Looking for a way to better manage your business’ finances?
Consider a small business credit card, one of the most powerful tools for entrepreneurs and small business owners.
With high credit limits, 0% introductory APR, and amazing rewards, a small business credit card is built to help you achieve your most ambitious goals.
Ready to learn more?
Here’s everything you need to know about small business credit cards:
Small Business Credit Card Defined
Small business credit cards are similar to personal credit cards—with one major exception.They are considerably more powerful.
For example, while the average consumer credit limit is roughly $22,000, the average small business owner accesses over $56,000 in credit.
That’s a big difference, especially for entrepreneurs looking to launch (or grow) a business.
For example, Amaia wants to refurnish her local restaurant. In addition to updating the fixtures and furniture, she also wants to upgrade a few of her major appliances.
All in, the renovations will cost $13,000.
While that’s too expensive for her personal accounts, it’s well within the range of her business credit limit.
Benefits of a Small Business Card
As we’ve discussed, Amaia can upgrade her restaurant with a swipe of her business credit card.
But that’s only the first of many benefits she’ll enjoy.
For example, her small business credit card offers 0% introductory APR (or Annual Percentage Rate, the yearly interest rate if you carry a revolving balance).
That means Amaia can borrow money without incurring interest for several months after opening her account. This could save her hundreds (if not thousands) of dollars, so long as she consistently makes on-time payments.
Then, there are the perks—a lot of perks.
In addition to 0% intro APR, Amaia will be able to earn amazing rewards on her business purchases, like travel miles, gift cards, and cashback. She can then use those rewards to pay for flights, to book hotels, or to simply reinvest the money back into her company.
On top of the financial perks, small business credit cards make bookkeeping easier than ever.
How? By automatically separating your personal and business expenses.
In some cases, your small business credit card will even provide an itemized PDF report at the end of each calendar year—just in time for tax season.
This could save you countless hours of labor and help you stay focused on what matters most: serving your customers and growing your business.
A Few Words on “Business Credit”
As an entrepreneur, “business credit” is essential for the longevity of your company.
It empowers you to do things like launch new products, purchase machinery, manage payroll, invest in marketing, and streamline operations.
And yet, business credit is more than a financial tool.
It’s how lenders determine your company’s ability to repay financial obligations, as reflected by your business credit score.
Generally speaking, high credit scores increase access to better loan products (with more attractive rates)—while lower scores restrict your options (and raise your rates).
While business credit is a complex topic, these three principles will help guide your journey:
- Always pay your debts on time.
- Always pay your debts in full.
- Never borrow over 30% of your credit limit.
If you can consistently follow these tenets, your business credit will steadily improve.
P.S. To learn more about business credit, click here for our comprehensive guide.
Choosing the Right Small Business Credit Card
Which small business credit card is right for you? It depends on what you need.
Start by asking the right questions:
- How much are you looking to borrow? Some cards have set limits, while others do not.
- What interest rates are available to you? Keep an eye out for 0% introductory APR.
- What rewards interest you? Some cards prioritize travel miles, while others offer cash back.
- What “signing bonus” do you want? Some have gift cards, extra points, or statement credits.
- Is an annual fee a dealbreaker? Some cards have hefty fees, while others waive them.
Take your time, and carefully research all available options.
Remember: no “perfect” card exists—only the card that’s right for you and your business.
While it’s important to enjoy great rewards, it’s most important that you make sure you choose a card that’s tailored to your long-term financial goals.
P.S. Click here to view the best available small business credit cards, according to Forbes.
Business Credit Card: FAQ
The financial world can be overwhelming—especially when it comes to entrepreneurship.
Before we get into the application process, let’s answer a few common questions about business credit cards:
1. Who can apply for a business credit card?
Anyone who operates a business can obtain a business credit card.
That’s true whether you are a sole proprietor, a partnership, a corporation, or an LLC.
2. I’m a freelancer. Can I still apply?
Absolutely! Freelancers—or independent contractors—are considered a self-employed business owner.
As such, they’re entitled to apply for a business credit card.
Freelancers can be anyone from a real estate agent to a journalist, a web developer, a ride-share driver, or even a dog-walker.
3. Are business credit cards exclusively for large companies?
Not at all! Business credit cards are available to companies of all sizes.
4. I don’t have any employees. Can I still apply?
Yes! You don’t need to have any employees to qualify for a business credit card.
However, if you do have employees, you will be able to give them corporate cards under your account (and set credit limits).
5. Are my personal credit score and business credit score the same thing?
No, your personal and business credit profiles are totally distinct.
For example, they each have unique credit scores, credit reports, and credit bureaus.
However, there are some cases where your personal credit could affect your access to business credit products.
For example, if you’re a sole proprietor applying for a small business credit card, it’s quite possible that lenders will review your personal credit to see how well you manage debt.
That’s why it’s so important to carefully manage your personal finances.
How to Apply for a Small Business Credit Card
While it takes time to find the right credit card for your business, the application process is quite simple.
Though each lender will have their own requirements, here is a general list of what you’ll need to apply for a business credit card:
- Business Name and Contact Information, including the address and phone number used to register your company. If you operate a home-based business, feel free to use your home residence address.
- Time in Business, which states when your business was officially established.
- Federal Tax ID, which may include your employer identification number (EIN), your individual tax identification number (ITIN), or your Social Security Number (SSN).
- Business structure, which states whether your company is a nonprofit, a corporation, an LLC, a partnership, or a sole proprietorship.
- Number of employees, which lists everyone on company payroll (except yourself).
- Business Revenue (and Anticipated Expenses), which states your annual business revenue and your best estimate of anticipated monthly charges on your business credit card.
Some of your personal financial information may also be requested in the application process.
As we discussed above, some lenders will want to review your personal credit—especially if you’re a sole proprietor.
To that end, be prepared to provide information including:
- Full Legal Name.
- Date of Birth.
- Social Security (SSN) or Individual Taxpayer Identification Number (ITIN).
- Home Address.
- Contact Information.
- Annual Income (all reported income, not just from your business).
As always, if you have any questions about your finances—or the particular products you’re applying for—be sure to contact a financial professional.
Moving Forward
For a little piece of plastic, a small business credit card offers some serious advantages.
As we’ve seen, you’ll get fast access to capital, a high credit limit, and amazing rewards along the way.
Just remember: if you can consistently pay your bills and keep your credit utilization below 30%, you’ll be able to strengthen your company (and your business credit profile).
At uLink, we’re dedicated to your continued success—both in the U.S. and abroad.
At uLink, we strive to empower immigrant owned businesses. This mission is the driving force behind our innovative B2B solution—uLinkbusiness.
As your dependable and rapid answer for all things business payments, uLinkbusiness features a reliable platform and competitive exchange rates for international transfers for businesses based in the U.S.
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