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How to Apply for a Business Credit Card

Kristina Russo

By Kristina Russo | American Express® Freelance Contributor
5 Min Read | September 17, 2021

How to Apply for a Business Credit Card

It’s easy to understand why many business owners use business credit cards: The money-saving value of rewards, benefits like separation of business activity from personal spending, and access to expense management tools. But the variety of available business card programs – and the application process – can seem overwhelming, at least at first. To make the process easier, follow these three steps:

 

  1. Check your business and personal credit scores.
  2. Find the best card for your business.
  3. Submit an application.

1. Check Your Credit Score Before Applying for a Business Credit Card

 

Factors like getting approved for a business credit card and quantifying the credit limit are based on the company’s credit history and/or that of its owner. For example, the higher the credit score, the more likely a company will get approved on its own, and the higher its credit limit may be. Company credit ratings are provided by the major business credit reporting agencies, Dun & Bradstreet, Equifax, and Experian, and are based on a few years of payment history and public records. While businesses can usually check their credit scores for free at the credit bureaus, full credit reports may cost money. Therefore, it’s wise to plan for potential extra time and expenses before starting the application process.

 

In cases where a company hasn’t built its own credit score, the business owner can substitute their personal credit score. The card issuer will typically do a hard inquiry on the applicant’s personal credit history to determine creditworthiness. As a rule of thumb, a “good” personal credit score – about 650 or higher – is usually the minimum needed for an unsecured business credit card, although every issuer has its own criteria. Personal credit scores are available for free through annualcreditreport.com and many banks.

 

For more on different types of credit scores, read “The Difference Between Personal Credit and Business Credit.

2. Identify the Best Business Credit Card for Your Company

 

Once you have an idea of your credit score, it will make it easier to determine which credit card is the best fit for the company. Start narrowing options by identifying the programs with achievable qualification criteria, such as minimum credit scores, company legal structure, or access to personal guarantees. Next, filter the programs for features that are most important for the way the company does business – what’s valuable for one company may not be for others. Typical features to consider when choosing the best business credit card for your business include:

 

  • Interest Rates: A lower APR might be more of a priority for companies that anticipate carrying balances than for those that expect to pay monthly balances in full. Low or 0% introductory APR offers may be attractive for companies planning big-ticket purchases and for those needing to build out their credit profile, as long as they’re mindful of the introductory timeframe.
  • Rewards: Rewards can be a significant economic benefit if aligned with the business’ spending needs. Additionally, consider the terms and conditions for how rewards are earned: Are they tiered for certain categories or flat-rate? For example, a business with large travel expenses may earn more rewards with a card that offers bonus points on travel spending.
  • Financial Tools: Some credit card issuers offer expense management tools to their clients. These tools can reduce administrative burdens and streamline cash flow management by integrating with client accounting systems.
  • Perks: Some credit card issuers provide other assorted perks and benefits, such as advance access to entertainment events, retail partner discounts, and travel benefits like free checked bags or airport lounge access.
  • Fees: Check the cardmember agreement for details about fees, and do a cost/benefit analysis of annual fees as a tradeoff for other business credit card features. Be sure to include any extra annual fees for additional card members. It’s also worth considering late payment fees, as well as foreign transaction fees if international spending is a factor.

 

For more on different types of business credit cards, read “Different Types of Business Credit Cards.”

How to Apply for a Business Credit Card

3. Submit a Business Credit Card Application

 

Application requirements can differ by business credit card program but it’s a universal criterion that the application must be made by someone who is 18 years or older and authorized to make financial decisions for the company. In most cases, the application can be made over the phone or online.

 

Gathering all required information in advance can make filling out the application faster and easier. Though card issuers often follow up with individual questions and requirements, these are among the common application requirements:

 

  • Company’s legal business name.
  • Company contact information including email address, business address, and phone number.
  • The company name as it is to appear on the credit card. If desired, it usually can be different from the company's legal name.
  • The company’s industry, such as food service, construction, or business consulting.
  • Company structure, such as LLC, corporation, partnership, or sole proprietorship.
  • Number of years the company has been in business.
  • Number of employees.
  • Annual business revenue and income.
  • Anticipated monthly spend on the credit card.
  • Federal Tax ID, or Social Security number of all partners who own 20% of the company or more.
  • List of expected employee cardholders.
  • Personal income if relying on personal credit score.

 

Most online applications are evaluated quickly, and credit cards are mailed to those approved. Like personal credit cards, business credit cards need to be activated before use. And remember: Many business credit card programs require a personal guarantee from all owners with a 20% or more stake in the business. In other words, they require owners to take personal responsibility for the bill if the company cannot pay it.

What If Your Application Is Denied?

 

If an application for a business credit card is denied, it’s important to learn why. Sometimes the reason is administrative and can be easily fixed, such as a typo or an unrecognized address. Other times, it can be due to poor credit scores. When this occurs, it’s important to try to raise the business’ credit score prior to reapplying. For example, on-time bill payments can go a long way in improving a business – or personal – credit score. Another way for businesses to boost their credit score is to open trade credit lines with a few suppliers and request that they report good payment history to the credit agencies. It’s also a good idea to periodically monitor credit reports for errors.

 

Alternatively, a secured business credit card can be a way to access credit and build credit history. If appropriate, it may also help to consider applying for a credit card designed for startup businesses.

 

The Takeaway

Business credit cards can provide many benefits for most companies, regardless of their size, industry, and age. Understanding the three steps involved in applying for a business credit card – knowing your credit score, identifying the right card, and submitting an application – can help make the process easier and help yield the best economic match for your business.

Kristina Russo

Kristina Russo is a CPA and MBA with over 20 years of business experience in firms of all sizes and across several industries, including media and publishing, entertainment, retail, and manufacturing.

 

This content was written by a freelance author and commissioned and paid for by American Express. 

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