The Step-By-Step Guide To Getting A Business Credit Card
Getting your company a business credit card could be a great step towards saving money. Between their business-centric rewards and tangible benefits, business credit cards provide numerous avenues for hanging onto your green stuff. On top of the money-saving aspects, credit cards can provide other boosts, like improving your credit score or making big purchases without needing to worry about paying interest.
But how does one exactly get a business credit card? While the answer is fairly easy, it isn’t straightforward. That’s why we at Merchant Maverick have crafted this guide. It will take you through deciding why to get a business card all the way through the application process.
Read on through to find out how to get a business credit card!
Table of Contents
1. Decide Why You Want A Business Credit Card
There are plenty of reasons why you may want a business credit card. For starters, you might want to apply for a card to save money via a rewards program. Or perhaps you’ll want to take advantage of various benefits, like employee cards or travel credits. Cards can be also be used if you are making a large purchase and need to carry a balance; however, you’ll want to make sure you get 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, you won’t want to apply for a business credit card just to have one. If you do plan on getting a card, you’ll need to 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 credit card, it’s a good idea to check your personal credit score. Even though you’ll be applying for a business credit card, issuers will still check your personal history to make sure you are a good candidate.
Credit scores are tools that help determine the health of your credit. While they don’t show the complete picture of your credit history, they do shine a light on how trustworthy you might be with a line of credit. As such, issuers heavily consider your score when you apply for a credit card.
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 tabulated via a variety of factors, including payment history, percent of credit used, accounts’ lengths, and types of credit. For a full breakdown on just what a credit score is, read our post about how long it takes to improve a credit score
Luckily, it’s free and easy to check your score online. You’ll simply need to visit one of these websites, fill in your info, and then your score should be generated. Sites like Credit Karma and WalletHub also offer credit monitoring — a handy feature if you’re looking to improve or maintain your credit score.
If you have poor or bad credit, you still may be able to find a card that fits your credit score. In many cases, issuers offer secured cards for low-credit users. There are even a few non-secured options around — like the Capital One Spark Classic for Business card.
3. Look For Credit Cards With The Right Features
Credit cards come with an array of reward programs and bonus features. In the world of business cards, these rewards and features are often targeted towards the general spending habits of small businesses. However, no two businesses spend alike. Credit card issuers know this and many offer numerous types of cards with differing rewards schemes and benefits. With such diversity, there is likely one card out there that will match the way your business spends its money.
You’ll need to decide which type of rewards scheme will fit your business best. If you travel frequently, a card that offers miles for rewards 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. Straightforward cash back credit cards are also an option — they work great for businesses that have varied spending habits.
Credit cards also offer an array of additional features outside of their base rewards scheme. In the business credit card world, most features are targeted towards 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. If traveling isn’t your thing, you may still benefit from other features like employee cards, extended warranty, purchase protection, or 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.
As mentioned above, if you have a low credit score, your options are limited. Despite this potential handicap, you should still be able to find a secured credit card to fit the bill. Note that in most cases, secured cards lack any sort of rewards program. While this could be frustrating at first, if you manage payments smartly and improve your credit with a secured card, you’ll 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, you’ll want to gather up the necessary information to apply. This way you can fill out the application with relative ease. 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” — learn how to find or request an EIN in our guide)
- Type of business and its structure
- Business’s annual revenue
- Business’s estimated monthly spending
- Business’s age
- Role in the business, as well as number of employees
- Personal income
- Name, address, phone number, and date of birth
- Social security number
Once you have all this info handy, you can then move onto the application process.
5. Apply For Your Credit Card
After you’ve picked out a card and gathered your important information, you can finally apply for a 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 itself should be a breezy process due to the fact that 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. Other times 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.
Getting a credit card for your business can ultimately save you money. Through a 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 credit card can help build your credit, potentially aiding your business down the road when you need to apply for a loan or other lines of credit.