How to Qualify for a Business Credit Card
The Rules Are Different From Consumer Cards
Business credit cards can be a great tool for business owners and employees. They can help to cover business expenses, while also earning rewards and perks that can be reinvested back into the company. For small business owners and entrepreneurs, business credit cards can also help separate business and personal spending.
We’ll look at some of the key benefits and how to qualify for a business credit card here.
Why Get a Business Credit Card?
Business credit cards are intended to give business owners and employees a payment method for business-related expenses—they are not meant for personal use. As such, the benefits and perks that you may find on business cards will usually be tied to business spending categories like travel, office supplies, telecommunications, or shipping.
Business credit cards also make it easier to track business expenses—many offer expense tracking compatible with popular accounting software—while providing a line of credit for times when you might need to make an on-the-spot purchase for the business.
The consumer protections that are covered by the CARD Act of 2009 do not necessarily apply to business credit cards. Business card issuers have more leeway for grace periods, how much notice you get about changing terms or interest rates, how your payment gets applied, and fees. Although many issuers still offer favorable terms, read your business credit card agreement carefully.
Who Can Get a Business Credit Card
To apply for a business credit card, you have to own a business or be an employee authorized to apply for the card.
Qualification requirements for business credit cards vary by issuer. For example, according to an American Express spokesperson, business owners, as well as up to 99 of their employees, can be eligible for an American Express Business Card account as long as they are authorized by the company to make financial decisions on its behalf.
“We offer a variety of business card products to help entrepreneurs and long-standing business owners, in any industry and at any stage of their business journey,” the Amex spokesperson told The Balance in an email.
To apply for a Wells Fargo business credit card, your business must be established for at least six months to apply, a Wells Fargo spokesperson said in an email to The Balance.
“Wells Fargo will verify the business exists and is in active status as part of its due diligence, using public record websites so the customer does not have to provide proof,” the spokesperson said.
When you apply for a business credit card, issuers will still look at your consumer credit history. Most business credit cards require good to excellent credit scores (670 and up).
“A strong personal credit score is a measure of financial health and can be a critical factor in determining eligibility for both personal and business cards,” the Amex spokesperson said.
Issuers will typically consider your business’ financial health, too, including a look at revenue, business credit score, and the repayment capacity of both the business and the owner, Wells Fargo’s rep said.
Business revenue can also help determine credit-limit size.
Don’t Lie About Your Business
Card issuers will vet your business, so it’s not a good idea to try and pitch a hobby or small side gig as a full-fledged business. Wells Fargo says doing so could result in a decision to decline and American Express could put your account in default if it suspects you provided false business information in your application.
For Chase business cards, the application includes a requirement that you agree to several conditions, including:
- You or your employees will use the account for business and not personal, family, or household purposes.
- You are liable, both individually and jointly with the company, for payment of all balances.
- You are authorized to request this business card account.
- Rewards are redeemed for the company's business purposes only.
- If you leave the company, you are still responsible for all account balances until the account is closed and paid, or a new authorized user is substituted on the existing account.
Finding the Right Card
Choosing the right business card for your needs depends on a few factors.
Size of Your Business
If you’re a solo practitioner, your spending levels will be very different than a larger company that has a dozen authorized cardholders. Just like with consumer cards, there are business credit cards that are more entry-level (no annual fee and basic rewards), while others are more premium for big-spending business users.
Perks, Benefits, and Spending Requirements
You want to find a business card that aligns with your business’ spending style and offers rewards you can maximize and reinvest back into the business.
For instance, the CitiBusiness AAdvantage Platinum Select Mastercard is geared toward business travelers who fly American Airlines, offering complimentary checked bags on American flights, preferred boarding, and earning frequent flyer miles on purchases. The card would be a good fit if your business requires frequent travel and you don’t mind limiting yourself to American Airlines flights.
If you’d rather earn cash back instead of airline miles, the Spark Cash from Capital One for Business is a good example of a card that offers a single cash rewards rate for all spending (in this case, a generous 2%). The card’s simple rewards structure is excellent if you want an easy way to earn cash back.
If you prefer luxury perks, a card like the Amex Business Platinum Card features the array of VIP-type perks you can expect from a premium card, but it comes with a hefty annual fee and higher spending requirements for welcome bonuses.
Your Bookkeeping Needs
Business credit cards can help keep business and personal spending separate, and make reconciliation and tracking easier. When selecting a business credit card, explore the tools that the issuer offers to see if and how they integrate well with your accounting platform.
The Bank of America Business Advantage Cash Rewards card is one of several cards that allows you to download your transactions to QuickBooks.
How to Apply for a Business Credit Card
Applying for a business card is a fairly simple process. Assuming you are authorized to make financial decisions on your company’s behalf, you can start the application process online or with a paper application.
Be prepared to share both your individual consumer information as well as specifics about the business including, but not limited to:
- Business industry
- Company structure
- Annual business revenue
- Number of employees
- Length of time in business
In some cases, the issuer may request additional financial statements and documentation.
- Business credit cards are worth considering for keeping your personal and business expenses separate, and their rewards, and accounting tools.
- Be sure you understand how they are different from consumer cards, and keep personal expenses separate.
- When used wisely, business credit cards generate rate rewards that you can invest in your company and provide a line-of-credit to fund expenses.