Business Type And Structure

Be sure to review the level of protection and services a card offers before applying. Personal Legal Liability—Many small business credit cards require a personal-liability agreement to repay debt. This means that any late or missed payment could result in a negative personal credit report and the inability to personally borrow money. That interest can add up quickly if card activity is not repaid on time and in full each month. You could also set spending limits for employee cardholders, based on the amount of credit that is available to spend on the card. And if you’re earning rewards directly with a credit card program, you’ll also have your points combined.

Business Credit Cards With Big Sign

It’s not necessarily a deal-breaker if your business or side hustle hasn’t made any money yet. The issuer looks at your personal finances and your business’s information to determine if you’re eligible. If you’re a independent freelancer or have other small jobs (in other words, if you’re a sole proprietor), then no, you do not usually QuickBooks need to have a business checking account. It’ll cause more headache when you need to separate out your business expenses when filing taxes. For example, maybe the reward structure will really help you, and that you want to keep expenses separate. Credit card companies also want to know what kind of business you’re running.

They may offer extra rewards and bonus points for business-related purchases, which can be anything from printing services to office supplies to advertising fees. Some also offer bonuses on dining and travel, as those are common business purchases. Most banks will look at more than just your business type when considering whether assets = liabilities + equity or not to approve you as a cardholder. Your existing credit score is a big factor in whether a credit card company will accept your application. If you are applying as a startup business, you will need to provide your personal credit score as proof that you and your business are good candidates for a business credit card.

  • Less Protection—Small business credit cards often do not carry the same protection as consumer credit cards.
  • For example, many cards will not provide the same level of assured services when disputing billing errors or needing to make merchandise returns.
  • This means that any late or missed payment could result in a negative personal credit report and the inability to personally borrow money.
  • So don’t try to estimate future earnings or inflate your cash flow—that’s illegal, and it’ll get you automatically denied.

There are plenty of incentives for choosing a business credit card over a personal credit card. You can keep your personal and business expenses separate, and you may be able to get higher rewards for your business-related charges. However, once you get it, use the card responsibly business credit card and abide by the cardholder agreement. Ink Business Preferred lets you earn 100,000 bonus points after you spend $15,000 on purchases in the first 3 months from account opening. 100,000 points is worth $1,250 toward travel when you redeem via Chase Ultimate Rewards.

Businesses with a history of missed payments or late payments will have limited options when applying for a business credit card. Easy business credit cards for bad-credit applicants include the Capital One Spark® Classic for Business card, which gives you 1% cash back rewards on all purchases but includes high interest rates. Or you can always apply for a secured credit card or a charge card .

how to get a business credit card

Earn 1 point per $1 on all other purchases — with no limit to the amount you can earn. Owners with low credit can still get a business credit card but options are limited. Companies like Capital One offer cards to people with lower credit scores. These cards have lower credit requirements but require a deposit in case you default on payments. A prepaid card is a viable option and doesn’t require a credit score check, but it does not help you build credit. If you’re working on building your business credit, know that not all business credit cards report to business credit-reporting agencies. If you get a card from an issuer that doesn’t, you won’t build your business credit.

Unlike many business credit cards, it doesn’t require a personal guarantee. That means that as a founder, you aren’t legally obligated to take money out of your personal bank accounts to pay for your startup’s credit card bills. And it can be tough to find a business credit card with no personal guarantee. In many ways, business credit cards can provide you with more advantages over personal credit cards. Generally, it is easy to qualify for secured business credit cards with no credit.

For secured credit cards, there are no time requirements to meet. Any applicant that does not meet the membership requirement must speak with a banker at a physical branch. Applicants also need to be U.S. citizens or permanent residents and must provide proof of their citizenship status. Another point to look at is the similarities your business credit card will have to a personal card. Some business credit cards match rewards and fees with their personal version. For this reason, it’s important to find a business credit card that adds additional benefits rather than duplicating the ones you already have with your personal card. In short, you can apply for a business card as long as you are earning profit .

Ways To Get Your First Credit Card

While business loan requirements include a minimum revenue amount, business credit cards don’t. In other words, you’re eligible for a business card even if your company hasn’t raked in any cash yet. So don’t try to estimate future earnings or inflate your cash flow—that’s illegal, and it’ll get you automatically denied. Less Protection—Small business credit cards often do not carry the same protection as consumer credit cards. For example, many cards will not provide the same level of assured services when disputing billing errors or needing to make merchandise returns.

You can link all of your Membership Rewards earning cards into 1 Membership Rewards account, so all of your points are always in one place, whether for business or pleasure. Another major perk is that small business credit cards do not appear on your personal credit report. Even though banks evaluate your personal credit when you apply for a small business credit card, it will not impact your credit score in the long term. You’ll also have to determine whether you’re willing to pay an annual fee for extra rewards.

We want to hear from you and encourage a lively discussion among our users. Please help us keep our site clean and safe by following our posting guidelines, and avoid disclosing personal or sensitive information such as bank account or phone numbers. Any comments posted under NerdWallet’s official account are not reviewed or endorsed by representatives of financial institutions affiliated with the reviewed products, unless explicitly stated otherwise. annual fee and ongoing rewards make it an easy card to keep carrying once the introductory interest rate period ends.

how to get a business credit card

This will help inform your inquiries when it’s time to speak with a representative, which brings us to our next piece of advice. Determine whether or not you would like to open a merchant account. If you have a corporation or a registered LLC, you can apply using that information. You can also apply as a sole proprietor using your social security number, which is what most freelancers and people with side hustles do. Explore our picks of the best brokerage accounts for beginners for November 2020. Check out our top picks of the best online savings accounts for November 2020. Issued by the IRS, an EIN is the business equivalent of a Social Security number.

Sole proprietors can include such people as freelancers, Etsy shop owners, rideshare drivers or “taskers” who perform services via TaskRabbit. This is «what you do» in your business, such as transportation, construction or general services, for example. If someone else has a more than one-quarter share in your business, you’ll want to have their name, date of birth, Social Security number and address handy in case the issuer requests it. If you don’t have a separate tax ID for your business (and many entrepreneurs don’t), you can use your Social Security number. The Chase travel portal lets you book flights and hotels with your points. Find out how it works, how pricing compares, and when you should use it.

The definitive guide to debunking credit score mythsThere’s an awful lot of misinformation about credit scores. We’ve decided to set things straight with the help of a number of experts who have helped compile this list of credit score myths – and debunked each one. Elaine Pofeldtwrites the Your Business Credit column for, answering a question every week about small business and credit. Pofeldt is a journalist who specializes in entrepreneurship and careers, contributing to publications such as CNBC, Forbes, Money, and many others. She is the author of “The Million-Dollar, One-Person Business,” a look at how solo entrepreneurs are scaling to seven-figure revenue without hiring employees. She is a former senior editor at Fortune Small Business magazine and co-founder of , a website for independent professionals.

There are fairly tight rules for which businesses can qualify for S-corp status. partnership is a formal business relationship between two or more people, who share in the company’s profits and are responsible to some degree for its debts. Provide the address and phone number for your business, if it’s separate from your own. If you don’t have a business location or a separate phone line for business, your home address and personal phone number will do.

Carefully review the terms of any related rewards program so you can reap the maximum benefits of your business card. Most credit card companies will accept an application business credit card online, where you’ll be provided with a decision. If you don’t receive an immediate decision, your application will be reviewed and a decision will be sent to you.

If you enjoy using your personal credit card to earn points and miles with your favorite airline or hotel loyalty program, you can add to your rewards with a small business credit card. When you apply for either a personal or a business credit card that’s co-branded with an airline or hotel, you will be asked for your loyalty program number. Since you’ll use the same number for the rewards you earn from both your business and personal credit cards, all of your points and miles will be pooled. we’ll show you exactly what those options are and how your credit score affects access to business credit cards. Some of these easy business credit cards even come with decent rewards programs, so you can earn some extra cash while making essential purchases for your company. Many small business credit cards offer excellent introductory APR rates for both purchases and balance transfers. Introductory rates offer a great opportunity to get access to additional funds for your small business while earning travel rewards.

Any personal views and opinions expressed are author’s alone, and do not necessarily reflect the viewpoint of Nav. Editorial content is not those of the companies mentioned, and has not been reviewed, ledger account approved or otherwise endorsed by any of these entities. Marco Carbajo wrote about credit for The Balance Small Business. He is a credit specialist, and owner of Business Credit Insiders Circle.

Business Credit Cards