Business credit cards can be an effective tool for businesses to finance purchases, earn rewards, build credit, and manage their cash flow. As with a personal credit card, approval can be tied to your personal credit score, and the cards with the strongest features and benefits are generally intended for those with the best credit. Learn more about how to use a , who is eligible, and what the steps are to apply.
A business credit card is like a credit card, it can be used to make purchases, pay for services, and in some cases fund a balance over time. However, business credit cards often offer perks like rewards, benefits, and software integration features that suit business owners. Plus, keeping your business expenses on a business card and separate from your personal card can simplify things at tax time.
Most business credit cards do not report your card balance or activity on your personal credit file. However, banks often require a personal guarantee to protect them from your company defaulting on payments. For this reason, if you miss a payment or default on the account, your staff may be negatively affected.
Business credit cards are available for businesses of any size, from solo ventures to startups and companies with dozens of employees. In fact, you may be eligible for a business credit card if you own rental properties, sell on Etsy, drive for Uber, or earn money outside of your regular W-2 job with a side job.
Having an Employer Identification Number (EIN) is also not a requirement. Many entrepreneurs run their businesses using their Social Security Number (SSN). You can apply for a business credit card whether you are using an EIN or SSN to file income taxes.
Aspiring business owners can also get a business credit card before making their first sale. Using a business card for your startup costs can make it easier from an accounting standpoint to ensure you claim all eligible expenses on your taxes.
There are a wide range of business credit card options to choose from, depending on your budget and spending patterns. and what rewards and benefits are most important to you. These are some of the best business credit cards for a variety of needs.
There is no annual fee and you get unlimited 1.5% cash back on every purchase. New cardholders also have access to an introductory 0% APR offer on purchases for 12 months. After that, a variable APR of 16.99% to 24.99% applies. While some business owners prefer to earn travel rewards, cash back allows you to choose how to spend your rewards without limitations. Rewards can be redeemed for cash back as a statement credit, a deposit to your qualifying checking or savings account, or used to purchase gift cards and travel through Chase. You can also transfer your rewards to one of Chase’s 12+ travel loyalty partners, including JetBlue, Southwest, and Hyatt. This could lead to higher value for your rewards.
Capital One Spark Cash Plus is a credit card that has no current spending limit. Instead, your purchasing power is adjusted to your needs based on your spending behavior and past payment history, so you have the flexibility to make a larger purchase than usual. The card has a $150 annual fee, but that fee is refunded if you spend at least $150,000 in a calendar year. Adding to the card carries no additional charge.
Best credit card with flexible points: Ink Business Preferred® Credit Card
Maximize rewards for monthly business expenses with . The card has a $95 annual fee, but earns triple points on the first $150,000 in combined spending each year on shipping, online advertising, travel, and Internet, phone and cable services, all typical areas of business spending. All other expenses earn 1x. The card also includes complimentary employee cards, and includes groceries, cell phone and . Points earned with this card can be redeemed for cash back, gift cards, or travel booked through Chase Travel.
Although it carries a $395 annual fee, it offers premium travel benefits that can offset that cost. As a cardholder, you’ll receive free access to over 1,800 airport lounges, including exclusive Capital One lounges and Priority Pass lounges. It also includes a $300 annual Capital One travel booking credit, TSA PreCheck or Global Entry application fee reimbursement once every four years, and Premier Collection hotel benefits such as free breakfast for two.
The card earns unlimited 10x on hotels and rental cards booked through Capital One, 5x on flights booked through Capital One, and 2x miles on all other purchases. Miles earned with this card are best redeemed for travel booked through Capital One or transferred to more than a dozen Capital One airline and hotel loyalty transfer partners.
Business owners who frequently take to the skies for work will find it can be a great addition to their wallet. The card offers an introductory $0 annual fee for the first year, then $150 annually, and offers solid airline benefits. Cardholders get the first checked bag free for themselves and up to eight travel companions, priority boarding and a 20% discount on onboard purchases. You’ll also get a 15% discount when you book award flights on Delta, and if you spend at least $10,000 per year, you’ll receive a $200 Delta flight credit.
The card earns elevated rewards in two business-friendly categories: 2x miles on Delta purchases and eligible U.S. purchases at shipping providers and select media advertising purchases, and 1x on all other spending.
Best Credit Card for Hospitality Businesses: IHG One Rewards Premier Business Credit Card
Business owners can convert their monthly expenses into hotel points to earn free hotel nights in the future with . The $99 annual fee card earns up to 26 points on IHG hotels and 5x points on travel, dining, gas and select business purchases, and 3x on all other spending. In addition to the sky-high earn rate on on-brand stays, you can accelerate even more complimentary stays with one free night each year on your card anniversary worth up to 40,000 points and when you redeem three IHG nights, get a fourth night free promotion. Those benefits alone may outweigh the card’s relatively modest annual fee. When you spend $20,000 within a calendar year, you’ll also earn a $100 statement credit and 10,000 bonus points.
What information do you need to include in your application?
When applying for a business credit card, you will generally need two sets of information. The first is your personal information since most banks require your personal guarantee. The information required may vary depending on the bank you apply to, but generally includes:
-
full name
-
Birthdate
-
Social Security Number (SSN)
-
Mother’s maiden name
-
home address
-
Phone number and email address
-
Total annual gross personal income (personally)
-
Your role in the company
You should also provide information about your business, even if you are just starting out. Be honest and accurate. Banks approve applications for new business owners.
-
business name
-
Legal business structure (LLC, sole proprietorship, etc.)
-
Trade name or “doing business as” (DBA) (if applicable)
-
Type of business (also known as business classification code or SIC)
-
Number of employees
-
Business Tax Identification (Employer Identification Number (EIN), ITIN, or SSN)
-
Physical and postal address
-
Business establishment date
-
Annual business income
-
Estimated monthly expense
Applying for a business credit card is a wise move for your business. It’s never a good idea. Credit cards can give you quick financing for your business and an opportunity to earn rewards on your monthly spending. Using a credit card allows businesses to easily track company expenses and assign them to employees, internal costs, and customer projects. Finding the best business credit card for your needs depends on how much you spend, what categories you use the most, and what types of rewards you prefer. When selecting a card, pay attention to annual fees, interest rates, foreign transaction fees, and other potential costs to keep your expenses low.
This article was edited by Robin Saks Frankel
Editorial Disclosure: The information contained in this article has not been reviewed or approved by any advertiser. All opinions are solely those of Yahoo Finance and are not those of any other entity. Details about financial products, including card rates and fees, are accurate as of the date of publication. All products or services are presented without warranty. Check the bank’s website for the most up-to-date information. This site does not include all offers currently available. Credit score alone does not guarantee or imply approval for any financial product.