A business credit card is a line of credit issued to a small business or sole proprietorship. Business credit cards allow business owners to separate business and private expenses. This makes record keeping easier – especially during tax season.
How do business credit cards work?
Business credit cards work similarly to non-public credit cards, except the cardboard could have a special rewards structure or offer different security measures.
Pro tip
What varieties of business credit cards are there?
The two commonest varieties of business credit cards are small business cards or corporate cards. The cards on this list are small business cards that might be applied for without making any unusual financial arrangements.
Credit cards for small businesses
Most cards sold as business credit cards are intended for small businesses. These cards help business owners manage their funds while earning rewards and advantages designed for small businesses – introductory APR periods, free worker cards, zero liability protection, and buy or travel protection. Many of those cards – including the very best secured cards for businesses – are also designed to assist businesses construct credit or, like the very best credit cards for brand new businesses and startups, manage on a regular basis purchases in their early days.
Corporate credit cards
P-Cards, or purchasing cards, also often called business credit cards, are typically only offered to businesses which have significant annual expenses – resembling 1 / 4 of 1,000,000 dollars in annual expenses or more. These cards typically offer lots of the same features that small business credit cards offer, but on a much different scale and with completely different management. Corporate cards are sometimes managed by large programs designed for corporate expense tracking systems and could have various fee structures, rewards structures and perks built into them.
How many business credit cards should I even have?
How many business credit cards are best for you or your business is dependent upon you and your specific needs. Carrying multiple business cards can can help you earn more diverse rewards, maximize cash-back potential, provide a more comprehensive set of advantages, and more, however it’s value realizing ahead of time that managing multiple accounts means more time, more monitoring, and paying more bills.
Different varieties of cards offer different rewards, so if you desire to earn a couple of form of reward, it’s possible you’ll need a couple of form of card. Like consumer cards, some business cards offer airline-specific points, while others offer money back rewards. If you desire to earn each advantages with only one card, a card with flexible rewards and currency is a great compromise. For example, the Chase Ink Business Cash® credit card earns Chase Ultimate Rewards®. Not only can Chase Ultimate Rewards be redeemed for travel or money back, but they might be transferred to participating hotel and airline partners and transferred to non-public Chase accounts for more redeemable value with personal credit cards, including the Chase Sapphire Reserve® .
Benefits also influence the choice to hold multiple cards. If your money back card offers prolonged warranty advantages but doesn’t offer travel protection, it’s possible you’ll need a separate business card to make use of to book business trips. Benefits can often be neglected in favor of rewards, however the value of many advantages can easily outweigh the rewards with lots of the insurances and protections that the very best business cards offer.
Take the time to research and compare lots of the very best business credit cards to get probably the most out of your business spending:
Inquiries about your personal credit when applying for business credit cards can impact your credit rating and your perceived creditworthiness with a lender, so it is best to stagger your business credit card applications, even when the cards are for separate firms.
How to get a business credit card
When you are able to get a business credit card, you’ll have to assemble some information to use. Prepare with:
- Employee Identification Number (EIN) or Social Security Number (SSN)
- Basic business information, including your organization’s age, address and structure
- Annual business revenues
- Estimated business expenses
- Personal income information
You can apply online, by phone or in person at your local branch where possible.
How to get a business credit card and not using a personal guarantee
Establishing business credit might be difficult, and a few cards would require a private guarantee. This implies that a person (often someone applying for the cardboard on behalf of an organization) shall be answerable for any unpaid balances on the cardboard.
For individuals who don’t desire to be tied to a business account, there are cards available that do not require a private guarantee, resembling the Brex Card*.
How to get fast approval for a business credit card
Most cards that can help you apply online will let you realize straight away when you’re approved. Sometimes a bank might want additional information before granting you a line of credit, but when the reply is yes, you will often discover once you apply.
How to get a business credit card with bad personal credit
For small business cards, your personal credit rating is usually regarded as a part of the appliance process. If you have got bad credit, you’ll have to limit the cards you think about to those which are geared toward individuals with poor or limited credit history. Secured business cards are probably the most available option for individuals who can afford to pay the required card security deposit. Other options include improving your credit rating before applying or searching for cards that do not require a private guarantee.
Read more: Best business credit cards for bad credit
How to get a business credit card for a startup
Small businesses, even startups, can get a business credit card.
When applying for a business credit card, it is suitable to enter $0 in income, which is usually the case for a startup. When deciding whether to approve a business credit card, banks will take note of every other sources of income, in addition to the applicant’s personal creditworthiness and former relationship with them (for instance, a private checking account).
How to get approved for a business credit card
When applying for a business credit card, it’s possible you’ll be asked to:
- Your name, date of birth and address
- Your company name, date of firm and industry
- Your Social Security Number (SSN)
- Your company’s Employer Identification Number (EIN).
- Your personal income
- Your annual business revenue
Not all information could also be required. For example, an EIN is usually an optional provision. You might also be required to offer your percentage of ownership in the corporate.
If you’ve got been pre-approved for the cardboard, don’t waste much time before applying. Changes made to your credit report or credit rating between the time you’re initially approved and the time you apply for the cardboard may affect your possibilities of approval.
Credit : www.forbes.com
