A founder’s guide to business credit cards

Mitchell Tessier
Mitchell Tessier
A man enters his credit card information on his mobile phone.

Virtually all businesses, regardless of industry and size, benefit from a business credit card. They allow you to build a credit history, increase cash flow, and keep your personal and business finances apart—not to mention that with the right card you can even earn rewards to help keep your business running smoothly! 

But if you do an online search for business credit cards, you’ll likely become overwhelmed. With the multitude of options on the market, it can be difficult to know where to start. Luckily, we can help with that. 

Why should I apply for a business credit card? 

Many founders think that since they own a small business, like a sole proprietorship, they won’t benefit from a business credit card. But that’s not true! Regardless of the size and type of business you have, securing a business credit card is a step in your financial progression that certainly shouldn’t be overlooked. Here’s why. 

Reason #1: Business and personal don’t mix

While it’s not a requirement when owning and running a business, it’s usually good practice to keep your personal and professional finances separate. This is for both organizational and legal purposes: separating your finances will make things much easier during tax season and protect your personal savings from any potential legal troubles with your business, should they arise. 

Reason #2: It’s a great way to build business credit

You’re already building a personal credit history with your personal credit cards, so why wouldn’t you do the same for your business? Your business credit will be tied directly to your company, including any spending and payments you make on behalf of the business. This can come in handy further down the line, if and when you seek to secure a loan through banks or other means. Just like a personal credit score, a business credit score gives the lender a sense of your trustworthiness as a borrower. 

Reason #3: You’ll have access to working capital 

Not only will a business credit card help set you up for success as a founder, but it can actually help you run the day-to-day by giving you access to working capital. Particularly if you’re a small business, you may have had trouble securing financing through more traditional means. Business credit cards allow for near-instant access to a line of credit, meaning you have the available funds needed to grow your operations. 

Reason #4: Don’t forget the perks

Odds are, you signed up for your personal credit card in part due to the rewards program. Whether that’s in the form of redeemable points, cash back, or gift cards, a big bonus of signing up for a credit card is the perks. Same goes with a business credit card: you’ll have the opportunity to gain rewards that you can then use towards your business, further accelerating growth. 

Am I eligible for a business credit card?

The majority of businesses can qualify for a business credit card. Certain requirements are more straightforward than others, but for the most part when applying you should come prepared with the following information:

  • Your business’s legal name 
  • Your business’s contact information
  • Industry type
  • Your business entity (i.e. corporation, partnership, LLC, etc.) 
  • How long you’ve been in business 
  • Number of employees
  • Your tax information
  • An annual business revenue and estimated monthly spend (if you’re a startup, some card issuers will consider your personal annual income instead).
  • Your total annual income 
  • Your legal name, contact information, and SSN/SIN 
  • Your personal credit history
  • A personal guarantee (usually in the fine print, it essentially holds you personally and financially responsible for the repayment of the credit card bills). 

How to get a business credit card

Whether you apply for one online or in person, the application process for a business credit card is fairly straightforward. Before you begin the application, however, it’s best to ask yourself the following as you consider all the options available to you:

  • The business credit card requirements: Not all business credit cards are the same. Some are geared specifically towards startup businesses, while others need you to have been in business for a certain amount of time. 
  • 0% intro APR period: This is a great option for those looking to build business credit. You’ll be able to roll over your credit card debt month over month with zero added interest during a set period of time (usually somewhere between 9 and 12 months). 
  • Annual fees: Like personal credit cards, business credit cards (especially those with appealing rewards) come with a price: a yearly fee charged by the card issuer. Consider how your business is taking advantage of the rewards program; it might be worth paying that annual fee depending on the perks you’re enjoying.
  • Which bank to apply to: For a lot of founders, it makes sense to apply for a business credit card with an institution with which you have an existing financial relationship. They’ll already have a history of your credit, so you’re more likely to get approved (provided you’ve got an acceptable credit score, of course).

When is the right time to apply for a business credit card?

While there’s no exact ideal time to apply for one, most would agree that there’s no time like the present. The earlier you acquire a business credit card, the sooner you can experience the benefits of one, including building a credit history and accessing working capital. For that reason, it should really be one of the first financial decisions you make as a business founder. So what are you waiting for? It’s time to get started on those applications!

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