Opening a business credit card is relatively simple work if you prepare in advance. The first step in how to get a business credit card: make sure your personal credit score is 640 or better. Applying takes minutes, and you don’t even need a taxpayer identification number (TIN) or employer identification number (EIN).
Before you apply, you should find the right card for your business. A good option is the American Express Blue Business Cash™ Card because of its generous combination of rates and rewards. It offers the ability to earn 2% cash back on purchases up to $50,000, and 1% thereafter.
Getting approved for the best small business credit cards can be easy. Here’s how to get a business credit card in four steps.
1. Look Up Your Credit Score
The first step in how to apply for a business credit card is to make sure you know how to qualify for a business credit card. Lenders will look first to your personal credit score, but they may also consider your company’s revenue, industry and monthly expenses in judging your ability to repay. You do not have to have established business credit to qualify for a business credit card.
To get approved for a business credit card, you’ll need to have a minimum credit score of 640. The best rates and rewards are reserved for owners with a credit score of 750 or higher.
Small business owners with excellent credit of 750 or higher may qualify for cards that charge APRs as low as around 14%, introductory rewards worth $500 or more, and ongoing rewards of up to 5%. Small business owners with fair credit of 640 or higher may qualify for cards that charge APRs of 20% or higher, offer small or no introductory rewards and ongoing rewards of around 1%.
Determine Your Business Credit Card Eligibility
Personal credit scores range from 300 to 850, but you generally must have a credit score of at least 640 to get approved for a credit card. If your score is below 640, you may need to improve your credit score before applying by paying bills on your existing credit cards on time and paying down existing credit card debt.
Payment history and the amount you owe account for 65% of your FICO score. You can improve your credit score by always paying your bills on time and by managing the amount of available credit you use. Your credit utilization ratio — how much credit you use in relation to your credit limit — should be below 30%. If you have a card with a $1,000 credit limit, that means keeping balances below $300.
You may be eligible to apply for a business credit card even if you don’t operate a full-time business. Issuers may approve you even if you sell items on eBay or run a side business in addition to your full-time job. The key is to tell the truth on your application and be prepared to provide documentation about your business if asked.
2. Research Your Credit Card Options
Before you apply for a credit card, you should research how business credit cards work and the best rewards business credit cards to find the one that best fits your business’ needs. The three most important features that differentiate business credit cards are introductory and ongoing rewards introductory and ongoing APRs annual fees. Each of these could save or cost your business hundreds or thousands of dollars annually.
When you’re considering how to get a business credit card, your research should several items.
Introductory and Ongoing Rewards
Business credit cards offer either cash back or points or miles as rewards. You may be offered introductory rewards as an enticement to apply for the card and ongoing rewards as an enticement to continue using the card.
To entice you to apply for a small business credit card, issuers may offer:
- Introductory rewards worth $100 to $500 or more after you put $500 to $3,000 or more on the card within the first three months or so of card ownership
- Ongoing rewards of up to 5%
Ongoing rewards programs typically pay cardholders either a flat rate on all purchases or tiered rewards on specific spending categories, like office supplies or travel. The best flat-rate cards pay 2% or two times the points on all spending while tiered rewards programs pay 3% to 5% on one or more rewards categories and 1% on all other spending.
When examining rewards programs, you’ll need to decide:
- Whether you want cash back or points.
- If you can afford the spending requirement to earn introductory rewards.
- If a fixed-rate card is best for you.
- If a tiered-bonus card is best for you.
A handy way to decide whether a fixed-rate or tiered-bonus card is best for you is to look at your company’s spending. If the bulk of your monthly business expenses fall into a few categories like travel or office supplies, pick a card that offers 5% rewards on that spending. If your spending is spread out over many categories, choose the fixed-rate card to ensure 2% rewards across the board.
Introductory and Ongoing APRs
The introductory and ongoing APRs a business credit card charges could have a big impact on your total credit card costs.
To entice you to apply for a small business credit card, issuers may offer:
- Introductory 0% APR on purchases and balance transfer for nine to 15 months or more
- Ongoing APRs of between 13% and 25%
While introductory offers are generally available to any business owner approved for a credit card, the best ongoing APRs typically are reserved for owners with a 750 or higher credit score. Issuers usually express ongoing APRs in a range (13.24% to 21.24%). You won’t know your APR until you’re approved, but you can judge where in the range you might fall based on your credit score.
Look for a card with an introductory 0% APR offer if you need to finance a large purchase for your business, or you have other high-interest credit card debt you’d like to consolidate. The best 0% interest business cards offer intro periods of nine to 15 months or more.
Be sure to look at charge cards, as well. They do not have APRs like small business credit cards because you have to pay off your entire balance each month. Charge cards often offer no preset spending limits — meaning you don’t have a defined credit limit — and come with annual fees of $200 or higher. This type of card is best for businesses with thousands of dollars of monthly card expenses they can pay off with cash on hand.
The third factor to consider is whether a card charges an annual fee. Annual fees range from $0 to $450. Some cards may waive them the first year as an incentive to apply for a small business credit card.
Generally, the larger the annual fee, the better the rewards and free benefits like airport lounge access and annual travel credits. Lock yourself into an annual fee only if the rewards and benefits you can take advantage of are worth at least two times the annual fee.
You’ll have to do some research before finding the right business credit card for you. Start by visiting the FitSmallBusiness Credit Card Marketplace, where you can narrow your search based on the types of rewards, APRs, and annual fees best suited for your business.
3. Gather Information Needed to Apply
When you apply for a small business credit card, be prepared to offer basic information about both yourself and your business. If you have a TIN, you will be asked for it. You do not need a TIN to qualify for a small business credit card.
The basic information you’ll be asked to fill out includes:
- Name and business name
- Mailing address
- Legal entity or type of business
- Tax identification number — both your Social Security number and the business’s employer identification number if you have one
- Annual business revenue
- Years in business
- Monthly business expenses
- Personal income information
Although you may receive an answer instantly when you apply online, sometimes you won’t receive an answer right away. In cases like this, your application has been flagged for review, and you may not learn whether you were approved or rejected for up to 10 days.
4. Learn How to Apply for a Business Credit Card
Once you choose a business credit card and you’re confident you know how to qualify for a business credit card, it’s time to fill out an application. You can apply online for most major credit cards through the issuer. You may apply for a credit card in a branch as well. In some cases, introductory rewards may be different in branch than online.
For online applications, you may receive an instant decision. You’ll typically fill out the application, containing basic personal and business information, and then hit submit. The entire process can typically be completed online within minutes.
Once you’ve received approval notification, you’ll have to wait for the issuer to mail the card. The waiting time varies by issuer, but the waiting time typically falls in the two- to 12-day range.
Use Your Card Responsibly & Earn Rewards
Once you receive your card and activate it, you can begin using your card to fund your business and earn both introductory and ongoing rewards If your card includes a 0% introductory APR offer, you won’t be charged during this time if you carry a balance. Some cards may allow you to transfer balances from existing cards for an interest-free period at this time as well.
Use the first several months of card ownership to:
- Reach spending requirements to earn introductory rewards
- Begin amassing either points or cash back by using your card to pay for business expenses
If your card doesn’t have an introductory APR offer on purchases, it’s a good idea to pay your balance in full each month. If you carry a balance, the interest you will pay will overtake the value of any ongoing rewards you receive quickly. Managing your balance wisely will also help you maintain or improve your credit score as your payment history and credit use are major factors in determining your score.
3 Tips to Getting Approved for a Small Business Credit Card
Getting approved for a business credit card typically comes down to your credit score and your income or business revenue. You may want to improve your credit score and income and reduce your expenses before you apply to qualify for the card you want. A higher credit score may also help you increase your credit limit.
Here are three ways to increase your business credit card approval chances.
1. Improve Your Personal Credit Score
If your credit score is less than 640, then you’ll likely need to improve it before you apply so that you can qualify for the best business credit cards. You can raise your credit score by:
- Paying bills on your existing credit cards on time
- Paying down existing credit card debt
Both are important factors in your credit score but managing the amount of available credit you use can have a more immediate impact. Your credit utilization rate — how much credit you use versus how much credit you have available to you — should be below 30%.
2. Grow Your Income or Business Revenue
No matter how good your credit is, you’ll find it difficult to get a large credit line — or approved at all — if you don’t have much business revenue or outside income. You can increase your chances for approval by finding ways to improve your business revenue before you apply. Even signing one large new customer might increase your revenue enough to improve your chances of getting the card you want.
3. Reduce Your Expenses
Some business credit card applications ask you to list your monthly expenses to help the lender understand how much debt you can afford to make payments every month. For many cards, reducing those expenses before you apply may not increase your chances of getting funded, but it can help you increase your credit line if approved. Ultimately, if you’re taking on extra debt, it’s a good idea to reduce these business costs regardless.
Benefits of Opening a Small Business Credit Card
If you’re a business owner, there are many reasons to consider opening a business card vs personal card. But perhaps the biggest reason is to separate your personal expenses from your business expenses. Come tax time, you don’t want to be confused — and you don’t want to confuse your tax preparer — about your card spending.
Here are four big reasons why you should open a small business credit card.
1. Separate Your Personal & Business Finances
Separating your personal and business finances is important in establishing and maximizing both credit scores. You don’t want a negative credit mark on one report impacting the credit report of the other. You also want to make it easy for a potential credit card company to know what your business is earning, and which debts belong to you personally.
If you’re ready to separate the two, we recommend reading our article on the best business checking accounts.
2. Earn Rewards on Business Expenses
The best small business credit cards offer rewards on the types of purchases businesses — not consumers — can most take advantage of. Earn 5% on advertising, office supply, or telecommunications spending, depending on the card. Consumer cards favor rewards on travel, restaurants, and gas.
3. Build Your Business Credit
Business credit card issuers report your activity to business credit bureaus. This is a great way for new businesses to build their business credit. Responsible credit behavior will establish and improve your business credit score, which will make your company look good in the eyes of vendors, clients, and potential lenders.
4. Improve Your Cash Flow
Some small business credit cards offer 0% APR introductory financing on purchases and balance transfers. The interest you save — and the long-term free financing — could help your business put the extra cash saved to work. If you’re not paying interest, you could put that money to work hiring new employees or investing in new opportunities.
Frequently Asked Questions (FAQs) About How to Get a Business Credit Card
There are more steps to applying for a small business credit card than a personal card. These frequently asked questions should help you navigate the application process. If we don’t answer your question in the FAQs below, you can post a comment below and we will answer your question.
What Is the Best Small Business Credit Card?
The best small business credit card for you will be one that you qualify for that gives you the best rewards for the type of purchases you plan on making. We’ve done hours of research and put together a list of the best small business credit cards, which can give you a good starting point.
Can Anyone Apply for a Small Business Credit Card?
No one is restricted from applying for a small business credit card, but you need to be operating a business, even if you’re selling items on eBay. The application asks specifically for the annual revenue of your business, which makes having a business a qualification requirement.
You can apply with your own Social Security number if you don’t have an EIN for your business. We also recommend only applying if you have a good chance of being approved because your credit might take a hit for the application.
How Do I Build Credit for My LLC or Business?
Many businesses aren’t sure where to begin to build business credit since so many small business credit cards rely on your personal credit to approve your application. You can build your credit score the same way you can your personal score. For example, opening credit accounts and making your payments on time.
To get started with your business credit you should get a D-U-N-S number (for Dun & Bradstreet credit report) and provide at least three trade references who can vouch for your frequent and timely payments. Other credit reporting bureaus like Experian and Equifax build a credit report on your company regardless of if you set one up or not.
Can You Get a Business Credit Card With Bad Credit?
Most of the best business credit cards will deny your application if you have bad credit. Credit card companies offer secured cards for bad credit borrowers. The best business secured credit cards are cards that will let you use a credit line up to the amount you’ve provided in cash as collateral.
Can I Use a Business Credit Card for Personal Use?
While there’s nothing stopping you from using your business credit card for personal use, we strongly discourage this type of spending behavior. Your personal and business finances should be kept separate to protect you personally from business liability. Using the card for personal purchases complicates all of these transactions and relationships.
How Do I Know if I Need a Personal or Business Credit Card?
Many business owners use both business credit cards and personal credit cards as part of their financial strategy when their business is young. We recommend using a business credit card for your business purchases because it makes your accounting and bookkeeping easier and helps to shield you legally from business liability.
The Bottom Line
Learning how to apply for a business credit card isn’t a difficult process but knowing how to navigate the application process can help improve your chances at either getting approved or at increasing your total credit line. The best card for you is going to be determined by the types of purchases you plan on making with your credit card, what your credit score is, and your total annual business revenue.
American Express Blue Business Cash™ is a great card that most small businesses can benefit from. You can apply online and within a few minutes can get qualified for a card that will reward you 2% cash back on purchases up to $50,000.