How to Get a Business Credit Card

With their rewards, higher credit limits, and lower interest rates, business credit cards are the ideal financing option for many small businesses. So how do you get started?

Whether you’re looking for extra finance capital or a way to get rewards for your business’s everyday purchases, a business credit card can go a long way toward helping you achieve your company’s long-term goals. But for something so beneficial, there’s still a surprising amount of confusion around how to open a business credit card.

So how exactly do business credit cards work, and how do you get one? Here are the four basic steps.

1. Check your business and personal credit scores

If you’ve ever applied for a personal credit card, you’re probably familiar with the concept of credit scores. Credit scores indicate your financial responsibility. When you apply for a business credit card, though, both your personal and business credit scores come into play.

For most business credit cards, you have to sign a personal guarantee, which means if your business fails, you’re still personally liable for the debt accumulated on your business credit card. So your personal financial responsibility is definitely a factor in the approval process.

Now, if you’ve got bad personal credit, that doesn’t automatically disqualify you from getting a business credit card. You also shouldn’t count yourself out if your business doesn’t have enough credit history or has bad credit. But bad (or no) credit will almost certainly impact the types of business credit cards you’re eligible for, the spending limits on your card, and the interest rates you’ll be required to pay.

Since bad credit can affect your chances of getting approved, we also want to note that every time you apply for a card, it temporarily dings your credit score; that means you don’t want to waste time and potentially hurt your approval chances further by applying for cards you don’t qualify for. So do yourself a favor: check your business and personal credit scores beforehand so you can determine your eligibility for potential business credit lines.

A note about instant approval and easy approval business credit cards

A lot of credit card companies advertise “instant” or “easy” approval on their cards. They also like to send credit card offers claiming you prequalify for a business card. Unfortunately, none of that actually gets you instantaneous approval on a business credit card—it just means you get a decision faster than usual. Just an FYI.

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2. Research your options

Once you know your business and personal credit scores, you can start eliminating any business credit cards you’re ineligible for. From there, you can start looking at your remaining choices and find the card that best suits your business.

There are two things you should keep on your radar: rewards and fees.

Rewards

Most business credit cards offer rewards programs, but each card differs when it comes to qualifying purchases, point limits, card perks, and available rewards.

Be sure to pick out the card that offers the best rewards for your business’s purchases.

Some cards, for instance, let you earn points on only office supply and gas purchases, plus additional rewards points if you spend $5,000 within the first three months. Others allow you to earn rewards on any purchase, but only offer points on your first $150,000 of purchases each year. And once you earn your points, you may be able to redeem them only for airline miles or hotel purchases; other cards offer unlimited cash back or statement credits.

So pick the cards that offer the best rewards for your purchases. You may like the travel rewards with Chase Ultimate Rewards® cards, but if you’re not using your card to pay for online advertising or your business internet, phone, and cable bills (the spending categories that earn the most points with Chase Ultimate Rewards), it may not be the best option for you.

Here’s what you want to scope out before signing up:

  • Which spending categories earn you points
  • Annual point caps
  • Bonuses for big-ticket spending (and time limits on meeting the minimum spending threshold)
  • Rewards offered once you redeem your points (cash back, travel miles, etc.)

Fees

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).

Tax ID number

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.

Your role

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.

Annual revenue

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.

Years in business

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).

Number of employees

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.

Beneficial owners’ info

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.

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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.

4. Build your business credit

Once your credit card issuer approves you for a business credit card, you can focus on building your business credit. The best ways to do that are to avoid regularly hitting your credit limit and keep your account current. As long as you’re paying your bills on time and you’re not carrying a significant balance on your card every month, you should be in good shape to start building your business’s credit history and working toward qualifying for a business loan.

FAQs on how to get a business credit card

What are the basic business credit card requirements?

While small-business loans may require your business to meet specific revenue, credit, and licensing requirements, business credit cards are much laxer. Even sole proprietors (like freelancers, Lyft drivers, and eBay sellers) can qualify for business credit cards.

To get a business credit card, you don’t need to meet any specific credit score requirements, and you can get approved even if you’re a startup with no revenue (yet). However, if you or your business have bad credit, your business is brand new, and you don’t have a good debt-to-income ratio, that may disqualify you from getting certain high-rewards cards. It may also impact your interest rates and other fees.

Can I apply for a business credit card with just an EIN?

Yes . . . and no.

Technically, corporate credit cards don’t require applicants to enter their SSN—only the EIN of the company the applicant works for. With corporate credit cards, the company itself assumes liability for any debts accrued on the card. That means the individual cardholder is not liable for those debts if the company goes under.

However, these types of cards present a lot of risk to card issuers, so corporate cards are not the easiest business credit cards to get. To qualify for a corporate card, your business typically needs to make over $1 million per year. Some card issuers also require your company to have at least a year’s worth of cash reserves.

In other words, most small businesses won’t qualify for a business credit card that requires only an EIN.

How can I get a business credit card if I have bad credit?

Believe it or not, there are business credit cards available for startups with owners who have bad personal credit. You may not qualify for Chase Ultimate Rewards cards with sky-high credit limits and tons of perks—but you’re not completely out of the game either.

Easy business credit cards for bad-credit applicants include the Capital One Spark® Classic for Business card, which gives you 1% cash back rewards on all purchases but includes high interest rates. Or you can always apply for a secured credit card (see below) or a charge card (which requires you to pay off the entire balance on your card every month).

What’s the difference between a secured business credit card and an unsecured business credit card?

An unsecured credit card is what most people imagine when they think of credit cards. Basically, it means your card issuer has approved a line of credit up to a specific limit. You can use your card to spend money up to that limit, and you agree to pay back that amount plus interest over a determined period.

A secured credit card (like the Wells Fargo Business Secured Credit Card) is similar in that you get approved for a line of credit up to a specific limit. However, to get approved, you need to pay a security deposit. This up-front deposit acts as collateral for the card issuer if you fail to make your payments.

Secured credit cards involve less risk for card issuers, so they’re usually easier to get if you have bad credit.

Let’s recap

Opening a business credit card is an excellent choice for many companies, whether they’re looking for loan alternatives or want to build their business credit. But there are a lot of factors that go into getting approved.

We recommend looking up your business and personal credit scores to see which cards you qualify for, then narrowing down your options based on sign-up bonuses, rewards, transaction fees, interest rates, and annual fees.

From there, getting a business credit card is as easy as (honestly) filling out an application.

If you’re looking for financing, we can help. Check out our guide to getting a business loan for more info.

Disclaimers

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