How to get a business credit card

Getting a business credit card is one of the most powerful steps you can take toward keeping your business organized.

It’s a great way to keep your business expenses separate from your personal ones. But beyond that, using a business credit card can help you build a strong credit profile for your business. Credit bureaus track business credit cards and loans when tabulating a credit score for a business.

If you develop a track record of paying your business credit card bills on time and don’t max out your card, it will help you continue to build business credit. So, how do you apply for a business credit card? Just follow these steps:

1. Check your personal credit score

Generally, you will need to personally guarantee a business credit card, and credit card companies will evaluate your loan application based in part on your personal credit history.

If your credit card score needs buffing up, spend three to six months working on lowering your credit utilization ratio — the percentage of your available credit you use — and paying your bills like clockwork. It’ll make it easier to get a business credit card.

2. Decide which kind of business card fits your needs

If you need a little time to build profits, a business credit card can help by allowing you to carry a balance within a preset credit limit from month to month, as long as you make a minimum monthly payment. This can be helpful if cash flow is tight — especially if you can get a business credit card with a 0 percent interest offer for several months.

A dedicated credit card for your business can help you build business credit — but only if the issuer reports to business credit-reporting agencies. Not all do. Before you apply for a card, ask if the issuer reports your progress where it counts.

It’s important to analyze your business’s needs and expenses before choosing a credit card for it. If you’re trying to save money, a simple flat-rate cash back credit card with no annual fee, such as the Ink Business Unlimited® Credit Card, may be just what you need.

But a business credit card with a hefty annual fee may prove worth it for your business. For example, if your business requires a lot of travel, a card like The Business Platinum Card® from American Express will provide you (and possibly your employees) with rewards and perks that can be used for business travel.

3. Gather the business information you’ll need for your application

Review the application before you start entering information so you have all of the documents you need in one place. An application for a business credit card will typically ask you to enter the following information:

• Legal name of business (such as Acme LLC)
• Business name on card
• Business mailing address and phone number
• Type of business (general industry, category)
• Tax identification number (otherwise known as EIN)
• Annual business revenue
• Number of employees
• Years in business

If you don’t have an EIN, you can apply for one for free through the IRS.

4. Gather the personal information you may need

Issuers of business credit cards require you to provide personal income and sometimes monthly expenses. Most ask for the same info they request when you apply for a personal card, in addition to your business information.

For example, under “personal information,” applications for Chase Ink business cards ask for your “title as authorizing officer,” home address, date of birth, primary phone number and email address, and total gross annual income.

5. Submit your application

Many credit card companies allow you to submit your application online, and you can apply for many cards through CreditCards.com. Apply for only one card at a time and see how you fare.

What factors determine eligibility for a business credit card?

Factors that may influence eligibility may include a personal credit score, a business credit score, annual revenue or annual income, the type of business and its financial information. Additionally, if there are red flags in your personal credit history, such as tax liens, bankruptcies, collections or judgments against you, this can have a negative effect on your business application.

To qualify for most business credit cards, you’ll need good to excellent personal credit and a form of income to demonstrate. You may also benefit from having an EIN to apply for a higher-end business card, but it’s not required.

What to do if you get rejected for a business credit card

If you get rejected because you have not built sufficient credit, all is not lost.

If you have no credit or bad credit, you may need a secured business card at first. A secured business credit card often requires you to put down a deposit for the privilege of using the card. While this setup isn’t ideal if you are short of cash, if you can come up with the deposit, it will give you a chance to prove you can use credit responsibly.

If you build up a steady track record of paying your card on time and ideally more than the minimum balance, you should be able to graduate to better credit card deals in the near future.

Bottom line

A business credit card is a great way to keep your business expenses separate from your personal ones. It can also help you build a strong credit profile for your business. Be sure to gather all the personal and business information needed for your application.