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How to get a business credit card

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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 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 and take advantage of additional cardholder perks—just for making necessary business purchases.

As a 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 how 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, 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.

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.

It can be tough for those with low credit scores to qualify for an unsecured credit card. 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 company. When shopping around, you’ll want to compare the rewards, interest rates and fees.

Business credit card rewards often correspond with specific spending categories, so it can be helpful to determine the categories you spend the most within. For example, some business owners may prioritize earning rewards for travel. If you travel for business, you might want an airline business credit card that earns miles and perks on the airline you favor. Or you may prefer the flexibility and premium benefits of a card like the Business Platinum Card® from American Express, which offers 5X points on flights and prepaid hotel bookings through Amex’s travel portal.

Alongside rewards and perks, 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 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 regular interest rate kicks in.

4. Gather required application information

Figuring out how to apply for a business credit card isn’t so 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 relelvant 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 EIN or tax ID number can come in handy.

The bottom line

It takes work to get a business credit card, but if you can get organized and follow the steps needed to secure one, you may find that managing your business and personal finances gets a whole lot simpler.

Written by
Jacqueline DeMarco
Personal Finance Writer
Jacqueline is a contributor for Bankrate and has worked with more than a dozen financial brands, including LendingTree, Credit Karma, Fundera, Chime, MagnifyMoney, Student Loan Hero, ValuePenguin, SoFi and Northwestern Mutual, providing thoughtful content to give readers insight into complex topics that they likely didn’t learn in school. You can learn more about her work and connect with her on LinkedIn or at JacquelineDeMarco.com. Sometimes she’s even interviewed about her career and running a freelance writing business.
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Part of  Introduction to Business Credit Cards