How To Apply For Business Credit – Getting approved for a small business credit card is not as difficult as many think. As long as you have a good credit score and business form, then you may be eligible to apply for some of the best business credit cards. In this article I will discuss some tips and tricks on how to get a business credit card and then give you some of my top recommendations.
One of the main reasons people look for business credit cards is to separate their business expenses from their personal expenses. It is often needed for accounting and tax purposes and is also good for general record keeping.
How To Apply For Business Credit
But business credit cards also come with special bonus categories that are often ideally suited for small businesses and startups. These are types of bonuses such as advertising, travel, transportation, gas and telecommunications. By choosing the right business credit card, you may be able to earn cash back or earn valuable rewards that you can use to travel more often (or more comfortably as in Qatar First Class).
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Getting a business credit card is a lot easier than you think. The application process generally works in much the same way as applying for a personal credit card. The only difference is that you have to provide additional details about your business.
What additional details you need depends on the bank you are applying for. Some banks only ask for a few additional details, but others will ask you in more detail about the nature of your business.
Again, different banks ask different questions, so I suggest you gather all the relevant details about your business before applying. Or you can simply search the online application to see which fields you will need to fill out.
Different banks vary in how they approve applicants for business credit cards, but there are some things you can do to improve your chances of approval.
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Most people don’t know, but there are separate credit scores for your business and your personal profile. However, it is your personal credit score that will usually determine whether or not you are approved for a business card (especially your first business card). Remember, you are personally responsible for the debt incurred on these business credit cards, so banks want to make sure you are financially responsible.
A good credit score for business credit cards is usually around 720+, but you can still be approved for business cards with a low score (even in the 600s). In my personal experience, Amex business credit cards can be anything but. Very easy to get approved, but your situation may vary.
If you’re not too sure about your credit score, there are a few things you can do to improve your chances of approval.
You can open a business bank account with your potential credit card issuer. This shows them that you are serious about your business and can lend credibility to your revenue numbers.
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You may need documentation for an LLC, d/b/a, etc. to open a business bank account. D/b/a filings are usually easy and inexpensive, and you can check with your local state or county court for requirements.
You simply open a personal credit card with that bank to establish a relationship with them. For example, if you want the Chase Ink Business Preferred, you can apply for the Chase Sapphire Preferred or the Chase Freedom and then wait a few months for the ink to go through.
This is very important, especially if you are planning to apply for a Chase business card like Inc. If you’re not immediately approved for a business credit card, there’s a good chance you’ll need to do a “reconsideration.”
This is a call where you will be asked very specific questions about your business, such as revenue, size, profitability, etc. That’s why it’s a good idea to create a cheat sheet with all the important details. of your business so that the information in your application is accurate.
Working Capital & Business Credit
It should go without saying, but you’ll need a business to apply for a business credit card. You don’t always need a traditional LLC, corporation, partnership, etc. If you don’t currently have a money-making business (or any business at all), there is still hope for you.
If you have a new business just starting out or a business that has not brought in any income, you may qualify for a business credit card. Some people get approved for business credit cards with zero income, but sometimes that lack of income can result in your being denied.
If you have the right way to project your income in the coming year, you can always appreciate the goodwill of your income. Keep in mind that sometimes these applications may end up in a financial review, so you always have a reasonable basis for your projected income.
And if it’s your first business card, some people recommend combining your personal income with your business income because your personal credit report will be based solely on that approval.
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If you don’t have a business, then you should start one. The good news is that starting this business is incredibly easy. If you do any kind of selling or reselling, whether on eBay, Amazon, Craig’s List, etc., it certainly qualifies as a business.
Or maybe you do some sort of consulting or tutorial on the side? It can also work as a business. Again, you never want to lie on a credit card application. Especially when it only takes a small amount to start moving in one direction.
When you start something like your reseller business, your business name will usually be something like “First Name Last Name, Consultant” or “First Name Last Name, Contract.”
If you are building your small business by reselling products or consulting, it is possible to do business without an Employer Identification Number (“EIN”).
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In this case, you select “Sole Proprietorship” as your company structure on your credit card application. If you see only one field on the application for an EIN or Tax ID number, you should only be able to enter your Social Security number in that field.
If you don’t want to use your Social Security number, you can easily create an EIN in minutes. Just visit the official IRS website and you will be able to create an EIN in no time.
Many business credit cards such as Chase, Amex and Citi do not report your personal credit report. This means they won’t show up as new accounts that will help damage your credit report.
Also, any balances you carry on these non-reporting credit cards will not appear on your personal credit report. That’s why some business credit cards like American Express Blue Business Plus are ideal for balance transfers. You can basically reduce your utilization immediately and improve your credit score.
Best Secured Business Credit Cards
There are a number of great business credit cards available today. But below are some of my favorites. I like them mainly because of their great bonus categories that are perfect for many small businesses, especially if you spend money on advertising and travel. They also get some solid rewards.
Ink Preferred comes with an amazing sign-up bonus of 80,000 Ultimate Rewards after spending $5,000 in the first 3 months! At a cost of 2 cents per point, that’s $1,600 in rewards. Even if you only got them for a statement loan, that’s still an $800 rebate!
The American Express Blue Business Plus Credit Card is one of my top business credit cards because it earns 2x on all purchases up to $50,000 per year. Since I think membership rewards are close to 2 cents per point, that’s 3.5-4% back on all purchases (up to $50,000 per year) in membership rewards!
And this card comes with a 0% APR introductory period. So if you need to make a large purchase, you can make that purchase and pay it off over time without paying interest and without having to report it on your personal credit report. This is a great way to handle large purchases if you don’t want to affect your personal credit score.
Business Credit Cards — Cy Fair Fcu
The Business Gold Rewards Card from American Express OPEN is great because it lets you choose a category to earn 3X points. You can choose from the following categories to win 3X:
This card also comes with a great welcome offer of 50,000 Membership Rewards points after you spend $5,000 in the first 3 months. This was my first business credit card and I remember earning several membership rewards from this card over the course of a year with great bonus spending categories.
The Capital One Spark Cash Visa is a very simple cash back credit card that earns 2% back on all purchases. This little one
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