Apply for Business Credit Card

Thursday, June 7, 2012 at 7:47pm by Site Administrator

Things to Consider Before Applying for a Business Credit Card

The world of business credit cards is larger than you might imagine.

Did you know that one doesn’t have to be part of a structured business to be eligible for a business credit card?

Are you aware of the specifics that will determine if you qualify for a business credit card?

Did you know only half of small business card usage is actually in a business name?

Are you aware these cards can be crucial in sorting through expenditures?

There are a number of benefits to these cards. The best way to be take advantage of them is to know what to look for, where to start and which type of card suits your purposes.

Do You Qualify?

One doesn’t necessarily have to be employed or own a specific type of business to have a business credit card. These cards are used to differentiate expenses, especially to separate business from personal purchases. This can be extremely important if you’re self-employed or own a small business where a lot of your own money might be used. Business expenses need to be itemized and a business credit card can be the easiest way to ensure this happens.

A business is any entity that provides goods and services. Do not think that because you’re selling cupcakes out of your kitchen that you wouldn’t be considered eligible. The truth is that even the smallest and most unassuming venture can be categorized as a business. Are you planning to sell a cherished stamp or comic book collection? Do you regularly sponsor community events or yard sales and provide refreshments? Are you a teacher spending quite a bit of money on school supplies for your students? Any funds used to execute these projects could be viewed as a business expense.

Have a talk with an accountant or financial advisor. No one better can help you determine if what you’re spending your money on is something that constitutes a business expense.

Should You Apply?

There’s no greater way to jeopardize a business than intermingling personal and business financial resources. You’re putting your personal credit, personal assets and the credibility and creditworthiness of both yourself and the business at risk. A business credit card used for nothing more than business expenses virtually eliminates that risk. There will be records of business purchases and expenses, which is absolutely vital to running a successful company. Plus, as these cards come with detailed reports from their agencies, expenses could be broken down by category. Make it easy to plan a budget and identify tax deductions, saving a tremendous amount of time on bookkeeping.

Also, business credit cards are instrumental in keeping your company payment history separate from your personal credit. The last thing you want is business debt showing up on your personal credit report.

While close to 65% of small businesses use these cards, less than half of these cards are actually in a business name, according to the U.S. Small Business Administration. This is because you don’t necessarily need a structured business to get one. As stated earlier, buying supplies to sell a stamp collection or to sell cupcakes out of your kitchen could be considered a business as long as there’s a need to stringently maintain and separate those expenses.


Here are a few things to take into account before applying for a business credit card:

  • Check the fine print. The terms and conditions can vary greatly from card to card.
  • What type of card do you need? Prepaid, business debit, unsecured or secured corporate, credit, charge, merchant, or fleet card. Each has unique properties and limitations.
  • Assess your creditworthiness. Much like a personal card, agencies will take your credit history into account.
  • Look for sign-up bonuses. They don’t necessarily make for a better card, but legitimate incentives can help. These can include deferred fees the first year or points towards savings.
  • Build your company’s credit. These cards should only report to credit files affiliated with the business, not your personal records.
  • Be wary of teaser rates or other special offers. No interest promotions or being able to borrow money can come with strings.
  • Avoid personal guarantees. A solid credit issuer working with an established company will offer credit extension without personal guarantees.
  • Avoid applying for multiple cards. This is a red flag and will negatively impact ratings.


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