Business credit cards are similar to personal cards, but they’re almost always used to cover necessary business expenses. You can qualify for one regardless of whether you’ve structured your business as a corporation or small business. Plus, using a business credit card can help you separate your personal and business expenses.
Before you get a business credit card, you’ll need to provide detailed information about your company, like revenue and number of employees.
Continue reading for more information on how to apply for a business credit and tips to improve your chances of approval.
How to Apply
Below are the four steps you can take to apply for a business credit card.
Check Your Credit Score
When you apply, many financial institutions check your credit to determine whether you qualify. Some credit card issuers state what credit score range your score needs to fall within to be approved, such as fair, good or excellent.
You can check your score using a free credit score app or AnnualCreditReport.com. If you already have a credit card, check with your issuer to see if it offers a free credit score tool.
Gather Required Documents
You typically need to provide the following documents to complete a business credit card application:
— Business name.
— Type of business.
— Business license.
— Employer Identification Number (if you’ve structured your business as a corporation).
— Social Security number.
— Address.
— Annual business revenue.
— Business expenses.
— Number of employees.
— Years in business.
A credit card issuer may also ask you to provide personal information, including address, name and Social Security number, for any business partner that has a 25% or higher ownership stake in the company.
[Read: Best Business Credit Cards.]
Research Your Options
To find the best business credit card for your company’s needs, research and compare your options from several credit card companies. When shopping around, pay special attention to interest rates and fees, sign-up bonuses, cash back rewards, the number of authorized users allowed and travel perks, says Chris Diodato, certified financial planner and founder of WELLth Financial Planning.
For example, if your company requires a lot of flights or hotel accommodations, a business travel credit card might be an excellent choice.
Submit an Application
Once you’ve found the card that matches your business needs, apply online or by phone. If approved, expect to receive your card in the mail within a week or two, depending on the credit card issuer.
Can You Get a Business Card With Bad Credit?
You may have trouble qualifying for a business card with the best rates and perks if you have bad credit. That said, some credit card issuers approve applicants with fair credit scores — often defined as a FICO score between 580 and 669.
If you can’t get approved for a traditional business card due to limited credit history or poor credit, you may qualify for a secured business credit card. Unlike a standard credit card, a secured card requires a deposit that helps establish your credit limit. This can help you establish or rebuild your credit history so you can potentially qualify for an unsecured business card with a higher credit limit in the future.
[Read: Best 0% APR Credit Cards.]
How to Qualify As a Startup
If you are the owner of a startup, getting a business credit card is possible even with no annual revenue. The application process involves most of the same steps as it does for an established business.
— Compare your options. Check with your current bank first to see if it offers business credit cards that fit the needs of your startup. If it doesn’t offer a card that is the right fit, compare offers from other credit card issuers.
— Submit an application. After you’ve found the best business card for you, complete an application. When you apply as a startup, you’ll also need to provide personal and financial information, such as your business’s annual income, business name, type of business and EIN or Social Security number.
How To Get Approved
While there’s nothing you can do to ensure approval, here are some things you can do to improve your chances of qualifying for a business credit card:
— Check your credit reports. Review your credit reports for errors that can lower your score, like accounts you paid on time that are reported as late. If you find any errors, you can dispute them with the proper credit agency.
— Improve your credit score. You can better your chances of approval by maintaining a strong personal credit score, says Jovan Johnson, certified financial planner and co-owner of Piece of Wealth Planning. Some steps you can take to boost your credit score before applying for a traditional business card include paying down debt or rebuilding your credit with a secured business credit card.
— Apply for credit sparingly. Try to space out your credit applications since many lenders perform a hard credit check when you apply, which lowers your credit score.
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How to Get a Business Credit Card originally appeared on usnews.com
Update 03/07/24: This story was previously published at an earlier date and has been updated with new information.
