may have some cards in mind. However, you must ensure you meet the issuer’s eligibility requirements before applying. Every business credit card has specific approval criteria that determine whether your application will be accepted.
Consider the following potential restrictions:
- Organization restrictions: Some card issuers do not issue business credit cards to nonprofits or unincorporated businesses, such as sole proprietorships.
- Industry: Some institutions deny credit to businesses that operate in specific industries, such as multilevel marketers and cannabis- or firearm-related businesses.
- Applicant qualifications: Every issuer has its own minimum qualifying criteria for card applicants, including income, time in business and credit score.
4. Research and evaluate cards that suit your business.
After identifying the features you want and the qualifications you can meet, research business credit card options from banks, credit unions and financial comparison websites. Consider the following resources:
- Major banks and credit unions: Many financial institutions list their business credit card offerings online.
- Business credit card marketplaces: Websites like NerdWallet, Credit Karma and The Points Guy allow you to compare card benefits and eligibility criteria.
- Your existing bank or lender: If you already have a business checking account, check whether your bank offers a card that fits your needs.
- Small business associations and networks: Some organizations, like the Small Business Administration, provide guidance on business financing options.
5. Finalize your choice.
Your research has likely led you to a card you’d like to apply for. However, before moving forward, carefully review its terms and conditions to avoid unpleasant surprises. Pay close attention to the following:
- Introductory offers: If the card offers a 0 percent introductory APR period, know when it ends and what the interest rate will be afterward.
- Rewards limitations: Some cards cap rewards earnings or restrict how rewards can be redeemed. Be sure you understand these limits before applying.
- Annual fees and hidden costs: Look for annual fees, late payment penalties and foreign transaction fees that could impact your overall costs.
If you’re satisfied that the card is a good fit, it’s time to apply.
6. Gather your business credit card application information.
Ensure you have all the necessary information ready before starting the application. The application will require basic contact details such as your name, mailing address, phone number and email. You must also provide business-specific information, including:
- Business name
- Business address
- Years in business
- Annual revenue
- Monthly expenses
- Estimated monthly spending on the card
- Your business’s tax identification number:
- If your business is incorporated, this typically is your employer identification number.
- If you’re a sole proprietor or a single-member limited liability company, you may use your Social Security number.
- Your name and position in the company
- Social Security numbers of business partners who own a certain percentage of the business (usually 20 percent or more)
Depending on the issuer, a card application may also ask about your business’s industry, its nature (whether it’s for-profit, for example) and the number of employees or additional cardholders.
7. Apply for your business credit card.
With all the necessary information ready, it’s time to apply for your business credit card. Most applications are completed online and take only a few minutes.
Depending on the information you provide, the card issuer may request additional details or require further verification. You may be able to submit these details online or you may need to follow up via phone or email.
6. Await the card issuer’s decision and start using your card.
After submitting your application, you’ll need to wait for the card issuer’s decision. Some approvals take just a few minutes, while others may require a day or two if additional verification is needed.
If approved, you’ll receive your physical cards in the mail, which you’ll need to activate before using. In some cases, you can start using a digital version of the card immediately.
Why would a business credit card application be denied?
If your application is denied, you may be disappointed and confused. “Credit card issuers are not required to inform business owners the reason why their application has been denied,” explained Gerri Detweiler, credit expert and education consultant at Nav.
Still, understanding common reasons for denials can help you regroup and try again — perhaps with a different card. Here are a few factors that may have influenced your denial:
- Your business type (some issuers don’t support nonprofits or sole proprietorships)
- Your revenue or revenue expectations
- Your time in business
- Your personal credit score (the most common factor)
- The availability of personal guarantees from you and your business partners
- Your industry (some issuers restrict lending based on industry type)
This list isn’t comprehensive. Credit card applications can be denied for various reasons. Even an unusual business address — one that isn’t easily found in postal code databases — can be a disqualifying factor.
When not to apply for a business credit card
A business credit card can be a quick and easy way to access credit for your business. However, in some cases, it may not be your best option. Consider the following situations where applying for a business credit card may not be advisable, as you’re less likely to qualify:
- Your personal credit isn’t in good shape.
- You already have a lot of business debt outstanding.
- Your business is just getting started and doesn’t yet have a reliable income.
- You’re currently applying for a business loan.
Detweiler advised particular caution for businesses in the midst of a loan application. “Business owners may want to avoid applying for a business credit card if they are in the process of applying for an important loan (like a mortgage),” Detweiler advised. “[A credit card application] will likely result in a hard pull on your personal credit report that can cause your credit score to dip. That drop is usually temporary, but you want to be careful if you’re in the middle of getting financing.”
How business credit cards and personal credit are connected
Business credit cards are tied to personal credit in several ways:
- Approval hinges on your personal credit: As mentioned, when you apply for a business credit card, your personal credit score is a significant factor. Most card issuers conduct a hard inquiry on your credit report, which can temporarily lower your score and take several months to drop off. “Most small business credit card issuers check the owner’s personal credit scores and good to excellent credit is required,” Detweiler noted.
- Business balances may affect your personal credit: If you’re approved, some issuers report business credit card balances to personal credit bureaus. This means that carrying a high balance on your business card could impact your personal credit utilization ratio and affect your ability to qualify for business financing or personal loans.
- Personal guarantees may be required: Some business credit card issuers require a personal guarantee from anyone who owns 20 percent or more of the business — and, in some cases, from each cardholder. If your business misses payments or defaults, your personal credit score will be negatively affected.
If you’re having trouble getting approved for a traditional business credit card, consider alternatives designed for startups and small businesses. Swapnil Shinde, CEO of Zeni, advises looking for business credit cards that don’t rely on an applicant’s personal credit score.
“Instead of personal credit, they evaluate the business’s financial health, such as cash flow, revenue and available capital in linked business accounts,” Shinde explained. “Often, they don’t require a personal guarantee, making them attractive to founders looking to separate personal and business finances entirely.”
Business credit card FAQs
- Reporting differences: Business credit cards are monitored and reported differently from personal credit cards. Personal credit card accounts are reported monthly to the major consumer credit bureaus — Experian, Equifax and TransUnion. However, depending on the card issuer, a business credit card may report to both consumer and commercial credit bureaus or only to commercial ones.
- Spending limits: Business credit cards typically have higher spending limits because businesses often need big-ticket items.
- Rewards differences: Credit card rewards on business credit cards are usually geared toward commercial use. Business credit cards often advertise rewards like airline miles or travel discounts.
- Tax benefits: Business credit cards make tracking expenses easier for tax-deduction purposes. Credit card statements provide a clear record of business expenditures, helping simplify tax preparation.
- Credit score protection: Business credit cards help you keep your personal credit separate from your business credit. If your business credit score decreases, it should not adversely affect your consumer credit score and vice versa.
- Higher spending limits: Business credit cards typically have higher spending limits to give businesses more flexibility for big purchases and operational expenses.
- Money management: Business credit cards can help improve cash flow management, which is crucial for all businesses — especially startups. They allow business owners to cover expenses such as equipment and inventory while maintaining financial flexibility.
- Fees, such as annual fees, late payment fees and foreign transaction fees
- Rewards, including cash back programs, travel perks and other benefits that align with your business expenses
Are you ready to get a business credit card?
Applying for a business credit card is relatively quick and easy — it’s usually as simple as completing an application online. However, before you apply, ensure that a business credit card is the right financing option for your business.
If so, research cards, pick the best one for you, gather relevant info and confirm that you’ll likely qualify based on your credit score before applying. That way, you can increase your chances of approval — avoiding an unnecessary hard inquiry — and ensure you find the best card for your business.
Anna Baluch contributed to this article.
