Getting a business credit card is easier than you may think

You can qualify even if your business is tiny, or you're a gig worker

Beth Braverman
Personal Finance Writer
Covers cool and trendy credit card stories

Getting a business credit card is easier than you may think

When it comes to starting a new business, there are plenty of things to stress out about, from getting the right logo to the appropriate tax structure, not to mention securing clients and funding.

But there’s one rite of passage for new business owners that’s easier than you may think: getting a credit card for your business. Whether you have a small business with a few employees or you’re a gig economy worker, you shouldn’t have much trouble getting a business credit card if you want one.

“Some people think you have to be successful or have been in business for a certain period of time to get a credit card, but that’s generally not the case,” says Gerri Detweiler, head of market education of Nav, a credit service for small business owners.

Here’s how the business credit card application process works, along with some reasons why you may or may not want to apply for one. 

How to apply for a business card 

The process of applying for a business card is fairly straightforward. You can apply online or by responding to a direct mail solicitation. Business credit card applications typically require you to enter your company's employer identification number, which you can get from the IRS, and its legal name.

You may also be prompted to enter how much revenue your company earns and what it typically spends per month. You'll likely have to fill in personal details such as your annual income and your monthly mortgage or rent payment amount, and your role in the business. 

Eastchester, New York, resident Angela Schultz opened her Chase Ink Business Cash Credit Card account a few months after launching her physical therapy practice.

She got the card at the same time as she opened her business bank account at a local Chase branch.

“I had to bring in my articles of incorporation to show I was a business to open the business bank account,” she says. “Then I just set up my credit card through them. They asked for annual income, and a couple other basic questions. It was not complicated in any way at all.” 

Your personal credit may be on the line

If your business is small or doesn’t earn much revenue, the issuer will use your personal credit history to determine whether or not to approve your card. While that makes it easy to secure approval, it also means that you’re personally guaranteeing the card with your finances. 

If your business goes bust, you’ll still be on the hook for any balances on the card. Some issuers report all payments to credit bureaus, while others only report missed payments or defaults.

Once you have the card, making regular payments on it will allow you to start building up your business credit profile. Once that’s established, you’ll be able to open cards and take out loans separate from your personal finances. It can also make it less expensive to access money for your business.

“When you’re applying for a loan, having a good business credit profile can be the difference between a low interest rate and a high interest rate,” says Krista Tuomi, a professor at American University and an expert on entrepreneurial finance.

See related: How to multiply rewards on everything you buy for your business

A business card’s rewards can be lucrative

Getting a business credit card is fairly easy, but there are things to consider when choosing the best one for your needs.

Business credit cards typically have higher limits than personal credit cards and may offer rewards that cater specifically to business owners, such as deals or bonuses on business cell phone plans or office supplies. If you or your employees travel often for business, look for a card that offers rich travel-based rewards.

Some business cards come with an annual fee, so it’s worth doing the math to make sure that your typical spending would net rewards worth more than the cost of the fee. That’s worked out well for Dawn-Marie Joseph, who runs several businesses in Williamston, Michigan, including a floral shop and an estate-planning firm.

For each business, she evaluates the value of the potential rewards and how she’ll use them. She’s also a landlord, and she has had luck using the rewards on business cards from her local bank to help recoup some of the expenses associated with upkeep on her properties.

“I don’t think I’ve paid for an appliance in 15 years,” she says.

Of course, if you think there’s a chance you’ll carry a balance on the card, ignore the rewards completely and look for the card that offers the lowest interest rate without a fee. 

"When you're applying for a loan, having a good business profile can be the difference between a low interest rate and a high interest rate."

Business cards help keep personal, business spending separate

Most business cards also allow you to add multiple employees as authorized users on your card, making expense-reporting and reimbursement easier as the business grows. Many business cards also come with online tools that let you monitor your company’s spending as a whole and by employee.

One of the biggest benefits of business cards is that they make it much easier to keep your business and personal expenses separate.

“It’s just so much easier to keep track of taxes and expenses for my business,” Schultz says. “It’s great to have when I go away for a course or am out for a networking lunch.”

See related: Is my small-business payment history reflected on my credit reports, scores? 

Business cards have fewer protections for cardholders

While business credit cards do offer protection against fraudulent use, they are not covered by the Credit Card Accountability and Disclosure Act of 2009, which covers most personal credit cards. 

See related: 10 ways business credit cards are different

“From the standpoint of federal law, there’s nothing that could prevent the credit card issuer from raising the rate on a business card at any time for any reason,” Detweiler says.

Unlike with consumer cards, issuers are not required to send your business credit card bill 21 days before it's due, nor do they have to bill you on the same date every month.

Business credit cards also have no limits on late fees or over-limit fees. The CARD Act caps consumer card late fees at $25 or the cost of the minimum payment (whichever is less) and forbids over-the-limit fees greater than the amount that the balance exceeds the limit. 

You may not need a business card at all

If you’re a sole proprietor or a gig economy worker and record-keeping is the primary reason for getting a business card, you may be able to achieve that without even opening a business card. Instead, open a new personal credit card, or designate an existing one, as being for business use only. That way you’ll get all of the benefits of separate accounting without the risk of lower consumer protections. 

But if you feel a business credit card would help you save on operating expenses, organize your accounting and strengthen your company’s credit, applying for one can be a cinch. 


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Updated: 10-17-2018