How to Apply for a Business Credit Card
Published Nov. 1, 2024
If you're on a Galaxy Fold, consider unfolding your phone or viewing it in full screen to best optimize your experience.
You've built your business from the ground up. It might be time to add a business credit card to your financial toolkit. Not only will it help you cover purchases with the option to pay for them over time, but it will also increase the power of your spending with rewards or other specific benefits that match the way you spend.
Here's what to know about who business credit cards are for, types of business cards, eligibility criteria, what you need to start the application process, and what to do if your business credit card application is denied.
Business credit cards are designed specifically for business owners. They often offer perks and rewards that small business owners look for, such as travel credits and protections, cash back on certain types of purchases, and bonus rewards in the areas where your business spends the most money.
A business credit card can help you maintain a clear boundary between your personal and business finances, which could help you simplify your accounting and small business tax preparation processes.
Consider applying for a business credit card if you:
Business credit cards might not be the best match for a business that needs long-term financing. That's because the interest rate on credit cards is typically higher than the rate on comparable installment loans.
Business credit cards tend to fall into one of these categories:
Business credit card issuers will look at your business's credit score if it has one, especially if you apply by using your Federal Employer Identification Number (FEIN) in place of your Social Security number (SSN). Note that every FEIN is connected with the SSN of the person who applied for the FEIN. It's generally not possible to prevent the card issuer from identifying the individual, even if you apply as a business.
If your business hasn't established credit, the application will be based on your personal credit profile even if you only provide your FEIN. That means the creditor will review your payment history and balances on other accounts, as well as the other data that appears on your credit report. It may also look at the length of time your business has been open and how much revenue it brings in.
The size of your business isn't a deal breaker when it comes to business card eligibility. Anyone who makes money via a business activity -- whether that be through a brick-and-mortar store, online shop, side hustles, coaching, or freelancing -- can apply for a business credit card.
The information you will likely need to start the business credit card application process includes your:
You may also need to provide the following information about your business:
Business credit cards can help you establish and maintain a positive credit profile for your business. This could be helpful in the future if you need to apply for financing to grow your business.
Business credit cards can help you save on business expenses. For instance, a cash back card can help put money back in your pocket, especially if you choose a card that offers higher cash back rates in the categories where you spend a lot (such as office supply stores or advertising). A card that offers travel rewards can provide travel and dining perks like free trips or upgrades for business owners on the go.
Here are some of the most popular business card benefits.
Travel rewards can come in the form of points or miles that can be used to save money on future trips. Travel rewards cards can also include perks such as airport lounge access, points that can be used toward free hotel stays, free checked bags, and statement credits for Global Entry or CLEAR Plus memberships.
Some cash back cards earn unlimited cash back. Some provide extra cash back in specific bonus categories. Depending on the individual card, you may be able to redeem the cash back you earn by applying it to your statement balance, transferring it to your bank account, or using it to buy gift cards.
It's possible to avoid paying an annual fee, even for a business credit card. Like with personal credit cards, business cards with no annual fee may offer fewer rewards.
Business credit card companies often have welcome offers -- such as a cash back incentive or statement credit for a specified dollar amount spent -- to entice business owners to sign up for a card.
Business credit cards tend to have higher credit limits than personal cards. This gives your business more flexibility for spending and managing cash flow.
If your business credit card application is denied, you will get a letter in the mail from the credit card company that lists the reasons for the denial. If you have additional information to provide, you could call the creditor's reconsideration line and ask a representative to take a second look at your application.
If you still aren't approved, explore business cards for people with no credit or who have lower credit scores. You can also work on improving your credit score and try reapplying in three to six months.
Another option is looking for a different credit card that is more compatible with your current situation. If you were denied due to your credit score, look for a card that has lower credit score requirements or a secured card, where you pay a security deposit that becomes your credit limit.
You do not need to be an LLC or have any other type of corporate structure to qualify for a business credit card.
The minimum income requirement for a business credit card depends on the credit card company. The lower an applicant's income, the lower the credit limit will likely be.
Many issuers don't list income minimums on their business card applications, but some do.
The best business credit cards often require a minimum credit score of 670; however, you may be able to get a business credit card with a score below 600. The credit score cutoff is set by each individual creditor, and may vary from one credit card product to another.
No. In general, a business credit card in good standing won't show up on your personal credit report. It might show up, however, if the account goes into default or collections.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Motley Fool Money is 100% owned and operated by The Motley Fool. Our knowledgeable team of personal finance editors and analysts are employed by The Motley Fool and held to the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands. Terms may apply to offers listed on this page.