How to Obtain a Business Credit Card

A business credit card is an excellent way to keep your business expenses separate from your personal bank accounts. These credit cards are simple to obtain if you have a clean business record and good credit. Spend some time looking for the best deal to ensure that you get the right card for your company. Once you’ve decided on a card, you can apply online or in person.

Part 1 Qualifying for a Business Card

1. Create a company or a sole proprietorship. Any job that pays the bills qualifies as a business for a credit card. Selling handmade goods, tutoring, freelancing, or landscaping are all examples of this. Because the bank will require documents pertaining to your business, you must first establish your business before applying for a card.

To apply for a business credit card, you do not need to form a corporation or limited liability company. However, these will help protect you from becoming personally liable for your company’s debt.

A sole proprietorship is a business in which you are the sole owner. This indicates that you have not incorporated your company. If you are self-employed, you should think about incorporating your company to protect yourself from being personally liable for your company’s debts.

2. Improve your personal credit rating. To be eligible, the primary cardholder on the account must have a good credit score. Even if your business does not yet have a credit score, a good personal credit score will qualify you for lower interest rates and better rewards.

  • You can increase your credit score by paying bills on time, paying back loans, or correcting mistakes on your credit report.
  • To check your personal credit score, go to https://www.annualcreditreport.com/.
  • A credit score between 690-719 is considered good, and credit above 720 is considered excellent. You may have more trouble getting a card with credit under 620.

3. Establish credit for your company. A good business credit score is not required for all credit cards, but it can assist you in obtaining a good deal with lower interest rates and better rewards. A good score is one that is greater than 75. There are a few options for establishing credit for your company. These are some examples:

Getting a business credit report from a company like Dunn & Bradstreet, Experian Business, Equifax Business, or Business Credit USA.

Creating payment lines or payment plans with vendors and suppliers

Borrowing from banks that report to credit bureaus

On-time repayment of business loans

Part 2 Finding the Best Deal

1. Shop around at different banks and credit unions in your area. If you already have a relationship with a bank, you can start there, but you should also consider other banks. Get quotes from several banks and credit unions to ensure you’re getting the best possible rate.

A physical visit to a bank will allow you to speak with a representative and consider all of your options. If you’re not sure what type of credit card you’ll need for your business, this is a good option.

2. Look for online specials. Online, you can also find a variety of credit card offers. Many major credit agencies will let you apply online, and they may even give you a discount if you apply through their websites.

American Express, Chase, Capital One, and Citibank are among the major credit card companies that provide cards. You can find and compare these businesses online.

You can also use credit comparison tools like those provided by Nerd Wallet or Bank Rate.

If you know what you want in a credit card, doing your research online is a good idea. However, if you want to speak with someone for advice, you must call their customer service number.

3. Examine each company’s interest rates and fees. Obtain quotes from each bank or company you are considering. These quotes will include the annual percentage rate (APR), which tells you how much interest you owe on your credit card debt each year. You should also look into the fees that the bank charges for debt transfers, late payments, and cash advances.

If you need to transfer high-interest debt to a credit card, look for one with no or low transfer fees.

To build credit, you should ideally pay off your card’s balance every month. If you believe you will need to carry a balance on your card, choose one with a lower APR.

4. Determine which features your company requires. Many business credit cards offer rewards and perks that can give you a competitive advantage in your industry. Examine the different types of offers you’re getting and choose a card with features that will be useful to you.

If you travel frequently, look for a credit card that offers airline miles as a reward or that offers bonuses when you use it to book hotel rooms, car rentals, or plane tickets.

If you buy supplies for your business on a regular basis, a simple cash reward system will suffice. You will receive a refund of 1-3 percent of the money you spent.

If there will be more than one cardholder, consider a card with a spending limit to ensure that no one can overspend on the card.

Part 3 Applying for the Credit Card

1. Fill out the application with your company’s legal name. Use the same name as on your company’s utility bills, bank account, and tax bills. If you own a sole proprietorship and do not have a formal business name, you can use your own name instead.

The application will request your personal information, as well as the age of the business, its address, and its phone number. You may also be required to state how much revenue the company generates each year.

The application can be completed in person at a bank or online through the credit card company’s website.

2. Give your Employer Identification Number (EIN) or Social Security Number (SSN). Only one is required. If you have an EIN for your business, use that instead of your SSN. If your business is a sole proprietorship without an EIN, provide your SSN.

3. Provide copies of business documentation to verify your company’s legitimacy. You may require 2-4 documents to prove the legitimacy of your company. If you’re submitting online, make copies of these documents or scan them. You can provide proof in the following ways:

  • Business bank account statements
  • Utility bills for the business’s facilities
  • Tax returns for the business
  • Business license

4. Allow time for approval. Some banks will approve you right away, while others may take a little longer. Once you’ve been approved, you can look over the card’s interest rates and rewards. If you like them, you can accept the credit card and set up an account with them.

5. As soon as you receive your card, activate it. The card will be mailed to your business address. Sign in to your account online or call the number on the card to activate it. To activate the card, follow the on-screen instructions. You can now use the card for business transactions. 

It could take up to two weeks to receive your new business credit card.

6. If you were rejected, reapply at another company. If you were denied for a credit card, you can reapply at a different bank. However, making too many credit applications at once can have a negative impact on your credit score. Consider a secured credit card, which requires a deposit, or a business charge card, which must be paid in full at the end of each billing cycle.

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