If you start a business, you first need to establish yourself as an organization. Without doing so, you can’t get a business license or set up a bank account. Once you have those covered, it’s time to consider getting your business credit card. 

Sometimes called a corporate credit card or small business credit card, this is something many small businesses overlook and are surprised to find when they apply for one that it can be quite difficult. 

If this happens to you, there are some things you can do to help you understand how to apply for a business credit card.

What is A Business Credit Card?

A business credit card is one that is made just for business owners and has benefits that are good for businesses. Most business cards have higher credit limits, more ways to earn rewards and tools to help you keep track of your spending and employee cards.

Even if your business has cyclical patterns, you will still have to pay your fixed business expenses, like rent and utilities. You could even out these changes in cash flow by using your business credit card.

That’s one of the perks of getting one.

How Does It Work?

Before you apply for one, you should know how they work.

Cards can be used to pay personal expenses

As the business owner, you are usually responsible for all charges on your business card account, including purchases made by your employees.

It has less protection than personal credit cards 

The CARD Act doesn’t cover business credit cards, so paying on time and in full every time is even more critical. If you miss a payment, your APR could go up without warning, or your grace period could be cut short.

It can be used as a charge card or a credit card 

Like personal cards, there are two kinds of business cards. 

With a charge card, there is no set limit on how much you can spend, but that doesn’t mean you can spend as much as you want, so you have to pay the bill in full monthly.

A business credit card, on the other hand, has a set limit on how much you can spend, but you can maintain a balance and pay interest on it. These cards also have intro periods with 0% APR, which you can’t get with a business charge card.

You can keep track of your employees’ expenses 

One of the best things about them is that you can give cards to employees and keep track of what they spend. Many business cards come with free cards for employees that help keep track of expenses and eliminate the need to reimburse employees for money they spend on their cards.

How to Choose the Ideal Business Credit Card That Suits You

After weighing the pros and cons, do you still want a business credit card? Good! When comparing credit cards for business, the next step is to think about the following:

1. Find Out What You Spend the Most Money On

 To get the best out of your business credit card, figure out what you spend the most money on.

For example, some offer higher rates for earning rewards or cash back on business expenses like groceries, gas, travel, utility bills, or eating out.

2. Look For Things That are Good for Business.

Not interested in getting rewards from your credit card? Pay attention to cards that have features that will help you better manage your finances.

A corporate credit card is a great choice if you have a lot of suppliers or employees who pay for things on your behalf.

3. Apply for a Credit Card With a High Credit Limit.

If you plan to pay for most of your business costs with a credit card, you’ll need a higher credit card limit. Even for small businesses, costs can get very high, especially at the start. With a high credit limit, you won’t be able to max out your credit so quickly, which could hurt your credit score.

You can’t be sure how much your bank is ready to lend you until you receive your new card because your credit limit will depend on your salary and other criteria. A premium credit card, and a bigger credit limit than standard cards, is your best option.

How to apply for a business credit card in 6 ways

You can apply for a business credit card at any time if you think you meet the requirements and want one to help your business.

1. Look into your choices.

Look at your business expenses to see if you’re spending money in any areas that could earn you rewards.

Some are great for small businesses that need cheap capital and have long introductory periods where they don’t charge anything. Others are great for bigger companies with sales reps who travel a lot because they let them earn reward miles.

2. Choose the right card for you.

Once you’ve found cards with the right mix of fees, interest rates, and rewards, you’ll need to choose which is best for you. Make sure you read the information carefully and understand all of your rights and responsibilities as a cardholder.

3. Check your credit rating.

If your company has been in operation for three years or more, you could be able to obtain a business credit card using your company’s credit rating. However, it’s most probable that you’ll apply with your own Social Security number, and the lender will run a credit report.

4. Get the facts.

When you feel good about your credit, you’re almost ready to apply. The last thing to do is gather all the information you’ll need for your application:

• The TIN of your business
• Social Security Number
• Social Security numbers for any business partners who own more than 20% of your company
• Your incorporation papers will show how long your business has been open.
• Recent financial statements
• A list of workers who need cards

5. Apply.

Now that you’ve found the card you want, made sure your credit is good and gathered all the information you’ll need to fill out an application, it’s time to do so.

Depending on the information you put in, the card issuer may have more questions or need other information from you. This may be done in a later step of your online application, or you may need to talk to someone by phone or email to finish it.

6. Wait for the card approval.

After you send in your card application, all you can do is wait to find out if you’re approved. Approval decisions can be made quickly or take a day or two if more research needs to be done. If you’re accepted, you’ll get your card(s) in the mail, which you can then use.

Final Thoughts

When running a small business, you should use any help you can get. That means knowing how to apply for a business credit card. 

Treat it like a personal credit card. As long as you use it responsibly, it can help your business grow.