Business owners know every penny they spend counts. When it comes to making the most of business transactions, using a business credit card can be a rewarding strategy.
Business credit cards can offer a range of benefits. These include rewards or cash back, loyalty points, travel protections and expense management. The key to finding the best business credit cards for you is identifying which of those factors matter for your business and determining what you value most: rewards, cash back or help with building credit.
What Is a Business Credit Card?
A business credit card is a line of credit issued to a small business or sole proprietorship. Business credit cards allow business owners to keep business and personal expenses separate. By doing so, record keeping is easier—especially at tax time.
How Do Business Credit Cards Work?
Business credit cards operate just like personal credit cards with the exception that the card may have a different rewards structure or offer different protections.
What Are the Types of Business Credit Cards?
The two most common types of business credit cards are either small business cards or corporate cards. The cards on this list are small business cards, which can be applied for without establishing a custom financial arrangement.
Small Business Credit Cards
Most cards marketed as business credit cards target small businesses. These cards help business owners manage finances while earning rewards and reaping benefits designed for small businesses—intro APR periods, free employee cards, zero liability protections and purchase or travel protections. Many of these cards—including the best business secured cards—are also designed to help businesses build credit or—like the best credit cards for new businesses and startups—manage everyday purchases during business infancy.
Corporate Credit Cards
P-cards, or purchase cards, also known as corporate credit cards, are typically only offered to businesses with significant annual expenses—think a quarter million dollars in yearly expenses or more. These cards typically offer many of the same features small business credit cards do but on a much different scale and with much different management. Corporate cards are often managed by large programs designed to cater to corporate expense tracking systems and may have different fee structures, reward structures and perks built in.
How Many Business Credit Cards Should I Have?
How many business credit cards are right for you or your business is up to you and your specific needs. Carrying multiple business cards may allow you to earn more varied rewards, maximize your cash-back potential, provide a more comprehensive set of benefits and more, but it’s worth realizing ahead of time that managing multiple accounts means more time, more monitoring and paying more bills.
Benefits play into a decision to carry multiple cards, too. If your cash-back card offers extended warranty benefits but no travel protections, you may want a separate business card to use for booking business travel. Benefits may be often overlooked in favor of rewards, but the value of many benefits can easily outpace rewards in the case of many insurances and protections offered by the best business cards.
How To Get a Business Credit Card
When you’re ready to get a business credit card, you’ll need to gather some information in order to apply. Be prepared with:
- An Employee Identification Number (EIN) or Social Security number (SSN)
- Basic business information, including the age, address and structure of your business
- Annual business revenue
- Estimated business spending
- Personal income information
You can apply online, by phone or in person at a local branch, if available.
How To Get a Business Credit Card Without a Personal Guarantee
Establishing business credit can be difficult, and some cards will require a personal guarantee. This means an individual (usually the one applying for the card on behalf of the company) will be held liable for any balances left unpaid on the card. For individuals who don’t want to be tied to a business account, there are cards available that don’t require a personal guarantee, such as the Brex Card.
How To Get an Instant Approval Business Credit Card
Most cards that let you apply online will let you know right away if you are approved. Occasionally the bank may want additional information before giving you a credit line, but if it’s a “yes,” you’ll usually learn when you apply.
How To Get a Business Credit Card With Bad Personal Credit
For small business cards, your personal credit score is often considered as part of the application process. If you have bad credit, you’ll need to limit the cards you consider to those that are designed for anyone with poor or limited credit history. Business secured cards are the most accessible option for those who can afford the deposit required to secure the card. Other options include improving your credit score before applying or looking for cards that don’t require a personal guarantee.
How To Get a Business Credit Card for a Startup
When applying for a business credit card, it’s acceptable to put $0 for revenue, which is often the case with a startup. Banks will take into account any other income sources as well as the applicant’s personal credit score and previous relationship with them (a personal checking account, for example) when deciding whether or not to approve a business credit card.
How To Get Approved for a Business Credit Card
When you apply for a business credit card, you may be asked for:
- Your name, date of birth and address
- Your business name, inception date and industry
- Your Social Security number (SSN)
- Your business’ Employer Identification Number (EIN)
- Your personal income
- Your annual business revenue
Not all information may be required. For instance, an EIN is typically an optional provision. You may also be required to list your ownership percentage of the company.
How To Build Business Credit
Building business credit works in the same way as building personal credit—by using it and paying off the bill on time and in full each month. However, businesses can also do a few other things to help establish credit.
Registering a business and obtaining an Employer Identification Number (EIN) from the IRS will establish a credit file for the business. Then that business can open vendor accounts (accounts with suppliers, for example) that report payment history to business credit bureaus. Another number that will help build business credit is a D-U-N-S Number, which can be obtained from Dun & Bradstreet, a business credit reporting agency.
Of course, opening a business credit card is one of the best ways to build business credit. Small businesses, even startups, can be eligible for business credit cards, so this is often step number one for businesses looking to build a credit history.
Who Should Get a Business Credit Card?
Any business that intends to charge purchases should get a business credit card. Keeping personal and business expenses separate is a good rule-of-thumb for accounting purposes. Additionally, getting—and responsibly using—business credit cards help to build your business credit history which can be useful when applying for future loans or other financing.
How To Compare Business Credit Cards
With the many different types of business credit cards available in 2024, picking the best business credit cards can be a lengthy process. Prospective cardholders have multiple factors to take into consideration before landing on the best match:
- Annual fee
- Rewards structure, including earning rates and redemption options
- Introductory APR
- Ongoing interest rates and other card fees
- Financing options
- Card benefits, credits and offers