Get a Business Credit Card: How to Apply

Get a Business Credit Card: How to Apply

Consider applying for a business credit card if you own a small company. Your company’s demands may be funded thanks to your improved buying power, which also helps you keep business and personal costs separate and makes filing your tax returns much simpler. It’s essential to understand the requirements for obtaining a company credit card in order to profit from its financial and practical advantages.

Main Points

You may fund your company’s demands and keep your professional and personal costs separate with the use of a business credit card.
Most lenders of business credit cards demand a personal guarantee, which implies that in the event that the firm is unable to pay the debt, you are responsible for it.
Although there are many similarities between business and personal credit cards, most TILA requirements do not apply to business accounts.
To make sure you acquire a business credit card that matches your requirements, thoroughly examine each option.
If your credit is less-than-perfect, a secured business credit card can be a smart choice.

Conditions to Apply for a Business Credit Card

The criteria for company revenue, credit score, and other considerations will vary depending on the lender. However, before approving a loan, a credit card provider will often go through both your personal and corporate credit reports—especially if your company doesn’t yet have a credit history of its own. The majority of business credit card providers will additionally want a personal guarantee, which makes you personally responsible for any outstanding debt or amount in the event that the firm is unable to make payments.

How to Use Business Credit Cards

Personal and business credit cards have a few things in common. If accepted, you’ll have a revolving line of credit that you may utilize to finance any unexpected company expenses. In the same way as you would with your own cards, you must:

By paying bills on time, you may appropriately manage your company account.
Pay interest on any debt that you carry over from month to month (barring any promotional periods during which interest is waived).

The Truth in Lending Act (TILA), which very seldom applies to corporate accounts, is a significant contrast between business and personal credit cards. To make sure that lenders inform customers about the conditions and cost of the credit being offered, the TILA was enacted. Fortunately, two significant legal protections apply to company owners. You cannot get a card unless you requested one, and in the event that your card is lost or stolen, you won’t be held liable for any fraudulent purchases that total more than $50.

Get a Business Credit Card: How to Apply

The methods listed below might help you secure a company credit card even if they may seem difficult.

Examine Your Credit

Prior to applying for a loan, it’s important to verify your credit report for mistakes. These might include inaccurate information about your identity, account status, amount, or credit limit.

Visit to get a free copy of your credit report from each of the three main U.S. credit agencies.

If you find an inaccuracy, send a letter contesting the information to the reporting lender and credit bureau. Include any documentation that backs up your allegation. Your complaint must be looked into, and if the error is not corrected, you have the right to file a complaint with the Consumer Financial Protection Bureau.

Options Research for Cards

Your next step should be to investigate and contrast the many available business credit cards since there are many of them on the market. Some of the factors to take into account are as follows:

  • (Low-interest, secured, unsecured, etc.) kind of card
  • APR, or annual percentage rate
  • APR rate for new customers
  • introductory interest rate
  • Charges (annual, late, international, cash advance, etc.)
  • Rewards (miles, points, cash back, hotel stays, etc.)
  • eligibility criteria (credit rating, revenue from a firm, etc.)

Credit reporting (ideally, the card should provide credit information to corporate credit bureaus so you may establish credit distinct from your personal file).

Consider your company’s demands and objectives when deciding which card to apply for. A credit card with no annual fee and a low interest rate can be your best option if you’re attempting to save every cent and think you might need to carry a load. However, if you often travel for business purposes, a card that rewards travel or hotel stays may be the best option for you.

Request a Card

It’s time to apply after you’ve chosen the best business credit card for your organization. Each issuer’s application form will be unique, and the information needed to make a judgment will vary. Nevertheless, you should be ready to offer a variety of personal and company details, such as your yearly personal income, credit score, kind of business, length of time in operation, annual revenue, federal tax ID, and more.

Options for People with Limited or Poor Credit

You could still be able to get a company credit card even if your credit history is poor or nonexistent. To boost your chances of being accepted, you may co-sign the application with a business partner who has excellent credit, for instance. If that’s not a possibility, take into account the alternatives below.

Card Credit Scurries

Because you must provide a security deposit to the bank in order to create an account (thus the name), a secured credit card is often simpler to qualify for. Your available credit line is equal to the amount of your security deposit. You may use the card to make purchases when it has been accepted.

Making timely payments builds your credit profile and shows that you are financially responsible. If you properly manage the account for a sufficient amount of time, the bank may move you to an unsecured card that isn’t required to be backed by your own cash.

Supplier Credit

Applying for vendor credit is another option for enhancing your credit standing (and cash flow). As part of this agreement, your vendor provides you with products and services today with the assumption that you will pay for them within a certain net period. You won’t be assessed interest as long as you pay inside that window. You effectively get a brief loan with no interest, then.

Prior to accepting your application, your vendor will presumably check your credit. However, if you pay your bills on time (or early) for a significant amount of time before to applying, you may raise your chances of receiving a “yes”. Additionally, you might begin with a very short net term, such as 10 or 20 days, to demonstrate your capability. Next time you apply for a company credit card, you could have a better chance of being accepted if you have a list of current vendor credit agreements.

Answers to Frequently Asked Questions

Without a personal guarantee, is it possible to get a company credit card?

It’s possible to get a corporate credit card without providing a personal guarantee, although this is unusual. Most credit card companies demand one. In this manner, the lender will be able to pursue you personally for payment if your company is unable to pay the loan for whatever reason. There are a few company credit card possibilities, nevertheless, that do not need this assurance.

What business credit card is the simplest to get approved for?

A secured credit card is the one that is the simplest for businesses to get approved for. Because a security deposit must be made to guarantee the account, secured credit cards pose little risk to the lender. Additionally, the credit card company has the right to use your security deposit as payment if you fail.

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