How To Get A Business Credit Card: 5 Steps To Follow
Before applying for a business credit card, it's important to know why you want a card, what your credit score is, and what business information you'll need to provide the card issuer.
Getting a business credit card benefits your company in a number of ways. Between their business-centric rewards and useful business benefits, business credit cards provide numerous avenues for saving money. What’s more, the best business credit cards can provide other boosts, like improving your credit score or making big purchases without needing to worry about paying interest.
If you’re wondering how to get a business credit card, know that the process is a little more involved than the process of getting a personal credit card, which is why we’ve written this guide. It will take you through determining why you’re seeking a business credit card all the way through the application process.
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Getting A Business Credit Card: 5 Steps To Take
Getting a business credit card is more than just finding a card you like and making sure you have a good credit score when you apply. By following these five steps, you can ensure that you’re seeking the cards that fit your business goals in the first place. You’ll also get a better understanding of what you should do before and during the application process.
1. Decide Why You Want A Business Credit Card
There are many solid reasons to get a business credit card. Maybe you want to earn cash back or points for your business spending via a rewards program. Maybe you’re looking to take advantage of common business credit card benefits like free employee cards or travel perks. You may also simply want to spread out the cost of a large purchase, in which case you’ll want a card with a 0% APR introductory rate so you won’t pay more than you have to.
Many cards also offer forms of zero liability — which helps provide a buffer between your money and a fraudster who has stolen your data — and purchase protection, a way to recoup costs if a recently-purchased item is stolen or damaged. These benefits mean that buying with a credit card may be safer than using your bank’s debit card.
Regardless, don’t apply for a business credit card just to have one. If you do plan on getting a card, make sure you can pay off your bill every month. If you plan on carrying a balance, you should understand the costs and other pitfalls associated with not paying off your monthly charges in full.
2. Check Your Credit Score
Before you actually apply for a card, check your personal credit score. Though you’ll be applying for a business credit card, issuers will still check your personal credit history when assessing your creditworthiness.
Credit scores are tools that help determine the health of your credit. While they don’t show the complete picture of your credit history, issuers still rely on them when assessing whether you should be trusted with a line of credit.
Both major scoring models (VantageScore and FICO) publish scores that range from 300 to 850. In general, an excellent score is 740 or above, good ranges from 640-739, fair from 580-639, and poor is 579 and below. Your score is calculated based on a variety of factors, including payment history, percent of credit used, accounts’ lengths, and types of credit. It just so happens that we have a full breakdown of just how long it takes to improve a credit score.
Luckily, it’s free and easy to check your score online. Just visit one of these free credit score websites, fill in your info, and your score should be generated. Sites like Credit Karma and WalletHub (and issuers like Chase) also offer credit monitoring — a handy feature if you’re looking to improve your credit score (or nip any backsliding in the bud).
If your credit isn’t so good, there are business credit cards for bad credit that you may qualify for. In many cases, issuers offer secured cards for low-credit users. There are even a few unsecured business credit cards available, like the Capital One Spark 1% Classic for Business card.
3. Look For Credit Cards With The Features You Want
Credit cards come with an array of reward programs and bonus features. With business cards, these rewards and features are often targeted toward the general spending habits of small businesses. However, no two businesses spend alike. Many credit card issuers offer numerous types of cards with different rewards schemes and benefits, so it’s likely that there’s a business credit card with a rewards program that fits your business spending profile.
If you travel frequently, a rewards card that offers miles may be your best bet. If you’ll be buying office supplies, gas, or taking clients out to lunch, a points business card may be better. If your business spending is diffuse and varied, a straightforward cash back credit card may be your best option.
Credit cards also offer additional features outside of their base rewards scheme. In the business credit card world, most features are targeted toward frequent travelers. This means that potential bonuses include airfare credit, complimentary flight and hotel upgrades, concierge services, travel insurance, and TSA PreCheck/Global Entry credit. Other common business credit card perks include free employee credit cards, extended warranties, purchase protection, and cell phone insurance.
These extraneous benefits probably won’t make or break a card for you. However, they’re still very much worth considering because they could end up saving your business money and time.
Note that business credit cards for those with bad credit tend to offer few (if any) rewards and benefits. However, with responsible card use, you should be able to upgrade to a better card in the future.
4. Collect Business Documents & Information
After you’ve decided on a business credit card, gather the required information to apply. As mentioned above, issuers do consider your personal credit history, so the information you’ll need to gather is both business and personal in nature.
Common information required on a business credit card application may include:
- Business’s legal name, address, and phone number
- Business’s tax identification number (also known as the Employer Identification Number or “EIN” — you can get some business credit cards with just an EIN and no social security number)
- Type of business and its structure
- Business’s annual revenue
- Business’s estimated monthly spending
- Business’s age
- Role in the business & number of employees
- Personal income
- Name, address, phone number, and date of birth
- Social security number (SSN)
Once you have this info handy, you can move on to the application process.
5. Apply For Your Credit Card
After you’ve picked out a card and gathered your important information, you can apply for a business credit card. In most cases, issuers have online applications. You can also often apply via mail or phone.
Assuming you’ve already assembled your information, the application process itself should go quickly, as you’ll just be filling out a form with the necessary info. In some cases, you may be approved within seconds of finishing the application. In other cases, you may need to wait a week or so to find out because the issuer will be reviewing your details.
Note that you may need to wait for up to 14 days before you actually receive your card. Once you get it in the mail, you’ll be able to activate the card and start using it for purchases. In some cases, you may be sent a virtual credit card number immediately, which you can then use for online purchases while you wait for your physical card to arrive.
Alternative Types Of Credit Cards For Business Use
If you want to use a credit card to make business purchases, a business credit card isn’t your only option. Let’s explore two popular alternatives.
The Bottom Line On How To Get A Business Credit Card
Getting a business credit card can ultimately save you money. Through a business credit card’s rewards and benefits, you may find that this little bit of plastic fits into your business’s spending routine perfectly. Plus, smart spending with a business credit card can help build your business credit, potentially aiding your business down the road when you need to apply for a loan or other lines of credit.