How to Get a Business Credit Card: The Ultimate Guide

Business woman is using her small business credit card to pay for her lunch at a restaurant

Access to capital is often one of the biggest financial concerns for any small business owner, and small business credit cards are a popular financing option, as they offer fast and easy access to credit.

In fact, a recent survey of more than 500 small-business owners with annual revenues or sales under $1 million found that 46% regularly use a business credit card. Among those who don’t, 7% planned on applying for one within a year.

How were these small business owners using credit cards to benefit their business?

According to the survey, common expenses charged to the cards included:

  • office supplies
  • equipment and product costs
  • gas for business vehicles
  • phone and internet charges
  • business-related travel
  • And more!

And thanks to low interest rates, generous spending limits, and significant rewards and perks packages, it’s easy to see why anyone — from solopreneurs and freelancers to small companies with employees — might choose to do the same

Whether you want to find the best credit card to track your business expenses, make a large purchase, or earn rewards on day-to-day office spending, we’ll help you decide how to know which card is best for your business.

Read on to learn about the benefits of applying for a business credit card, how you know you’re ready to get one, and how to apply.

Benefits of Getting a Business Credit Card

Getting a business credit card is helpful if you need more money to operate your business. But it goes deeper than that. There are several benefits for business owners who apply.

You want to build credit.

It’s likely that you have a personal credit card, and with that card, you’ve been able to build your credit score.

But there’s more than one kind of credit you can build. Business credit scores are scored differently than personal credit scores. While personal credit scores are typically in the 300-850 range, business credit scores range from 1-100.

As with an individual’s personal credit score, your score will be judged and calculated by different organizations than the ones who evaluate your business credit score. We’ll go over how credit reporting works later in this article.

Each score is tied to the credit cards you use, which is why when you’re thinking of how to get a business credit card, you want to choose carefully.

Unlike personal credit, the dings against your business credit aren’t something that you can refute. Once transactions are made, the writing’s on the wall. If a purchase impacts your score negatively, you won’t be able to do much about it.

You’ll get paid to sign up.

One thing to pay attention to when applying for a card, is which cards are offering a sign-up or welcome bonus. You’ll know which cards do, as the marketing will often be boasting this as a huge benefit.

The type of bonuses offered will differ, depending on the brand of business card you choose, but many offer cash rewards, travel points, or points equating to another defined benefit.

Oftentimes, in order to get the benefit, you’ll have to spend a specific amount of money within a certain amount of time after signing up. For example, one brand of business card may offer you $600 after you spend over $15,000 within the first 3 months of having the card; another may offer 15,000 travel points if you spend over $10,000 within the first month.

As a small business owner, perks like these are great bonuses when establishing your company, and they do a great job of influencing you to start your operations off strong from the get-go.

Note: Keep in mind that just because the sign-on reward sounds great, it doesn’t necessarily mean the math adds up in your favor. Think about how you would use the card in order to get the reward and how that may impact your business to see if it’ll be worth it.

You can reap the rewards.

The rewards for business credit cards go beyond just the sign-on bonus. Every credit card comes with a different assortment of perks and rewards.

For some cards, this means cash rewards, or waiving the annual fee for the first year; others won’t charge an APR until after 12 months.

For other cards, this means points toward hotels, restaurants, gas stations, cellphone providers, and airlines. Some have partnered with other brands that will match points earned on a spend, which incentivize you to spend more with the card on specific items.

When you’re considering which card is best for your business, you’ll want to think about which perks you’ll use most. Are there any that would be particularly helpful for your business? Some perks are nice-to-have but won’t make a dent in your savings.

For example, you could get points at hotels, but you know you aren’t planning on any business travel for at least a couple years. In this case, the credit card reward may not be worth much to you.

On the other hand, what if you’ve noticed more business opportunities in a neighboring town? That could mean that a reward with gas points goes further in your favor.

You can write more off your taxes.

You may be familiar with tax deductions that you’re able to claim for your small business.

Did you know that you can also deduct payments that you made with your business credit card?

You can! It may not always be the smartest decision financially (that’s something you’ll have to determine!), but it is possible. It can even help you deduct the cost of your small business insurance, which we’ll get to in a bit.

If you’re planning to invest in large items like pieces of equipment you need for your job, it may be something to think about when you consider which credit card may be best for your business.

If you have questions about tax deductions for using your business credit card for business purchases, we recommend reaching out to a tax expert such as an accountant or tax lawyer.

You can protect your small business financially.

Having a business credit card is a great way to create a paper trail for yourself. And keeping track of these small details can protect you financially in more ways than one.

As a business owner, it’s easy to get lost in the weeds of your goals, customer needs, and daily operations, meaning it’s easy to forget expenditures.

It’s easier to keep track of what you spend and how you spend it by using the card as a tracking system. We mentioned tax season earlier, but this is a good way to protect yourself if you’re ever audited.

Having a business credit card can help give you a picture of what your business’s future may be, based on its present.

Unfortunately, there are a lot of things that owning a business doesn’t prepare us for. We can set ourselves up for almost any situation, and still, things happen that we just didn’t see coming.

That’s where business insurance coverage comes in.

Having business insurance coverage protects you against a variety of things a customer could sue you for.

Whether it’s property damage, bodily injury, a third-party accident, a negligence claim, or one made against your reputation, business insurance coverage helps to protect you from costs that could be detrimental to your business.

An accident that occurred in just a few seconds could end up sinking you financially and resulting in a claim citing one of the above instances.

Here’s an example:

Say you’re a photographer doing a family shoot in a field. The sun is shining, you’re capturing the light beautifully, and the family is in good spirits. Then, one of the children trips and falls over an extra tripod you had lying on the ground.

The child falls and breaks their wrist. The family has to take them to the emergency room, and obviously the photoshoot is cut short. The family sues you for damages.

Now that is the kind of thing you may not see coming but definitely could happen.

Without a business insurance policy, you could be responsible for the cost of the child’s medical bills — and the time the family lost in their photoshoot, all on your own.

Medical bills can get hefty and could put you in a hole you can’t easily dig out of. Not to mention that the family will tell their circle of friends about the accident.

With business insurance coverage, though, your policy could help with the medical bills, as well as any legal claims that may result from a related lawsuit.

Did we mention that you may be able to use your business credit card to buy your small business insurance and count it as a write-off during tax season? Talk to a tax expert to learn how your policy could shield you against what-ifs.

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Signs You’re Ready for a Business Credit Card

Maybe you’re just getting started. Or maybe you’ve been in business for some time. Whatever the case, when you’re deciding how to get a business card, “Am I ready?” is a logical question.

When it comes down to it, no one can really tell you whether or not you’re ready for something as a business owner. Knowing when to take steps toward a business’s goals is up to each business owner personally.

That said, there are some general indications that you may be prepared to apply.

Your books are solid.

You feel like you’re in a good spot financially. You have business coming in at a steady rate and are confident in your monthly cash flow. You make enough money to cover what you spend regularly.

If you have employees, you’re able to make payroll for them without worry that you may not be booking enough business to make that happen.

And if you’ve got extra expenses, you’re able to pay them in a timely manner.

You’ve weighed the pros and cons.

Deciding which credit card is best for your business isn’t so different from any other big decisions you’ve made in your life.

Just like other big decisions, be sure to weigh the pros and cons of the business credit card(s) you’re considering. Some perks or rewards may feel like huge benefits, but do they outweigh the small print that feels more like a consequence?

Make a list of pros and cons. Pros like 0% APR and great rewards points are always something to look forward to, but how do they stack up against how much you need to spend to make those reward points worth something? How long does that 0% APR last?

Do your best to consider each aspect of the credit card you’re considering.

You have your eye on a loan.

Depending on your business plan for the future, you may decide to apply for a small business loan.

If you’re considering purchasing something for your business that you think you’ll be able to pay back in a relatively short time, you can choose to pay for it with your small business credit card.

But what about larger purchases?

In that case, where you may need to buy something that will take longer to pay back, you may choose to apply for a small business loan.

Banks and organizations that grant loans will look at different factors in your application to see how reliable you are and how likely you are to pay back your loan on time. Having a good small business credit score can help to boost your case here.

It also helps your case, as it shows that you separate your business expenses from your personal expenses. Your business credit score is a good indicator of how capable you are of managing your business’s spending.

There are different score ranges, depending on how the organizations are reporting. That said, on average, you want to aim for a score in the 80- to 100-point range.

In some cases, you may already have taken out a loan, but even though it served you well at first, you may realize that you need to apply for a more substantial loan. With a good small business credit score, you can graduate from a smaller loan to one that offers additional funding.

Regardless of the loan amount you’re applying for, if you have a business credit card, you’re more likely to be approved than not if you have a favorable credit score.

Your employees are spending now, too.

As your business grows, your headcount may too. If you decide to hire employees to help with business operations, then they likely will be spending money on certain expenses, too.

It isn’t always easy to have employees spending on behalf of the business, though. It can be hard to keep track of! After all, you’re hiring employees to make your job easier, and you can’t be with them all the time.

If that’s the case, then a business credit card is a good option to help keep track of what they spend and what you spend. Your business’s card can help you do that, because each expense will be noted on your statement, making it easy for you to see how much is being spent.

Depending on which small business credit card you get, you may be able to get a separate card for your employee to carry in their name.

You’ve reached your personal credit limit.

It can take business owners a bit of time to realize they need to separate their personal finances from their business finances. In fact, it isn’t unheard of that a business owner will use their personal credit card to help fund the business.

And it may make sense at first. It’s hard to predict how much spending you’ll do in your first months of business.

But eventually, you may hit that personal credit card limit. After all, the bank only gave you, an individual, so much. For some business owners, one large piece of equipment would max out a personal credit line.

Are you regularly hitting your personal credit card’s spending limit?

With a business credit card, you’ll have a new limit to move toward, and this time, the credit you’re impacting will be solely your business’s, instead of your personal credit score.

Although you won’t be using your personal credit card for your business anymore, you still want to protect your credit score, and switching to two separate cards —one for your business and one for your personal expenses, can help you do that by separating your spending.

How to Get a Business Credit Card

By now, it may be obvious that getting a credit card for your small business is a smart move (at least, we hope it is!).

But where do you start?

The first step is deciding that you’re ready to get a card for your business, so, see there? You’ve already crossed one step off the list.

Next, you’ll have to decide which credit card works best for you and your business.

Find which small business credit card works for you.

Of course, what works for one small business owner may not be as beneficial to another —- each business and its needs are different.

As a result, you’ll want to look at a few different factors that will impact how the card works for you. Remember your pros and cons list? Get that out again as a reference.

You also may want to take out your business plan so you can consider the different short- or long-term goals you hope your credit card can help you reach.

Credit card reward structure

We mentioned the rewards of business credit cards early on. This is where that pros and cons list comes into play again. What are the rewards that each card offers and how much do they matter to you?

For some business owners, a reward is nice-to-have, but it doesn’t make their life as a business owner better. Keep that in mind when considering the reward structure of each card.

Think: will this reward truly benefit me in operating my business regularly, or is this just a perk I can enjoy here and there?

You may have to roll up your sleeves and do some simple math. Trust us — it’s worth the extra time.

By the way, this is great practice in general of being a business owner. Many companies and organizations may market specific perks to you, but it’s up to you to decide what you feel will be in your business’s favor in the long run.

Annual fees

Annual fees are another factor you’ll want to consider when thinking of how to get a business credit card and which one may benefit your business the most.

Not all credit cards for businesses come with an annual fee. If they do, though, pay close attention to what other benefits are available with the use of the card.

For example, if you pay an annual fee, that may offer the ability to get cash back on more items (like regularly bought necessities) than would typically be eligible.

In some cases, the sign-up bonus you get for the card may be enough to offset the cost of the annual fee, making getting the business card worth it after all.

Credit reporting

Just like personal credit scores, business credit scores are reported by different credit bureaus. Here are a few corporations that report on business credit cards:

Experian BusinessEquifax BusinessDun & Bradstreet (D&B)

When purchases are made, some may be reported to the above credit bureaus, meaning it will affect your overall business credit score. But not all cards report spending to the credit bureau.

If it isn’t apparent how a specific card will report your spending, check with someone in customer support, because that’s a big factor that will determine how positive your score is. It can easily be overlooked in the excitement and details of getting your business credit card, so pay close attention.

Apply for your small business credit card.

Now comes the part where you take action using what you know and apply for a business credit card.

Most credit card issuers will allow you to apply for a credit card for your business online. While their approval requirements vary, the information they collect through the application is usually similar and likely to include:

  • Your name and the legal name of your business
  • Your EIN (employer identification number) or Social Security number*
  • Your business contact information
  • The industry your business is in
  • The industry your business fits within
  • How long you’ve been in business
  • The number of employees you have
  • Your personal and business annual revenue
  • Your personal and business outstanding debt
  • Your estimated monthly business spend

In some cases, the information you provide will depend on your situation. For example, if you’re a solopreneur or freelancer, your personal income and business income may be the same number

If you’re a freelancer, you likely don’t have an EIN, so will use your Social Security number. And unless you have opened a bank account and file your business taxes under a specific business name, the name of your business may just be your own name.

If you did register for an EIN and can list that instead of your SSN, this would help you to separate your business finances from your personal finances.

Review the personal guarantee.

Almost all business credit cards include a personal guarantee. Pretty self- explanatory by name, this basically means that when you apply for the credit card, you’re guaranteeing that you’ll pay back the debt you incur if your business fails.

While it’s scary to think about, there is a possibility that your business won’t be successful. And since they’re businesses themselves, credit card companies include this language to protect themselves.

It’s standard language that you’ll find on nearly every card. If you can’t find information confirming that a specific card includes a personal guarantee, check the company website or call customer support to confirm before applying.

If you have any questions about what language is included in the personal guarantee, it’s a good idea to clarify things before submitting your application.

Choose your card carefully.

We’ve talked about how important attention to detail is in this process, as well as how crucial it is to get clear on your motivations for getting a card for your business.

Before you apply, prioritize your options. If for some reason you apply for a business credit card and are denied, then applying for another one right away could have a negative impact on your personal credit score.

Read the small print on the credit card application carefully.

Wait for a response.

As with regular credit cards, getting a business credit card will take a bit of time.

What does “a bit” mean, you ask? It really depends on a few different factors, like how the credit card company works, what your current business credit is (if you’ve established any), your personal credit score, how many credit cards you’ve applied for in the past 6 months, and more.

The good news is that if you’re denied, you’ll likely be told immediately, and why you were denied.

If not, then you may be kept waiting anywhere from a day to 10-14 business days.

How to Get a Business Credit Card with Bad Credit

There is a chance that if you have bad personal credit or have already established business credit that is less than ideal, you may have a hard time getting approved for a business credit card.

A score from 580-669 is fair, but anything from 300-579 is considered a poor credit score.

But just as there’s still a chance that you could get a small business loan despite bad credit, there’s hope when it comes to business credit cards too.

Apply for a secured business credit card.

If you’re turned down for any of the small business credit cards you apply for, one of your options may be to apply for a secured business credit card.

Secured business credit cards are excellent options for business owners who lack a personal credit history or have a low personal credit score. They can be financial lifesavers, enabling you to build or improve your credit.

For the most part, a secured business credit card works similarly as a regular business credit card. You’re able to purchase items for your business, just as you would with an unsecured credit card.

With a secured small business card, though, you will put down a refundable cash deposit. The amount of the deposit varies, but you can expect at least a $500 deposit requirement.

The issuer will then give you a credit limit, and you can use the secured card as you would any other credit card: making purchases and timely monthly payments.

Although you may not be happy about the initial deposit, if you have bad credit, then applying for a secured business credit card is a great way to work on improving your business credit score.

Later on, when your score is improved, you may choose to apply for an unsecured business credit card.

Get a cosigner for your credit card.

You may have heard of cosigners for loans and other sources of funding. When it comes to applying for a business credit card with bad credit, you may have the option — depending on the card — to elect a cosigner.

If you do, that means the cosigner agrees to take on any debt you incur while the card is in your name.

Maintaining Your Business Credit Card

By now, you’ve decided whether or not you’re ready for a small business credit card, done your research, and applied.

Hopefully, you’ve been approved. Congratulations!

But wait — just because you have the card, doesn’t mean that the work stops there.

Unlike personal consumer credit cards, the CARD Act does not protect business credit cards. This means small business credit card issuers can change your interest rate at any time without notice.

In fact, a recent WalletHub study of business credit card issuers found that only 19% wait until a card holder is at least 60 days’ delinquent on payment before raising the interest rate on their existing business credit card balance. This means the total cost of your debt can change at any time, making budgeting difficult.

The last thing you want is to get into debt, so once you have your business credit card, you can take the following steps to help maintain healthy business credit.

Be careful who you give card access to.

If you’d like your employees to have access to the business credit card, you have the option to add them as an authorized user.

Each business credit card is different, but you can usually add authorized users for free. Unlike with personal credit cards, their credit score won’t come into play. However, you should still proceed with caution.

If your employee(s) happens to spend a great deal using the credit card, it will still be on you as the business owner to handle the debt. Keep this in mind when deciding who you want to give access to your business credit card.

When you set up authorized users, take time to explain the limits you’ll be placing on the credit card. If there are specific items that you want your employees to purchase using the business credit card, clarify what those items are.

Many business credit cards allow you to set up spending limits and alerts for when you’re nearing or reaching your limit. You may not think it’s necessary to put these into place when you add an authorized user, but business spending can add up, so better safe than sorry.

Don’t mix personal and business financials.

We’ve mentioned it a couple times in this article, but mixing your personal finances with your business finances can lead to a lot of extra work for you down the road.

Come tax season, it’ll be doubly difficult for you to sort through which expenses belong to you and which belong to your business. In some cases, you could even face getting audited, which is never fun and almost always time-consuming. And as a business owner, we realize your time is valuable.

You can save yourself some pain up front if you do your best from the beginning to separate your business spending from your personal spending. Even something as simple as keeping the credit cards in different places in your wallet can help you avoid creating the troublesome habit of mixing the two

Remember to reap your rewards.

Almost every business credit card comes with rewards and perks. You probably listed quite a few of them if you wrote out the pros and cons list we talked about earlier.

So, even though we as business owners recognize these rewards exist, we don’t always put them into practice. Each time you make a purchase, consider how that purchase will impact your overall rewards.

Will it move the needle? If yes, then what do you do?

Business owners are so busy. You may get your card and be so busy that you forget to follow up regarding rewards. Check your spending on at least a biweekly basis so you can track the charges.

Pay close attention to your mail.

Speaking of tracking things, that includes your mail. Now that you have a credit card for your small business, you’ll receive statements in the mail (or online).

While you may be tempted to leave a letter from your credit card carrier on the incoming mail pile until the end of the month — don’t. Especially as you get used to having the card, try to build the habit of double-checking your statement every month.

It could be that your statement is correct and every purchase for your business is there and shown correctly. Or for some reason, it could include an error or two. And a mistake on your statement could impact what you pay and in the end, your credit rating.

The attention to detail here is especially important if you have any employees, as you’ll want to track what they’re spending too.

We can’t predict what’ll happen, but like anything with your business, you want to pay close attention.

Track your cash flow.

By monitoring your credit card activity on a monthly basis, you’ll slowly be able to see the impact it has on your operations. The close attention you pay could help you notice trends in your cash flow that are either helping or hurting your business.

Is there anything you end up liking about your credit card that you didn’t expect? What about disliking? Keep note of these observations so you can access them again. If things go well and you are able to track positive trends, then you may want to apply for another card in the future, and your notes will be helpful.

You’re Ready to Use Your Small Business Credit Card

Phew, that was a lot. But all of the info above can help prep you on your path to get a business credit card.

If you’re still on the fence about your decision and thinking about how to get a business credit card, take a deep breath.

As business owners, we make decisions each day. Consider your pros and cons list and make the best decision, based on what you know. You may be hesitant to take this leap, but you’re ready!

Allison Grinberg-Funes

I’ve told stories since I learned to talk and written since I could hold a pen. As a small business owner myself – I’m a freelance writer and yoga teacher – I love contributing to the entrepreneurship community in different ways (including writing for Simply Business!). When I’m not drafting articles for SB, I can be found on my yoga mat, perusing an indie bookstore, and writing (with my cat nearby of course).

Allison writes on a number of topics such as small business leadership, business structures, and employee training.