Check Your Options Before Getting a Business Credit Card
Getting a business credit card makes sense. For one thing, it helps keep personal and business expenses separate (a crucial distinction, especially if you’re an LLC). For another, it can provide you with rewards and other benefits. As well, it can help you establish credit directly with vendors later on.
And you can secure a business credit card whether you have multiple owners and employees, or if you’re a sole-proprietor – even a freelancer. Anyone who earns money independently can apply.
Before Getting a Business Credit Card
Before you apply for a card, check over the different options available – rewards, benefits, interest rates, cash back, etc.
Check your credit score, which is available for free from many different sources. Investigate business card options with your own bank, as your existing relationship could swing the balance if your credit is borderline.
If your credit isn’t the greatest, though, a secured card (where you make a deposit that supplies your credit limit) may be available. However, you probably won’t qualify for the best perks.
You’ll want to gather your financial information, such as your annual business income, employer identification number (EIN) if you have one, or Social Security Number, name of your business, address, number of years in business, etc. If applicable, you’ll need the number of employees you have. If you’re a startup business, you will probably need to provide your personal financial information as well.
Apply for a Card
Once you’ve settled a card that you think will work best for you, submit an application. Some institutions take longer to approve business credit cards vs. personal cards, so be patient.
Don’t apply for credit too often. Many institutions perform what’s called a “hard” credit check when you apply with them, which can lower your credit score. Too many applications can doom your chances.
If you need to improve your credit score, try to keep new borrowing to a minimum, and pay down your existing debt. If necessary, getting a secured card and paying down the balance regularly can rehabilitate your score.
Links
VISA and Mastercard each have websites that list the different types of features in their lines of credit cards. You’ll want to check with individual issuers to see what perks they offer in addition.
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