How to get a business credit card in 6 steps

How to get a business credit card in 6 steps

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According to Forbes, 67% of small businesses use a business credit card for their regular spending, and 31% used the business credit card for fluid capital needs in the 2017 fiscal year. One in ten business owners use the benefits from their business credit cards to finance business expenses, meaning they’re getting paid to spend money for their businesses.  

Choosing the right business credit card for your company can give you better access to capital, help you manage online expenses, and lets you take advantage of rewards that fit your needs. We’re outlining the eight key steps to finding the right business credit card for your company so you can start spending smarter. We’ll cover each of the steps in this process and provide a few helpful tips to maximize your benefits when it’s time to apply for a business credit card.

1. Check your credit scores

When you begin your search for a business credit card, you need to understand your credit history and how it can be affected by a business credit card. Your business credit score is different from a personal credit score, though both are indications of your risk as a borrower. There are four credit scores to know and improve as a business owner: personal credit score, D&B Paydex, FICO Small Business Score, and the Experian Intelliscore.

Your business credit score will determine the types of business credit cards available to you, as well as the interest rates you can expect, and the card’s credit limit. If you have poor credit you can work on improving your business credit score through on time payments or resolving any negative entries on your credit report.

Keep in mind that your personal credit score can affect your business, but your business credit can also affect your personal credit. You’ll likely need to sign a personal guarantee when applying for a business credit card, so failure to pay will fall to your personal credit.

2. Itemize your last three months of purchases

As a smart business owner, you’re likely already monitoring your business expenses closely. But as you weigh your options for business credit cards you may want to take a closer look at everything you’ve spent in the last quarter. Being able to categorize and total your spend can help you determine how your spend and rewards might look with different credit cards.

In particular, you may want to outline and total your business expenses in the following categories:

  • Travel
  • Gas
  • Restaurants
  • Office supplies

This will come in handy later when you need to compare the rewards and point systems of different business credit cards.

3. Find a card that meets your company’s needs

There are so many options for business credit cards out there—it’s easy to get overwhelmed. 70% of Americans use at least one credit card, but many individuals don’t understand the fundamental distinctions of a business credit card. Take some time to understand exactly what sets business credit cards apart. Rather than jumping in headfirst, you can begin with your business lifestyle and general needs to help you narrow the scope of your research.

Consider the different benefits of a business credit card:

  • Introductory 0% APR: Low or 0% no-interest introductory rates are great for making lots of up-front purchases that you won’t be able to pay off right away.
  • Business size: A business of ten or fewer people might look for a small business card that cuts intro APR or useful tools like analytics when you’re running a spartan crew. A small business around a hundred people might be looking for a small business credit card that provides employee cards to facilitate growth.
  • Foreign transaction fee: Are international transactions free or charged the standard 3% fee?
  • Credit card types: If you have poor credit you may not be able to get a traditional business card. Instead you can get a secured business card (which is “secured” by an upfront deposit) or a charge card which functions like a credit card but features lower limits and must be paid in full every month.
  • Travel points: Look for cards that give you travel rewards such as miles and points for transportation, restaurants, hotels, rentals, and other travel expenses.
  • Welcome bonus: Some cards offer a signup bonus for opening a new account, or a bonus after spending a certain amount within an introductory window (e.g. $1,000 back when you spend $5,000 in the first 3 months).
  • Multiple cards or accounts: Do you need cards for several members of your team? Will they need separate accounts? Are there fees or rewards associated with multiple cards? (BILL Spend & Expense allows you to give everyone a company card—for free.)
  • Virtual cards: An option for setting up virtual cards is best for businesses who make frequent online or subscription purchases.
  • Regulations: Business credit cards are exempt from regulations personal credit cards offer, meaning they can change the interest rate and levy harsher consequences for late payments.
  • Reporting to credit bureaus: Some credit card networks will report payment history to all business credit bureaus, while some may report to one exclusively. Determine the credit scoring service you’d like to target and then research the business credit cards that work with that credit bureau.

If one or more of these features is important for your business you can begin your search by targeting business credit cards that offer those features.

4. Predict and plan usage

How exactly do you plan to use your business credit card? Maybe you’ll use it exclusively for travel—booking flights, paying for hotels, or getting taxis. Some businesses get a corporate credit card to finance a large purchase, like a new copier or office furniture. It’s not recommended to share corporate credit cards, so if you will need multiple cards start by predicting how many and who will wield them.

By looking over your past three months of expenses and the ways you plan to use your business credit card it becomes easier to see which cards will provide you the most effective features and limits.

5. Do math on annual fees

Many cards advertise the popular feature of no annual fees. While this can be enticing, it’s important to actually do the math. An annual fee usually comes with better rewards, so the amount you’re paying for that annual fee might actually lead to overall savings.

For example, you might have a choice between a card with 3% cash back and no annual fees and a card with 6% cash back and a $95 annual fee. If you plan on spending more than $3,200 you will actually make more by paying the annual fee to get more lucrative rewards.

It’s simple math to calculate how much you’ll get back with rewards and perks, and if the annual fee is worth it. Use your last three months of expenses, or your projected usage to determine what your rewards would look like with any particular card.

6. Take note of the rewards program

The business credit card market has grown highly competitive, which means that the range of benefits offered by various credit card networks and issuing institutions are growing. Of course most cards offer cash back or rewards points on eligible net purchases, but more specific offerings are available in the form of membership rewards and free services.

A rewards program might include:

  • Bonus points on an eligible purchase
  • Cash rewards
  • Extended warranties
  • Canceled flight insurance
  • Free or discounted car rentals
  • Cell phone replacement
  • Replacement of lost luggage
  • Airport premium lounge access
  • Concierge services
  • Credit score monitoring
  • Access to VIP areas at events or museums
  • Membership rewards such as to streaming services or premium-level accounts

Issuing institutions might offer their own branded reward points and benefits, or sometimes a gift card, so you might see if the banks, credit unions, or other institutions you patronize offer specific benefits for adding a business credit card to your existing account.

While rewards are nice, some things are just more important. What if you had a business card that guaranteed your employees stayed on budget (and that your finance team loved)? Try BILL.

How to apply for a business credit card

Once you’ve decided on the right business credit card for you, you’ll need to fill out an application. The application process for a business credit card is similar to a personal credit card process, however, a business credit card requires a hard check of both personal and business credit scores.

This will determine which company cards you’re eligible for, as well as your interest rates and borrowing limits. For some types of business credit cards and programs you may be required to show income records for the business, or the EIN (Employer Identification Number). Business credit cards also have restrictions on use for payroll, mortgage or rent payments, and certain types of invoices.

Most of these applications are online, but whether you apply online or in person at a financial institution you’ll need the following:

  • Legal business name
  • Business address
  • Business phone number
  • Employee identification number
  • Annual business revenue
  • Age of business
  • Monthly business expenses
  • Personal income
  • Social Security number or taxpayer identification number
  • Date of birth
  • Statements of dispute if there are issues on your credit report

If you’ve got all your ducks in a row, most business credit card applications are processed in just a few hours. As soon as you’ve been approved, you can start spending for your business!

Credit card FAQs

What’s the difference between a personal card and business credit card?

A business credit card usually features a higher credit limit and more lucrative rewards than a personal credit card. However, personal credit cards are much more heavily regulated with more flexibility and buyer protections. Business

What’s the difference between Visa and Mastercard?

Visa and Mastercard are both credit card networks that operate globally and are accepted nearly everywhere. Visa and Mastercard both issue cards through branded relationships with financial institutions and retailers. There are differences in the way they process payments, but most of the differences that will affect consumers come from the card issuer’s offerings, such as cash back, rewards structures, and interest rates.

When should you get a credit card for your business?

You should get a business credit card as soon as you begin making regular, dedicated purchases on behalf of your business. A business credit card provides four major benefits for your company:

  1. Separates business & personal credit—protecting both
  2. Builds business credit with responsible use
  3. Is a source to raise capital
  4. Business-specific rewards

The longer you wait to open a business credit card, the longer you wait to claim these important benefits for your business.

The information provided on this page does not, and is not intended to constitute legal or financial advice and is for general informational purposes only. The content is provided "as-is"; no representations are made that the content is error free.