Key takeaways

  • Business credit cards can help business owners keep their personal and business finances separate
  • Business credit cards often offer perks like sign-up bonuses, rewards and annual travel or business-related credits
  • When applying for a business credit card, you'll likely be asked for some basic information about your business, including your role in the company. You will also typically need to provide your Social Security number (SSN) and Employer Identification Number (EIN)
  • If your business credit card application is denied, first follow up with the issuer to learn why you were denied. If you were denied due to a low credit score, you may be able to get a secured business credit card

In the early days of starting a new business, it’s easy to let your personal and business finances blend. You may be financing your business out of your own pocket, and all business profits may become your personal income.

However, it’s important to keep your personal finances separate from your business. One way to accomplish this is by applying for a business credit card. With a dedicated business credit card, it’s easier to track your business spending. It also gives you some flexibility if you need short-term financing, like when you have bills due but are still waiting for your customers to pay their invoices. You can also earn credit card rewards and take advantage of additional cardholder perks — just for making necessary business purchases.

As a bonus, any interest you pay on a business credit card is tax-deductible when used solely to make business purchases. If you think a business credit card may be a good fit for you and your business, keep reading to learn the steps you should take to get a business credit card.

1. Define your business

While you aren’t required to register your business as a formal structure (like an LLC or S-Corp) in order to qualify for a business credit card, you do need to define your business during the application process.

Don’t worry: The requirements aren’t strict. You can qualify for a business credit card as a sole proprietorship, freelancer or contractor.

2. Check your personal credit score

Your personal credit score is important when applying for business credit since issuers need to estimate your business’ creditworthiness. In addition to collecting detailed information about your business, most providers run a personal credit check for business card applications.

A business credit card has the potential to affect your personal credit. When you apply for a business credit card, you will likely incur a hard inquiry that will appear on your credit report and temporarily drop your score by a few points. When you begin using the card, issuers will report your card activity to the credit bureaus. While some only report business credit card activity to the business credit reporting agencies, others will also report to the personal credit bureaus, which means your business credit behavior can impact your personal credit, for better or worse.

It can be tough for those with low credit scores to qualify for an unsecured credit card. In this case, a secured credit card can be easier to qualify for. They require a cash security deposit upfront, but the credit score requirements are lower.

3. Compare business credit cards

With so many options on the market, it can take time to find the best business credit card for your business. When shopping around, you’ll want to compare features like fees, rewards and interest rates.

Business credit card rewards often correspond with specific spending categories, so it can be helpful to determine the categories you spend the most in. For example, some business owners may prioritize earning rewards for travel. If you travel a lot for business, you might want an airline business credit card that offers rewards and perks with your favorite airline.

Or, you might prefer the flexibility and premium benefits of a flexible business rewards card like The Business Platinum Card® from American Express, which offers 5X points on flights and prepaid hotels booked with American Express Travel, plus 1.5X points (on up to $2 million per calendar year) on eligible purchases in key business categories and on eligible purchases of $5,000 or more.

Alongside rewards and perks, it’s important to keep both interest rates and fees in mind when choosing a business credit card. Many business credit cards offer 0 percent intro APRs on purchases, which essentially provides free short-term business financing — as long as you can pay off your balance before that introductory period ends and the regular interest rate kicks in. And many top business cards come with annual fees, too. For instance, the Amex Business Platinum comes with a $695 annual fee.

4. Gather required application information

Applying for a business credit card isn’t too complicated as long as you are prepared to provide some (or all) of the following information during the application process:

  • Business name and contact information. You’ll need to provide important identifying information about your business, such as your business name, address and phone number. Many entrepreneurs’ business and personal contact information are the same, which is fine.
  • Your role in the company. If you’re applying for a business credit card, chances are the lender will want to know who you are and what your role at the company is. This is relevant because it tells them who will be liable for any debt accumulated on the account.
  • Your annual business income. Similar to how you need to submit your personal income information when you apply for a personal credit card, you’ll need to provide your business income when you apply for a business credit card. If you’re a brand-new business that hasn’t generated income yet, you may need to report your income as $0 for the time being.
  • Business details. While these details will vary on an application-to-application basis, you may need to provide information about your business, such as what industry you’re in, how long you’ve been in business and how many employees you have.
  • Supporting documentation. Lenders won’t always ask for supporting documentation, but they may request you provide them with information that proves you have a business. At this point, an Employer Identification Number (EIN) or tax ID number can come in handy.

5. Wait for your card approval

After you submit your application, you will have to wait for the card issuer to review it. If it is an online application, it could be approved in minutes, but it’s also possible it could take a few days. If you are approved for a card, your issuer will mail your card, which typically takes a week or two after approval. Sometimes, the issuer might need to engage in a more detailed review or ask for more input from you and the process could take longer.

In case your application for a business credit card is denied, you should follow up with the issuer to learn why you were declined to see if you can remedy the situation. If it is a credit score issue, you may be able to qualify for a secured business credit card. Since you’ll be putting down a security deposit for a secured card, it can help the issuer overlook your credit issues. And after responsibly using the card for a while and building up your credit, you could be eligible for a regular business credit card.

FAQs

    • An EIN is not necessarily a requirement for getting a business credit card. If you’re a sole proprietor, you may be able to get a business card with just your Social Security number.
    • Yes, freelancers can get business credit cards. The best credit cards for freelancers will typically offer rewards on purchases, no annual fee and a sign-up bonus, among other perks.

The bottom line

It takes some work to get a business credit card, but doing so is helpful for tracking your business spending — and it can help make managing your business and personal finances a whole lot simpler.