Business Credit Cards  

You probably have at least one personal credit card that you use to make purchases and receive some kind of rewards. A business credit card is intended for business purchases and expenses. Business credit cards help you manage your business expenses separately from your personal finances, build your business credit score, and improve future financing opportunities. They typically come with perks or rewards like personal credit cards do, so you can capitalize on rewards while also building your business credit.  

Business credit cards are offered by many lending institutions and banks, with a similar application process to a typical personal credit card. Business owners typically don’t need to provide an employer identification number, business credit card, or proof of revenue to apply. Credit cards often have instant decisions with an automated application process. This makes it easier to get approved for a business credit card over a business loan. However, business credit cards often have slightly higher interest rates than business loans because credit cards are unsecured. The unsecured nature of business credit cards puts them at higher risk for lenders.  

In general, a business credit card works just like a personal credit card. You can make purchases for business expenses using the card and have a monthly payment toward the balance of the card. There will be a set APR you’ll be charged each month you have a remaining balance.  

Business credit cards are a great tool for any business owner and offer unique advantages for business owners looking to build credit and grow their business. 

Manage expenses 

It’s always recommended for business owners to keep their personal and business finances separated. Separate finances ensure accounting is better managed for your business and your taxes are filed correctly. Having a different credit card for business expenses makes this separation a lot easier to manage and ensures your business is set up for success. 

Earn rewards 

Business credit cards can offer a variety of rewards or special perks, designed to entice businesses and cater to their unique needs. These benefits can include: 

• Cash back on frequent purchases (such as office supply stores, shipping, etc) 

• Travel perks (airport lounge access or frequent flier miles) 

• Sign-up bonuses 

• Introductory 0% interest rate for a short period of time 

• Flexible repayment terms 

There are different credit cards to suit different business needs. For example, if your business has irregular cash flow, a card with flexible repayment terms could be best suited for your needs. Or, if you travel frequently for business, finding a card with great travel rewards would benefit you. 

Flexible enough for every business 

Business cards are flexible for any business at any stage. Startups or side hustles can easily qualify for a business credit card without established revenue.  

Build business credit 

Having established business credit helps your business qualify for financing opportunities. When applying for a loan, line of credit, or other financing, lenders typically want to evaluate your business’s credit score. Making regular, timely payments and keeping the balance below 30% of your available credit helps build your business credit score. 

There are some downsides to a business credit card you should consider before applying for one:  

Personal guarantee 

Businesses often do not have the minimum requirements needed for credit scoring – which is why a personal credit score is used for application – but that also means a lender can’t accurately determine a business’s creditworthiness. Because of this, a lender may ask for a personal guarantee to act as a contractual obligation and hold the business credit card holder personally responsible for payments incurred.  

Fewer consumer protections 

While there are numerous protections for personal credit cards, many laws made business credit cards exempt from their protections. While some credit card issuers voluntarily extend those protections to their business cards, business owners should check the card agreement before making assumptions.  

A business credit card is technically a type of line of credit, but credit cards and lines of credit have some key differences.  

Line of credit	Business credit card
Higher credit limit.	Lower credit limit.
Deposits cash into your account when you draw an amount.	Primarily used for purchases. Cash advances come with a high advance fee.
May be secured by collateral.	Not commonly secured.
Typically, no rewards.	Often have rewards or cash back for spending.
No interest-free period.	May include 0% interest promotion for a specific time when you sign up.
Lower interest rates.	Higher interest rates.

What should you choose? 

While a business line of credit might not be suited for smaller businesses just starting out, a business credit card is suited for every type of business. New businesses can benefit from building credit and established businesses can reap rewards on their business expenses with a business credit card.  

However, if you are an established business and in need of larger access to capital, a business line of credit or business loan can support your growth. 

Applying for a business credit card is fairly simple. You can use your Employee Identification Number (EIN) if you have one, or just use your Social Security Number. Lenders will primarily look at your personal credit score to determine your creditworthiness and credit limit for your business credit card.  

Once you have determined your credit card needs and shopped around lenders, you should take a moment to gather your application materials.

While requirements will vary by issuer, you can generally assume you’ll need the following to qualify for a business credit card: 

Personal information 

• Your credit score. You’ll typically need at least good credit (generally a FICO score of 690 or higher) to qualify for a business credit card.  

• Personal information like your SSN, address, email, and phone number. 

• Annual income (include all income, not just what you make from your business). 

Business information 

While you need a business to apply for a business credit card, you don’t necessarily need a formal business entity or history of business to qualify. Startups without proof of revenue or hobbies that occasionally bring in revenue can apply for a business credit card.  

• Contact information for your business. 

• Time in business. 

• Number of employees. 

• Business category, type, and structure. Choose what most closely aligns with your business. 

• Federal tax ID or EIN. 

• Business revenue and expenses. Include an estimate of how much you anticipate charging to the card each month.