You’ve also got to scope out the fees associated with each card you’re eligible for. If you do a lot of business overseas, for instance, you wouldn’t want to sign up for a business credit card that charges high foreign transaction fees. You should also try to avoid cards with high annual fees, transaction fees, and over-limit fees. And you’ll definitely want to research which cards offer the lowest annual percentage rates (APR).
Doing this preliminary research helps you maximize your savings and get the most bang for your buck. Plus, if you prioritize applying for the best cards for your needs, it can help you avoid excessive credit checks (which again, can temporarily lower your credit score).
So to recap, keep your eye out for the following fees on any potential new credit card:
- Annual fees
- Annual percentage rate (APR)
- Transaction fees
- Foreign transaction fees
- Over-limit fees
3. Fill out the application
Now for the fun(-ish) part: filling out your business credit card application.
You can usually fill out your business credit card application online, so it’s a relatively painless process. The only thing you have to remember is this: don’t lie on your application.
Seems like a no-brainer, right? But it can be a real temptation to estimate or inflate your annual revenue to look better on your application (especially if you’re a brand-new company that hasn’t made any money yet). But lying on your application is illegal, and the card issuer will be able to tell if you’re stretching the truth.
So do yourself a favor and tell the absolute truth on your application—even if that means admitting you have $0 in annual revenue or you’ve been in business for 0 years.
Here’s what you’ll need.
The legal name of your business
Credit card issuers need to know the name you’re doing business under. If you’ve registered your company as an LLC or a corporation, make sure to use the same name you’re licensed under. If you’re a freelancer, you can use your legal name.
Business address and phone number
Applications for small-business credit cards also require you to provide a business address and phone number. If you don’t have a brick-and-mortar location or a PO box, you can use the address for whatever location you use to run your business (such as a home address).
Just like personal credit cards, business credit cards require credit checks, so you’ll need your tax ID number. If your business is licensed, that’ll mean entering both your employer identification number (EIN) and your social security number (SSN). If you’re a freelancer, it’s fine to enter only your SSN.
Quick note: certain types of business credit cards require only an EIN. But unless you’re running a multi-million dollar business, you probably won’t qualify.
Industry and nature of your business
Some businesses are riskier than others, so credit card companies will want to know which industry your business fits into and the type of business you’re running. Just pick the option that most closely describes your company.
You’ll need to tell card issuers your role within your company. If you’re a freelancer, feel free to list yourself as the president, CEO, czar, or whatever other title floats your boat.
Business type and structure
Is your business an LLC? A corporation? Are you the sole proprietor? That can impact your application, and (depending on the card issuer) it may affect whether you can get a business platinum card, a small-business card, or some other type of business card offered by the card issuer.
It is vital that you enter your annual earnings accurately. While business loan requirements include a minimum revenue amount, business credit cards don’t. In other words, you’re eligible for a business card even if your company hasn’t raked in any cash yet. So don’t try to estimate future earnings or inflate your cash flow—that’s illegal, and it’ll get you automatically denied.
If you’ve been in business for a year or more, the card issuer will want to look up your past earnings to try to estimate your average annual cash flow. The longer you’ve been in business, the easier it is to estimate your future earnings and determine your risk factor.
If you’ve been in business for less than a year, though, make sure you enter a “0”—don’t round up (unless you’d rather not be approved, that is).
Credit card companies will want to know how many people you employ. This number gives card issuers a better understanding of your yearly expenses compared to your revenue, which paints a better picture of your riskiness as a borrower.
Estimated monthly spending
Another way credit card companies assess your riskiness as a borrower is by analyzing the expenses you plan to put on your business credit card every month. So if you use cash to pay for office supplies, but you want to pay for your office utility bills on your credit card, you’ll need to know how much you’re spending on those bills every month.
Business credit card applications also require you to list the names, birth dates, SSNs, and home addresses of anyone who owns 25% or more of your business. This requirement is pretty much applicable only if your company is a corporation or has stock options.
And FYI, credit card companies do not pull credit scores for beneficial owners, so you don’t get bonus points if your beneficial owners have good credit scores.
You should also keep in mind that many website builders offer free hosting as part of your plan. But in general, we advise against hosting your site with your website builder. Website builders tend to focus more on offering a quality builder than on delivering the best uptime rates and page load speeds, so your customers will likely have a better experience if you pay for your web hosting and website builder separately.
What to do if your application is denied
If your application is denied due to poor credit history, you may have to focus on building your business credit first. In the meantime, you can apply for a secured credit card (which requires an up-front security deposit) or a charge card (which requires you to pay your balance in full each month). Or you can use your personal credit cards to cover small expenses.