Although business credit cards are primarily used to keep your personal and business expenses separate, there’s an even better reason to get one. Experts use business credit cards as a way to double up on many of the available credit card bonuses. Read this guide to find out what a business credit card is, why you want one and which card is right for you.
What Is a Business Credit Card?
A business credit card is a tool that allows businesses to keep their expenses separate from the owners of the business.
Most of the features and benefits of business credit cards are similar to what you have on your personal credit cards. However, you’ll often find that the bonus categories are geared towards what a business will spend on.
For example, the Citibank AAdvantage Platinum Select World MasterCard gives 2 miles for every $1 spent on dining and gas stations, whereas the business version of the Citibank credit card earns 2 miles per $1 on telecom, car rentals, cable and gas. At the same time, you can get 2 miles per $1 spent on every purchase with Capital One Spark Miles for Business without limitations.
Capital One® Spark® Miles for Business
- Limited Time Offer: Earn up to 200,000 bonus miles worth up to $2,000 to spend on travel—flights, hotelsand more.
- Earn 50,000 bonus miles when you spend $5,000 in the first 3 months and earn 150,000 bonus miles when you spend $50,000 in the first 6 months of your account opening
- Earn unlimited 2X miles per dollar on every purchase, everywhere, no limits or category restrictions, and miles won’t expire for the life of the account
- Earn 5X miles on hotel and rental car bookings through Capital One Travel (SM) using a Spark Miles card.
- Transfer your miles to 10+ leading travel loyalty programs like JetBlue (TM), Air Canada, and Emirates (TM).
- Redeem your miles instantly for any travel-related purchases, from flights and hotels to ride-sharing services.
- Fly through security with one statement credit for either the $85 TSA Pre✓® application fee or the $100 Global Entry application fee
- $0 intro annual fee for the first year; $95 after that
Is My Business Too Small for a Business Credit Card?
You don’t need to run a multi-million dollar business to get approved for a business credit card. Banks understand that businesses of all sizes need to borrow money and pay their bills.
Whether your business has $1 in revenue or millions of dollars, you can qualify for a small business credit card. Banks love to build strong relationships with businesses that are small and offer services to help them grow.
Do I Need a Business to Get a Business Card?
When we talk about how to get a business credit card, you may not think this applies to you. But that’s not necessarily true. You may own a business and not even realize it.
Do you sell on Etsy or eBay? Own any rental properties? Have you ever been paid to provide expert advice? All of these situations (and more) are considered businesses. I have small business credit cards for my rental properties and other side hustles.
Here’s how to open a business credit card without owning a business. Your business doesn’t have to be started, yet. You could be thinking about starting a business and still qualify to open a small business credit card.
And you don’t even need to have a formal business name. Your business name on the application could be your first and last name.
What Are the Requirements to Get Approved for a Business Credit Card?
To apply for a small business card, you first need to pick a card out that will work best for your business. Here is our beginner’s guide to choosing the right credit card.
Once you’ve found your ideal business credit card, the process is very similar to personal credit card applications you’ve submitted. You’ll need the following information:
- Contact information
- Social Security number
- Work name, address and phone number (Note that it’s okay to be employed by a different company then your small business. I have done this for years.)
But you’ll need a few more pieces of information about your business:
- Business name
- Employer Identification Number or Social Security number
- Contact information
- Company structure (sole proprietorship, LLC, corporation)
- Number of employees
- How many years have you been in business? If you are just starting your business, you should say “zero.”
- Annual revenues. If you are just starting your business, you should say “zero.” Another suggestion is to list how much revenue you forecast earning.
Whatever you do, do not lie on the application. Some banks will request supporting documentation to validate your revenue.
While going through the business application process, you can ask to have additional credit cards mailed for your employees to use.
What Should I Look for in a Small Business Credit Card?
Before explaining how you can get business credit card, we need to go over what you should look for in a new card. When selecting a credit card, you want benefits that will enhance your business.
Here are some of the features you should look for:
- The ability for every cardholder to have their own credit card number to easily track spending. This enables you to allocate expenses to clients or projects and ensure employees are spending on what they should.
- The capability to set specific credit limits for each card to limit your risk.
- Bonus categories that align with your spending patterns.
- Reasonable fees relative to the benefits you receive.
- A credit limit that is reasonable compared to your expected use.
Do I Need to Provide My Social Security Number?
As the owner of the business, you will have to provide your Social Security number when applying for a small business credit card. Although the application is for your business, the bank will make a decision based on your credit score and history.
One common myth about business credit cards is that you need an Employer Identification Number (EIN) to get approved by the bank. When submitting your business credit card application, your sole proprietor business can use either your Social Security number or your EIN.
How Do I Apply for an EIN?
If you don’t already have an EIN, applying for one is simple and fast. Go to the IRS website application and complete the form. The whole process takes less than 5 minutes.
When your new EIN is issued, write it down or print it out. A letter with your EIN should be mailed to you within a couple of weeks.
You can start using your new EIN immediately, so be sure to write it down and keep it in a safe place.
What Are the Best Business Credit Cards?
When someone asks me, “what are the best business card offers?” I reply with, “it depends.” There is a credit card option that is perfect for each small business. But what works well for one small business isn’t always the best option for another small business.
Take a look at your business financial statements and see which categories you spend the most on. Most likely, there is a credit card that offers bonus points for those categories, such as office supplies, gasoline, travel, shipping, dining and online advertising.
Worst case, you can always open a business credit card that offers cash back on every purchase. My favorite is Capital One Spark Cash for Business because of its 50,000-point sign-up bonus and the ability to earn 2 miles on every dollar you spend. The American Express SimplyCash Plus Business credit card is another great option because of its 5% cash back in office supplies and 3% back in your choice of 1 out of 8 popular categories.
Capital One® Spark® Cash for Business
- Limited Time Offer: Earn up to $2,000 in cash bonuses
- Earn a $500 cash bonus when you spend $5,000 in the first 3 months and earn $1,500 when you spend $50,000 in the first 6 months of your account opening
- Earn unlimited 2% cash back for your business on every purchase, everywhere, no limits or category restrictions
- $0 annual fee for the first year; $95 after that
- Free employee cards, which also earn unlimited 2% cash back on all purchases
- $0 Fraud Liability if your card is lost or stolen
- Rewards won't expire for the life of the account, and you can redeem your cash back for any amount
- No foreign transaction fees
There are a number of Chase business credit cards that I like, too. The Chase Ink Business Preferred is a great all-around card that has a generous 80,000-point sign-up bonus and earns 3x points on the first $150,000 you spend on travel, shipping purchases, internet, cable and phone, and online advertising.
I also have the Chase Southwest Rapid Rewards Premier Business card because it helps me earn my Southwest Companion Pass. It helps that Southwest is my favorite domestic airline, and I earn 6,000 points each year I renew the card.
We’ve curated a list of the best business credit cards available, so you can choose the card that will work best for your situation.
Will This Business Credit Card Affect My Credit?
Because banks ask for your Social Security number on the application, the inquiry will show up on your credit report. Any time you apply for credit, there is a small decrease in your credit score for the inquiry.
As long as you keep your account current and in good standing (i.e., pay on time), most banks do not report business credit cards to the credit bureaus. Because they aren’t reported, having a balance on a business credit card does not affect your credit score. Capital One and Discover are the exceptions to this rule.
“…having a balance on a business credit card does not affect your credit score. Capital One and Discover are the exceptions to this rule.”
If you’re looking to have more positive accounts on your credit report, the Capital One Spark Cash for Business or the Discover it Business (coming soon) would be great additions to your wallet. For those looking to keep business credit cards off their personal credit report, look at cards from Bank of America, Barclays, Chase, Citi or other banks.
It’s Time to Apply for a Small Business Credit Card
Now that you know how to get a business credit card, you’re ready to apply for a small business card. You have applied for your EIN. You’ve analyzed your business financials to determine which categories of expenses you spend the most on. And we’ve reviewed the best business credit cards to find a card that fits your needs. All that’s left is to click apply, get approved and wait for the card to arrive.