How to get a business credit card

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When starting a new business, it can be really easy for your personal and business finances to blend together. In the early days, 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 financial life separate from your business whenever possible. One way to keep business and personal expenses organized and apart is by applying for a business credit card.

When you have a business credit card, it can be easier to track your business spending. It also gives you a little 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 points and cash back, as well as take advantage of additional cardholder perks, just for making necessary business purchases.

As an added bonus, business credit card interest 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 more about how to get one.

Who can apply for a business credit card?

No matter how big or small your business is, you can apply for business credit cards. You don’t need to run a big business that has multiple employees, a sprawling office space or pricey equipment. From freelancers to side hustlers to major corporations, anyone who is independently earning money may qualify for a business credit card. Having an employer identification number (EIN) isn’t even a requirement for getting a business card, as you can apply for one if you are a sole proprietor.

How to choose a business credit card

Check your personal credit score

Your personal credit score is important when applying for business credit as issuers need to estimate your business’s creditworthiness. In addition to collecting detailed information about your business, most providers run a personal credit check for business card applications. As you use your business credit card, you’ll start to build business credit, which will help with future 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 a few points. When you begin using the card, issuers will report your card activity to the credit bureaus. Some only report business credit card activity to the business credit reporting agencies. However, others will also report to the personal credit bureaus, which means your business credit behavior can impact your personal credit, for better or worse.

For those with lower credit scores, it can be harder to qualify for an unsecured credit card. A secured credit card can be easier to qualify for as it requires a security deposit once you’re approved by the lender. Secured business credit cards may have higher interest rates or may come with additional fees.

Decide what rewards you want to earn

The right credit card for your company depends on what your business is and what your major spending categories are. Some business owners may prioritize earning miles, for example. If you travel regularly for business, you might want an airline business credit card that offers the potential to earn miles from purchases. The Capital One® Spark® Miles for Business might appeal to business travelers as it offers an unlimited 2x miles per dollar on every purchase and 5x miles on hotel and rental car bookings through Capital One Travel.

If you’re a side hustler or freelancer you may prefer a card that offers a higher percentage of cash back, like the American Express Blue Business Cash™ Card. This card offers 2 percent cash back on all eligible purchases up to $50,000 per year (then 1 percent) as well as 0 percent introductory APR on purchases for the first 12 months (13.24 percent to 19.24 percent variable APR thereafter).

Credit cards offer different rewards that correspond with specific spending categories, so it can be helpful to review the potential rewards for the categories you plan to spend the most in.

Consider the interest rates and fees

It’s important to keep both interest rates and fees in mind when choosing a credit card. Many business credit cards offer 0 percent introductory annual percentage rates (APRs) for a certain amount of time. This essentially provides free short-term business financing—as long as you can pay off your balance before that introductory period ends and the interest rate rises.

How to apply for a business credit card

Once you’re ready to start the process of getting a business credit card, you’ll need to complete an application process. When it comes to applying for a business credit card, the process may look somewhat familiar, but with the addition of a few key details about your business.

What to expect on a business card application

Be 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. For many entrepreneurs, their business address and phone number may be the same as their personal ones, and that’s OK.
  • 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, as that can give them an idea of who will be liable for any potential debt accumulated on the business credit card 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 a lender may request you provide them with information that proves you do in fact have a business. This is where an EIN or tax ID number can come in handy.