Can I Apply for a Business Credit Card
Gear up to expand your business with a line of credit? Or earn a massive signup bonus, thanks to your side hustle?
In this article, we cover:
- Who can use for business credit cards
- Their pros, cons, and result on your credit
- The application procedure
- Why you lot might want a concern bill of fare even if you lot have a super small business (cough, signup bonuses, coughing)
Whether yous're an aspiring biz mogul or a seasoned entrepreneur, you're going to want to continue reading.
Earlier nosotros get into the nitty-gritty details, yet, here are a few of our favorite business concern credit cards.
| Carte du jour & Rewards | Almanac Fee |
|---|---|
Capital I Spark Cash Plus
| $150 |
The Concern Platinum Carte® from American Express
| $695 (Rates & Fees) |
Ink Business organisation Preferred® Credit Carte du jour
| 95 |
Ink Concern Cash® Credit Bill of fare
| $0 |
Capital I Spark Classic for Business
| $0 |
Wells Fargo® Concern Secured Credit Carte du jour
| $0 |
Who Tin can Utilize for Business Credit Cards?
As you might wait, you must take some sort of business organization to authorize for a business organization credit bill of fare. If you lot're already a minor business organisation owner, feel free to skip to the next section.
But if yous're mostly interested in business credit cards for the signup bonuses, yous might be wondering whether you, too, could qualify.
Luckily, the definition of "business" is pretty lax. Think back to the by year: Did you lot hawk jewelry at the local craft fair? Did y'all do any freelance web design work? Did you sell your old lawnmower on Craigslist?
Any of those activities count as business revenue, and could help you land a small business card. If your business hasn't built concern credit yet, don't worry. About banks await at your personal credit reports when you lot employ for a business concern card, unless your business has already established credit history (fifty-fifty and then, they may yet check your personal credit too).
Insider tip
Business organization cards may suit some freelancers, while others may prefer personal cards or a combination of the two. Explore our list of the best freelance credit cards for help deciding what works all-time for y'all.
How Do You lot Employ for a Business organisation Credit Card?
If y'all've applied for a personal credit card earlier, the concern credit card application won't expect all that different. It'll just have some boosted fields with questions virtually your business on peak of the usual personal information.
Typically, here's what you'll need to provide:
- Business name: If yous have a corporation, LLC, or DBA, use your concern name. If you have a sole proprietorship, use your name.
- Taxation Identification Number: You'll demand to provide your Social Security number (SSN), Employer Identification Number (EIN), or both. Though you don't demand an EIN to apply for a business organisation carte, they're free to obtain — and allow you to fill out tax forms and contracts without sharing your SSN.
- Business blazon or your role: Select the category that best fits your concern, so write a title that describes your function (founder, owner, CEO, etc.).
- Contact information: If you take a dwelling-based business concern, yous can utilize your personal contact (email, telephone number, etc.) info hither.
- Years in concern and number of employees: Simply starting out? Put zero for years in concern, and one for number of employees.
- Annual business acquirement: While it can be tempting to exaggerate this number, don't. Honesty is always the best policy — and banks sometimes ask for paperwork to verify your numbers. You lot'll likely include your personal income on your application, too, and if that and your personal credit scores are potent, you take a solid chance of getting approved.
- Estimated monthly spend: How much you plan to spend on the credit card each month.
You'll likewise demand to provide standard data about yourself, like your personal income and perhaps your monthly housing payment.
Hither'due south an example from a Chase Ink card.
If your application is denied, don't hesitate to telephone call the card issuer'south reconsideration line. Explicate you want the carte du jour to aid you lot abound your business and earn points or cash back rewards, and yous may luck out with a sympathetic rep who approves your application.
3 Different Types of Business organization Credit Cards
The nigh common types of business cards are as follows.
Business Credit Cards
These are like to regular personal credit cards: They have a credit limit that dictates how much yous tin can spend on the card before paying information technology off.
Yous must make a minimum payment each billing cycle, simply you don't have to pay your beak in full , and can carry a remainder from month to month.
While nosotros don't recommend carrying a residuum because it'll incur loftier involvement charges, doing so tin can provide small business owners with a financial cushion during lean months.
Business Charge Cards
Unlike credit cards, accuse cards don't accept a published credit limit. Instead, they take "shadow" limits, which tend to be college and more flexible than credit carte du jour limits. These limits can change over time, depending on your utilize of the card, credit history, and fiscal situation — and going over them could freeze your business relationship.
Another large departure with charge cards: You can't carry a balance, and you must pay your nib in total each month.
These cards can be useful for businesses whose expenses vary profoundly, just can be unsafe if you spend more than you can pay off. Not paying the full balance could lead to penalty fees, as well every bit the disability to brand more purchases.
On the other hand, if y'all demand extra motivation to only spend what yous tin afford, a charge card could be the push yous demand.
Secured Business Credit Cards
If you're a business owner with low or no personal credit, a secured credit card might be your only option. With these cards, you lot put down a eolith (say, $2,000) that serves equally your credit line.
Since payments are usually reported to the credit bureaus, they're a good way to build concern credit until you qualify for an unsecured card.
Pros and Cons of Business organization Credit Cards
If you lot're a minor business concern owner, the main purpose of business organisation credit cards is to carve up your personal expenses from your concern expenses.
Without a dedicated business card, you'll spend the cease of the twelvemonth ripping your hair out while determining which of your 112 Amazon charges are business organization purchases. (Not that I know from experience or annihilation…)
Hither are the other pros and cons of using business organization credit cards.
Pros of Business Credit Cards
- Earn extra rewards and signup bonuses on mutual business purchases
- Take advantage of charge cards without credit limits, or 0% intro APRs while getting started
- Shine out cash flow and have a financial fallback
- Build business credit, in case y'all want to take out a loan in the future
- Go cards for your employees (and collect the points earned past their purchases)
- Avoid high personal credit utilization from concern purchases (every bit long equally yous're responsible with them, business credit cards don't ordinarily show up on your personal credit reports)
Cons of Business organisation Credit Cards
- Might pay a high annual fee
- Personal liability for business charges (more than on this below)
- Could negatively touch your personal credit scores (more on this below)
While many business organization credit cards come with high credit limits, they ofttimes come with high involvement rates, besides. Though yous tin can utilise your credit card to loan yourself money in a compression, nosotros ever recommend paying your bill in full each calendar month, so you can avert paying interest completely.
Also worth noting: The Carte Human activity of 2009, which protects consumers from retroactive rate increases and fees, doesn't employ to business cards. That being said, many business cards however offering these guarantees — so be sure to read the fine impress.
Another Smart Reason to Use for Business Credit Cards
For true rewards credit card junkies, there may come a fourth dimension when you've taken reward of many of the signup bonuses on the market place.
Simplyapplying for business organization credit cards opens up a whole new world of killer signup bonuses.
Take the Ink Business Preferred® Credit Card (Review), for example. It'll requite yous 100,000 bonus points for spending $15,000 in the first 3 months after account opening.
So, fifty-fifty if your business organisation is teeny tiny, you should consider applying for business credit cards. Just be sure to embrace responsible credit use: Pay your bill in full each calendar month, and never spend actress coin to go rewards.
How Do Your Credit Scores Affect Business organization Credit Card Applications?
Did yous know businesses accept credit scores, also?
Three credit bureaus — Dun & Bradstreet, Equifax, and Experian — offer business credit scores on a scale from 0 to 100. But if you're just starting out, you lot won't have any concern credit yet. Which means that fifty-fifty when you're applying for a business carte du jour, credit bill of fare companies will look at your personal credit scores.
Just like with personal credit cards, the card issuer will pull your credit reports later yous utilise. It'll want to see things like a solid payment history, low credit utilization ratio, and long boilerplate age of accounts.
Since each application results in a difficult credit check, y'all should simply apply for cards that match your creditworthiness. (Hither'due south how to check your FICO score for gratuitous.) If you're worried you won't get approved for a card, try applying to a bank or credit matrimony with which yous already take a relationship. That said, a few hard inquiries won't take a meaning touch on on your scores, peculiarly if you accept good credit, and so don't be agape to apply for a card if you really desire information technology.
When y'all employ for a business credit card, note y'all'll probably accept to sign a "personal guarantee." This means you take personal responsibleness for whatsoever debts incurred — and if the business fails and you're unable to pay your bills, the banking company can come up after your personal finances. If you have a well-established business organisation, all the same, y'all may be able to negotiate with the credit card issuer to go a business organization card without a personal guarantee.
How Do Business concern Credit Cards Affect Personal Credit Scores?
In one case you're approved, your business concern carte activities generally won't touch your personal credit scores.
Out of the major credit card issuers, simply Capital letter One reports all business credit carte du jour activity to the personal credit bureaus: TransUnion, Equifax, and Experian. And then all the activity will wind up on your personal credit reports. American Express, Chase, and U.S. Bank only report negative information and delinquencies.
That doesn't mean you should be irresponsible, though; missing payments could cause you to incur late fees and interest charges — and delinquencies could eventually impact your personal credit history.
The Best Business Credit Cards
Set to apply for your business credit menu? Amidst all the shiny card offers out at that place, it tin exist hard to know which to cull.
In improver to finding a card that matches your credit scores, hither are a few things to consider:
- Intro Apr: If you're just starting out in your new concern, a 0% introductory Apr can be very attractive. Many small business organisation credit cards offering this for a year (or more), which ways you won't pay involvement while you're getting your business organization off the ground. While this can requite you some room to breathe, you should strive to pay off the balance earlier the intro period ends.
- Rewards: Nearly business cards have rewards programs that permit cardholders earn miles, cash back, or rewards points you tin redeem for statement credits, travel expenses, or gift cards. Find a bill of fare that awards actress points wherever yous shop most, whether it's gas stations, machine rental agencies, or office supply stores.
- Signup bonus: Speaking of rewards, y'all might also earn a squeamish signup bonus with your new rewards card. Look for one you can achieve without spending more than money than you normally would, and bank check out some suggestions for coming together minimum spend requirements.
- Fees : Take a wait at the annual fees associated with your card, and make certain the rewards are worth information technology. If yous often travel abroad for piece of work — or purchase supplies in a different currency — choose a menu without strange transaction fees.
- Other benefits : Many cards offer purchase protections, expense tracking, travel insurance, and other perks that salvage time and coin. You should besides wait for cards that permit y'all to request employee cards to command business spending across the company, and that integrate with your accounting software.
CREDIT Carte INSIDER'S Tiptop Business organisation CREDIT Bill of fare PICKS
Best for Flat Cash Back Rate
Best for Business Travel
The information related to The Business organization Platinum Bill of fare® from American Express has been collected by Credit Carte Insider and has not been reviewed or provided by the issuer or provider of this product.
Best for Business Bonus Categories
The information related to Ink Business Preferred® Credit Bill of fare has been collected past Credit Card Insider and has not been reviewed or provided by the issuer or provider of this product.
Best for No Annual Fee
The information related to Ink Business concern Cash® Credit Card has been collected by Credit Card Insider and has not been reviewed or provided by the issuer or provider of this product.
Best for Fair or Boilerplate Credit
The information related to Capital letter One Spark Classic for Business organisation has been collected by Credit Card Insider and has not been reviewed or provided past the issuer or provider of this product.
Best for Bad Credit
Read more than The Best Business organization Credit Cards for Bad Credit
Best for Airline Travel
The right airline travel rewards card for your business organisation depends on what airline you travel nigh: Best Business Cards for Airline Travel
Best for Hotel Stays
The best card for hotel rewards and benefits depends on where you stay nigh: Best Business Cards for Hotel Stays
For rates and fees of The Business Platinum Bill of fare® from American Limited, please click here.
Source: https://www.creditcardinsider.com/blog/apply-for-business-credit-card/
Post a Comment for "Can I Apply for a Business Credit Card"