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7 common business credit card questions answered

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    Quick insights

    • There can be many benefits to having a business credit card and applying for one may be easier than you expect.
    • Business credit cards, like personal credit cards, often offer rewards for everyday business-related purchases.  
    • Applying for a business credit card might impact your personal credit score but it can be a way to help you build up your business credit.

    There can be a learning curve with becoming a business owner. In addition to figuring out how to consistently acquire customers and make sales, you also may be learning how to successfully manage your business income and expenses.

    Business owners looking for ways to help streamline their expense tracking and build credit might want to consider using a business credit card. To better acquaint you with using business cards, we’ll cover some of the most common about getting and using a business credit card in this article.

    What is required for a business credit card application?

    Business credit card applications vary, but you might be surprised by the short list of  information you may need to provide. There are typically not a lot of requirements to apply for a business credit card. In some cases, you may not even need a legal business entity, employer identification number, or even business revenue to apply.

    There are two basic requirements for most business credit cards: good to excellent credit and proof of your identity. You will need to likely provide the following information on your business card application:

    • Your name
    • Date of birth
    • Social Security number or employer identification number (EIN), if you have one
    • Address, email, and phone number (personal or business)
    • Income - this can include business income and income from your employer, if you have one

    Can I get a business credit card as a freelancer or sole proprietor?

    The simple answer is yes, it may be possible. Freelancers, sole proprietors and even gig workers can apply for business credit cards. Having a storefront or employees is generally not a requirement. Neither is having a registered business entity. If you make money independent of an employer, you may still be able to meet the application requirements.

    Do I need revenue to get a business credit card?

    No, you might not need business revenue. It may be possible to obtain a business credit card without proving any revenue derived from your business, but you will probably still need to show income. Absent business revenue, the card issuer likely will analyze your income and personal credit to make a business credit card determination. So, while you might not need to show that your business is making money, you may still need to demonstrate that you have income.

    Do business credit cards impact my personal credit score?

    Applying for a business credit card can impact your personal credit score. Most credit card issuers will run a hard inquiry when you apply. They might rely on your personal credit to help determine your creditworthiness.

    Hard inquiries may affect your credit score, but it’s usually temporary. As a rule of thumb, you generally will need good to excellent personal credit to be approved.

    How do I get a higher credit limit on my business credit card?

    To raise your credit limit, you’ll need to request an increase from your card issuer. Depending on your issuer, you likely can make a request online or over the phone. When determining the credit limit for a business, the card issuer may take a few factors into account, including your:

    When making this request, expect to answer questions about the nature of the request and your financial situation. Once submitted, you may get a decision immediately or it can take up to 30 days for an answer.

    A temporary vs. permanent credit increase

    If you have a big business purchase on the horizon and want to put it on a credit card, you may have another option besides a credit increase. Some card issuers will offer and approve a request for a temporary credit raise that will cover the cost of your purchase.

    If you can increase your credit limit, however, there can be benefits to a higher limit even if you don’t intend to consistently use it. Having access to credit you don't routinely use could decrease your credit utilization ratio. Having a low ratio can be beneficial to your overall business financial profile.

    What are some common benefits of a business card?

    There are several benefits of small business credit cards, from tools to help streamline expense tracking to travel rewards. Some of the most common benefits include:

    • Rewards: Many business credit cards offer rewards, in the form of points or cash back on purchases. Work-related expenses like office supplies, phone lines, internet, and business travel may help you earn rewards. 
    • Expense Tracking: A business credit card may help you track, manage, and separate your business and personal expenses because many business credit cards have robust reporting and tracking features built in.
    • Cash Flow: With a business credit card, you’ll have instant access to credit which could help you manage cash flow.
    • Business Credit: You could have the opportunity to build up your business credit score. This score can aid you in getting access to cash for growth, negotiate better payment terms or secure lower interest rates down the line.

    How do I earn cash back or travel rewards on a business credit card?

    Most business credit cards offer rewards that can include cash back, points or travel perks. This means, for example, that when you buy gas for a company car, hop on a flight for a sales meeting, purchase laptops for your employees or buy office supplies in bulk – you may be able to earn rewards.

    You might then be able to redeem rewards for things like cash back, travel rebates, gift cards and more. The card's terms and conditions will specify how rewards are earned and redeemed. You may want to review it to determine if the rewards structure aligns well with the needs of your business. Also consider that for new business cardholders, there may be a compelling introductory offer, like 0% APR for a limited time or a welcome bonus if you meet certain spending criteria.

    In summary

    Working to build up your business credit history could be a beneficial move for you and your business. Even if you’ve just started your business, haven’t legally formed it and don’t have any revenue, you could still be able to apply for a business credit card. The card issuer may rely on your personal credit when applying which could affect your credit score. But even with that, the benefits of having access to credit and potentially have access to tools to help streamline expense tracking and management can make applying for a business credit card a good business decision.

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