How to Apply for a Business Credit Card

Learn about the differences between personal and business credit cards and how you can apply for one for your company.

Updated: May 18, 2024
Matt Crabtree

Written By

Matt Crabtree

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Generally speaking, pretty much anyone who's running a company can benefit from some of the features that come with a business credit card — whether you're an entrepreneur who's simply looking to separate your personal expenses from your business ones or you're just a start-up that's looking for a bit more flexibility with your finances.

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In fact, although most of our articles lean more towards helping the smaller businesses out, these cards can really be an asset for even the more established companies out there — basically anyone who's trying to streamline some of their financial transactions.

Still, aside from asking yourself, ‘How does a business credit card work?', actually applying for these cards can be a little bit complicated, too, given that their application process tends to look slightly different from your average personal credit card.

So, for a bit more clarity, we'll be walking you through the general process of obtaining your first business credit card throughout this article — as well as providing a bit of background explaining how these cards differ from personal credit cards and even what kind of impact it might have on your overall financial well-being.

It's worth mentioning here that pretty much every business credit card provider has their own unique application process, so it's impossible to do a ‘one size fits all' walkthrough in this article.

Having said that, there are plenty of similarities between each kind of application, so we'll be covering some of the general things you can expect so that you're better prepared when it comes to signing up.

Understanding Business Credit vs. Personal Credit

So, as touched on, there are quite a few major differences between these two kinds of cards that are worth coming to terms with before we dive straight into the specifics of how you actually get your hands on a business credit card.

Starting with personal credit, this typically refers more to your own individual financial reputation and what kind of history you have managing your personal expenses — generally involving things like personal credit cards and personal loans.

Business credit, on the other hand, is completely separated from your personal finances in the way that it's more of a reflection on how your company's performing financially — nothing to do with what your own financial life looks like.

So, you'd typically find that this relates much more to managing things like a company credit card and any other kind of financial transactions that are related to your business instead.

Ultimately, the main thing that separates them is the fact that business credit is linked to your company's name and details, not your personal credit rating.

We'll come onto this in a bit more detail later, but, essentially, separating the two provides a bunch of different advantages — whether it's protecting your personal assets or simply allowing your business to build its own credit history (which can be especially easy if you've got an interest free credit card).

Of course, though there are definitely significant distinctions between the two, it goes without saying that these cards share more similarities than they do differences — they're both still credit cards that give you the opportunity to access funds quickly and easily at the end of the day.

How Does a Business Credit Card Affect Your Personal Credit Score?

Generally speaking, one of the main issues that entrepreneurs seem to have whenever they're considering applying for a business credit card is how it might impact their personal credit score if, say, their business idea turns out to be unsuccessful, and they are left with a maxed out credit card.

So, while these business credit cards are definitely intended to separate all of your personal and business finances from each other, it's worth noting that there is some level of truth to this as they can still influence your personal credit score — just in a slightly more indirect way.

Let's take a look at how this actually works: whenever you go to apply for a business credit card, there's a pretty strong chance that whatever issuer you go to is going to check your personal credit history first so that they can gauge your creditworthiness (a term you'll probably be used to hearing if you've got at least one credit card).

Now, there's nothing particularly unusual about this as it's pretty common for any small business owners or sole traders out there without having a reputation that precedes you, like some of the larger enterprises applying for a card might have.

Ultimately, though, if you've currently got quite a strong personal credit history, you're definitely going to be more likely to qualify for pretty much any business credit card you want — coming with plenty of favourable terms, whether that's a higher credit limit or just lower annual fees.

So, going back to the original question, your own personal credit score can definitely still be affected if you mess around and end up misusing your business credit card, but these are all the same mistakes that you should be used to avoiding with your personal credit cards already — things like late payments and high balances on your business card, for instance.

However, this works both ways, too, as using your business credit card responsibly can actually help you to build and improve your business credit history, which can definitely be helpful for obtaining those cards with more favourable terms that we touched on earlier.

Choosing the Best Business Credit Card

Now that we've got a much clearer understanding of some of the basics let's take a look at how you can actually acquire one of these cards:

Assess Your Business Needs

First things first, go into your overall journey to find the right business credit card actually knowing what it is that you're looking to get out of it — do you need something simple that's just there to manage day-to-day business expenses, or would you rather have something that's going to let you finance much larger investments?

Furthermore, you might even want something that's going to help you earn rewards for you or your employees whenever you make any business-related purchases, from cashback to travel points for any business meetings you might have overseas.

Ultimately, just try and be aware of what stage your business is currently at because you've not really got any need to sign up for a card with an incredibly high credit limit (and therefore usually high-interest fees) if you're only a start-up business, for example.

Open a Business Bank Account

Naturally, the majority of business credit card providers out there are going to require you to have some kind of dedicated business bank account (like the ones we were talking about earlier) so you can show that you're running a business that's actually legitimate.

If you don't already have one of these, you may as well get one now anyway, as having a separate business bank account is also going to simplify a lot of your financial record-keeping, making it way easier to distinguish between personal and business transactions.

Research Credit Card Providers

So, once you've got an idea of your business's needs and you've set up your business bank account, it's time to shop around and see what credit card providers are out there.

In general, while you'll notice that most banks and financial institutions offer some kind of business credit cards, certain providers actually specialise in this by providing tailored solutions for various kinds of industries, so definitely look for one that's going to cater specifically to your business sector.

Check Eligibility Criteria

Every kind of business credit card you see is going to have its own criteria when it comes to eligibility — whether that's factors like how long your business has operated, how much you're making a year, or even just your credit history (like a normal credit card).

Certain cards will cater to established businesses with a solid financial track record, while others are way more appropriate for businesses just starting out, so ensure you meet the specific requirements of whatever card it is that you're interested in.

Application Process

So, in general terms, applying for a business credit card is typically going to involve filling out some applications with information about your company — whether it's your business's legal structure (sole trader, limited company, for instance), financial details, and what it is you plan on doing with the card.

Furthermore, some issuers might even want to take a look at your business plans or your financial projections, too, so make sure you have these on hand if they tell you that they need them during the application process.

Understanding the Key Features of Business Credit Cards

Now that we've walked through how you can apply for one of these cards, let's wrap things up by exploring some of the features business credit cards come with that can help you manage your business finances effectively:

Interest-Free Period

Firstly, similar to other kinds of personal credit cards like balance transfer cards, your business credit card provider might offer you an interest-free period when you're just starting out.

Naturally, this can be a massive help when you need to borrow money for business expenses but can't afford the interest charges that they come with — just make sure you're still paying the balance off in full by the due date each month.

Higher Credit Limits

Generally speaking, you'll notice that the majority of business credit cards tend to come with much higher credit limits in comparison to your average personal credit cards, so these are definitely more suitable when it comes to managing any of the financial needs your company might have.

Rewards and Perks

As touched on earlier, most business credit cards come with various kinds of rewards — things like cashback, travel rewards, or some discounts on business-related purchases, for instance — so try to choose a card that'll work with your company's spending habits.

Related Guides:

FAQs

What Is the Typical Credit Limit for a Business Credit Card?

Can I Use a Business Credit Card for International Transactions Without Incurring Additional Fees?

Are There Business Credit Cards With No Annual Fees?

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