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February 21, 2024

Business credit cards offer some of the best rewards. Here’s how to get one.

Business credit cards offer some of the best rewards. Here’s how to get one.

When starting up a new business, you typically need to hire employees. To do so, you create a list of qualifications, hold interviews, and select the best person for the role. Choosing a business credit card is a similar process: you should “hire” one that fits your industry and works hard to make you money.

By the same token, if you caught your credit card routinely leaning on a shovel instead of contributing to your business, you’d fire it. You’re effectively writing off a portion of your income if you make purchases on a card that doesn’t give you an excellent return. After all, business credit cards have some of the most valuable benefits and generous welcome bonuses in the rewards credit card world.

Let’s look at how to get a business credit card–and who should consider it.

What is a business credit card?

A business credit card is just what it sounds like: a credit card targeted toward businesses.

The idea is to give business owners a separate payment method from the credit cards they use for personal expenses. This simplifies things when looking for transactions that can be written off for tax purposes.

Depending on the size of your business, you may need a business credit card to keep your operation running. Michael Kuhn, SVP and Team Lead at Cambridge Savings Bank, makes the critical point: “The absence of credit in many businesses would have a detrimental effect on the long-term sustainability of the business; specifically meeting payroll, vendor payments or ability for the business owner to achieve their long-term goals.”

That said, sole proprietors with minimal expenses can also benefit from a small business card. Even if you drive for Uber as a side gig, it’s still wise to quarantine business purchases such as gas, car payment, auto insurance, etc. for the sake of simplicity.

For the most part, business credit cards work the same as personal credit cards. The difference is that they come with business-focused perks, such as advanced spending tools, free employee cards, and bonus points for everyday business purchases.

Additionally, it’s possible to write off any interest you’ve accrued on your business cards (or personal cards)–as long as the APR you’re paying is from a business expense.

Do business credit cards affect personal credit?

Most small business credit cards affect personal credit in a few ways. First, card issuers will (usually) check your personal credit to decide if you’re someone to whom they want to extend credit. This hard inquiry will drop your credit score by a few points, but it’ll rebound within a few months as long as you continue to use your credit responsibly.

“Your personal credit rating certainly has something to do with [you] getting a business card, as that’s what the bank will be running,” says Neal Furlong, Senior Wealth Advisor at Hightower Wealth Advisors. “Typically, the owner has their personal financials tied to the bank accounts, so they’ve got personal guarantees.” In other words, if your small business credit card becomes delinquent, it’ll almost certainly show up on your personal credit.

However, many small business credit cards don’t report regular (non-delinquent) activity to consumer credit bureaus. That means that credit utilization and payment history across your small business cards won’t appear on your personal credit report.

Can you get a business credit card with EIN only?

It’s possible to open a business credit card solely with an EIN (Employee Identification Number). The benefit of keeping your Social Security number out of your application is that you don’t need a personal guarantee if your business flounders.

However, you can only apply for a business credit card with EIN if it’s a corporate card. To boot, you must have solid business credit to qualify–which (usually) means you’ve:

  • Long since registered your business
  • Applied for business credit with a business credit bureau
  • Made considerable revenue

If you operate a smaller business (like a side gig), don’t count on opening a credit card without entering your Social Security number.

How to apply for a business credit card 

If you’re wondering how to get a business credit card for a new business, just know it’s similar to opening a consumer credit card. There are often a few extra questions during the application process, but things are mostly self-explanatory.

1. Figure out if you qualify

Business credit cards are exclusively for businesses. If you don’t operate a business (any venture that produces income, no matter how small), you should not apply.

Also, if your credit score lives in the basement, you may not qualify for a small business credit card. Remember, card issuers will run your personal credit to approve you for a business card.

2. Find a business credit card that complements your lifestyle

Between the nature of your business and your credit score, search for a credit card that:

  • Fits your spending habits
  • Offers ongoing benefits that outweigh the annual fee (if there is one)
  • You can realistically be approved for

You can find all categories of small business cards for your financial goals–from travel rewards to cash back to 0% intro APR. 

2. Get your information ready

Small business credit card applications ask questions such as your business’s name and description, annual business revenue, number of employees, EIN, and business structure.

Many of these questions are easy if you’re applying as a sole proprietor. For example:

  • Your EIN is simply your Social Security number.
  • The name of your business can be your own name.
  • The number of employees can be “1.”

If you operate another type of business, such as an S Corp or LLC, you may need to gather some extra paperwork in order to complete the application. Tax reports, profit and loss statements, and your articles of organization (if applicable) may be helpful to have on hand.

How to get a business credit card for a new business

Even if your business is just getting started, it’s still possible to open a small business credit card. Banks understand the desire for business owners to keep business expenses separate, and they may approve you even before you’ve earned your first shiny red penny.

One step to improve your chances of being approved for a business credit card while your empire is still in its infancy is to open a business checking account with the bank that issues the business card you’re after. This relationship could give you an edge, but may not be necessary if you have excellent personal credit. Don’t be alarmed if the application is sent through a review process rather than giving you an instant response; this is a normal part of fraud protection.

Frequently asked questions about business credit cards

Who should get a business credit card?

Anyone who operates a business should look into a business credit card. The benefit of sequestering your personal and business transactions can be a massive boon during tax season when identifying deductible expenses–and you can earn lots of rewards while you’re at it.

How do I get a business credit card without a business?

You cannot get a business credit card if you don’t have a business. Don’t even try.

However, it’s very possible that something in your life qualifies as a business–whether you realize it or not. For example, if you rent your car via Turo, drive for Lyft, or deliver food with Grubhub, you can form an LLC to operate as a legitimate small business.

What credit score do I need for a business credit card?

There is no one-score-fits-all when it comes to opening a business credit card. Every card demands a different credit score–and even an excellent score doesn’t guarantee approval. However, most rewards credit cards stipulate that you should have at least a 670 FICO credit score.

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