How to Apply for a Business Credit Card
To apply for a business card, you’ll need to provide a card issuer with basic information, including your business name, contact info, business structure, federal tax ID, number of years in business, and number of employees.
Besides that, they’ll want to know your key financials like monthly expenses and annual revenue, as well as your credit history.
For detailed guidance on how to apply for a business credit card, read on.
What You Will Need to Apply for a Business Credit Card
Now let’s further unpack the process of applying with business credit card issuers.
First, you’ll need your basic business information, which lets a credit card company know your legal business name, physical address, phone number, email address, and so on.
Next, there’s business structure, which means you’ll need to be a legally recognized business entity, such as a partnership, sole proprietorship, or LLC. Note that some business credit card issuers also have options available for freelancers and independent contractors.
Third, you’ll need to provide a federal tax ID, which can include an employer identification number (EIN), SSN, or both, depending on the credit card issuer.
Although it’s possible to apply for some corporate credit cards with just an EIN, you’ll usually need an SSN for an account opening on most small business credit cards.
Then, there’s info like the number of years you’ve been in business and the number of employees you have. This gives a credit card issuer perspective on how well-established you are and the scale of your business.
Most credit card issuers prefer a business to have been around for at least one year, while others with large credit limits and robust rewards programs will often require two to three years. That said, there are some lenders that are more flexible with their criteria.
Finally, lenders will want to know your credit history. Similar to applying for a personal credit card or personal loan, they’ll usually want to see a FICO Score of 670 or higher, according to Experian.
If you have bad credit and need a boost, a simple way to get it is by using a utility bill reporting tool like eCredable. With it, you can have power, water, gas, internet, and other utility accounts reported to multiple major credit bureaus simultaneously.
As long as you make your payments on time, this can help raise your credit score, which can help build business credit in 30 days and increase your chances of being approved for a business credit card.
Research Your Business Credit Card Options
Choosing a Credit Card Company
If your business is well-established, you’ve got solid financials and a strong credit profile, you’ll likely have a wide array of business credit card options.
However, if you’re a new business just getting going and lack a robust credit profile, your business card options will likely be more limited.
Regardless of your situation, the first thing you’ll want to research when considering potential card issuers is the company.
Are they a notable company like Chase, Capital One, or American Express? Do they use the Visa or Mastercard networks?
Or are they a newer, lesser-known bank, credit union, or alternative lender?
Research online reviews, ratings, testimonials, and customer experience to get a feel for a company’s legitimacy and what it’s like to get funding through them.
Also research the account opening process, ease of business card use, features, and customer service, as well as common complaints from other business owners.
Types of Cards Offered
There are several types of cards that fall under the business credit card umbrella, with each catering to the specific needs of individual business owners.
Here are some examples:
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Small business credit cards - Designed with the small business owner in mind, these tend to be general purpose, have lower credit limits, and flexible payment options.
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Corporate credit cards - These are best suited for large companies and enterprises with numerous employees. They usually have higher credit limits than small business cards and often come with comprehensive features like spending controls, detailed reporting, and employee card options.
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Cash back cards - This type of business credit card gives you a percentage of eligible purchases back as cash rewards. You can, in turn, use that money to reinvest into your business and use it toward key business expenses.
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Travel rewards cards - With this type of card, you earn rewards such as airline miles and hotel points, as well as perks like airport lounge access. A travel rewards card is perfect for business owners who frequently travel and want to minimize travel-related business expenses.
There are also charge cards, which allow you to spend with credit and don’t usually have a preset spending limit. However, you’re required to pay the balance in full at the end of every statement cycle, which is typically monthly.
Charge cards don’t have any interest, allow you to capitalize on robust rewards and other benefits, and are also useful for building business credit. But you need to have a strong cash flow and spend responsibly with charge cards to avoid running into trouble.
Requirements
Earlier we discussed what business owners typically need to apply for a card, such as a business name, business structure, tax information, financials, and good credit history.
These are common across the board, but every credit card issuer is a little different in terms of their specific business card eligibility requirements.
Before applying for an account opening, you’ll want to know the exact eligibility requirements, which can usually be found on the credit card issuer’s website.
For example, visiting the business credit card application page should provide you with a quick overview so you’ll know what to expect.
If it’s immediately obvious that you don’t meet the necessary requirements, you’ll want to look for another card that you do qualify for.
Also, note that if you don’t qualify for a particular business card with a company, they may consider you for other cards, as Capital One does.
Interest Rates
According to 2021 data, the average interest rate on a business credit card for small business was 17.82%.
That being said, interest rates can vary significantly, with some being as low as 12% and others being 30% or higher.
Because of this, you’ll want to know exactly what the interest rate will be before applying for any business credit card.
Note that your exact interest rate is often determined by your creditworthiness, and there can be an APR range based on that. The Spark 1.5% Cash Select card from Capital One, for example, currently has 20.99% - 28.99% variable APR based on your creditworthiness.
Also, note that many credit card issuers offer low or no interest during the introductory period, which typically lasts for 12 months. For instance, the Spark 1.5% Cash Select card from Capital One has no annual fee and 0% introductory APR during the first year.
That’s why it’s worth researching multiple credit card providers and looking for one with a no-interest introductory period to find the best business credit card.
Annual Fees
Like interest rates, annual fees can vary considerably from one credit card company to another.
According to Lending Tree, “Just under half of the small business cards they reviewed in 2021 came with an annual fee, with the median annual fee being $99.”
Because of the fact that so many business credit cards don’t have an annual fee, it’s important to do your research to find them.
And when it comes down to a business owner deciding between two comparable credit cards with one having an annual fee and the other not having an annual fee, we usually suggest opting for the latter.
However, if you find a business credit card with an excellent rewards program and other perks like no balance transfer fees or a high-yield add-on savings account, paying an annual fee may be worth it in the long run, which brings us to our next point.
Rewards
Besides access to cash flow and credit-building opportunities, one of the biggest benefits of using business credit cards is the ability to earn rewards for each eligible business purchase.
With rewards varying from card to card, we suggest exploring multiple options to find a rewards program that best fits your needs.
Generally speaking, most credit cards will offer somewhere between 1% - 5% cash back or 1x - 5x points on each eligible purchase. So that’s usually what you can expect across the board.
An Ultimate Reward card from Chase Bank, for instance, offers at least one point for every dollar you spend.
However, some business credit card options go even higher, such as the Brex Card which offers up to 7x points, and the IHG One Rewards Premier Business Credit Card, which goes all the way up to 26x points.
Just note that those with robust rewards often come with a higher annual fee, so you need to look at business credit cards from all angles when making your choice.
Apply for Your Desired Business Credit Card
The application process involves eight main steps.
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Prepare the necessary information we discussed earlier (business information, federal tax ID, financials, and so on)
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Review qualification criteria to ensure you’re eligible for the specific credit card you’re interested in
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Check your personal and business credit profiles to make sure they’re up-to-date (this can be done through credit bureaus like Experian)
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Choose the specific business credit card you want and carefully read through the terms and conditions
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Fill out the business credit card application on the issuer’s website
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Provide all necessary information
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Submit the application
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Wait for a decision (this can take as little as a few minutes or as much as two weeks)
If you’ve been approved, you’ll receive your business credit card in the mail (typically within 7 - 10 business days). At that point, it’s just a matter of activating your card, and you can officially start using it.
Conclusion
Business credit cards serve multiple purposes and are an excellent way to increase business cash flow while simultaneously building business credit.
They’re also much easier to obtain than many other forms of financing like a traditional business loan and business tradelines.
It’s just a matter of knowing how to apply for a business credit card and choosing the card that best aligns with your needs.
FAQs
What Do You Need to Open a Business Credit Card?
Typically, you’ll need the following:
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A business name
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A specified business structure such as a partnership, sole proprietorship, or LLC
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Contact information
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Information on the amount of time you’ve been in business and the number of employees you have
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A federal tax ID like an EIN, SSN, or both (having an EIN can also be helpful for building business credit without using personal credit)
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Financial information, including monthly expenses and annual revenue
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A good credit score (similar to a personal credit score, credit card companies usually prefer a personal credit score of 670 or higher)
How Can I Get a Business Credit Card for an LLC?
Generally, you should be able to get a business card for an LLC as long as you’re allowed to do so by the corporation.
As long as you’re either A) the owner or B) an authorized officer with permission to sign for the company, you should qualify.
To do so, you’ll need to:
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Register your LLC and get an EIN
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Establish strong personal and business credit profiles
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Gather all critical information, including your business name, contact information, financial documents, and so on
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Provide a credit card issuer with personal and business details
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Fill out a business credit card application
Can I Get a Credit Card with My EIN Number?
Most credit card issuers require you to provide an SSN. This is especially true if you’re a small business owner applying for a small business credit card.
The main exception is if you’re applying for a corporate credit card. In that case, you can often just provide an EIN.
But for the average small business owner, you likely won’t be able to get a credit card with just an EIN.
Even if it is possible, most credit card companies will be very strict with their eligibility requirements. Therefore, if you’re a small business owner, you should plan on providing an SSN.
Can You Open a Credit Card for Your Business?
In most cases, yes. Although it’s more complex than applying for a personal credit card, it’s certainly possible for many businesses.
As long as you have a business name, a business structure, basic contact information, a federal tax ID, business financials like records of monthly expenses and annual revenue, a good personal credit score of 670 or higher, and have been in business for at least one year, you should generally be able to open a credit card for your business.
Even if you haven’t been in business for a year, you may still qualify for certain credit cards with companies that have more lenient eligibility requirements.
While you may not necessarily be eligible for the best credit cards, as long as you meet the requisite criteria, you should be eligible for at least some cards.