What a business credit card is and who can get one
A business credit card is a credit card issued in your business's name rather than your personal name. It works like a personal credit card — you charge purchases, receive a monthly bill, and pay interest if you carry a balance — but the account reports to business credit bureaus instead of personal ones, and the card itself usually has your business name printed on it.
You can get a business credit card if you own a business, whether that business is a sole proprietorship, partnership, LLC, S-corp, or C-corp. You do not need to be incorporated or have employees. A freelancer, consultant, or side business owner can get one. Most issuers require you to have a business tax ID (EIN) or to use your Social Security number if you are a sole proprietor without an EIN.
The issuer will check both your personal credit and, if your business has been operating long enough to have a business credit history, your business credit. For a new business with no history, they rely almost entirely on your personal credit score and income.
Key Takeaways
- Business credit cards are issued in your business name and report to business credit bureaus, keeping business spending separate from your personal credit file.
- You need a business tax ID (EIN) or your Social Security number, proof of business ownership, and usually a business bank account statement to explore.
- The issuer will check your personal credit score and may check your business credit if it exists, so a personal score of 670 or higher makes approval more likely.
- Business credit cards typically have higher credit limits and different rewards structures than personal cards, but the interest rates and fees vary widely by issuer.
- You are personally liable for the debt even though the card is in your business name, so late payments or defaults will affect your personal credit.
Documents and information you will need to gather
Before you start an process, collect these items. Having them ready speeds up the process and reduces the chance you will need to reapply or provide information twice.
You will need proof of business ownership. For a sole proprietorship, this is often a business license or a DBA (Doing Business As) certificate from your county or state. For an LLC, bring a copy of your Articles of Organization. For a corporation, bring your Articles of Incorporation. If you do not have formal documentation yet, some issuers will accept a business plan or a letter from your accountant stating the business exists.
Bring a recent business bank account statement — usually from the last 30 to 90 days. This shows the issuer that the business is active and has cash flow. You will also need your business tax ID (EIN), which you can obtain from the IRS for free if you do not have one, or your Social Security number if you are a sole proprietor operating under your own name. Finally, bring a government-issued photo ID and your Social Security number for the personal credit check.
How the process process works
Most business credit card applications happen online and take 10 to 15 minutes to complete. You will enter your business name, structure (sole proprietorship, LLC, etc.), the date you started, your business address, and your business phone number. You will then enter your personal information — name, Social Security number, date of birth, and personal address — because the issuer uses this to run your personal credit check.
The issuer will ask about your annual business revenue and your role in the business. Be honest about revenue; issuers cross-check this against tax returns if they request them later. You will also enter the business bank account information so the issuer can verify it exists.
After you submit, the issuer runs a hard inquiry on your personal credit report. This temporarily lowers your personal credit score by a few points. The issuer may also check your business credit if your business has been operating for at least two years and has established a credit history. A decision usually comes within one to three business days, though some issuers take up to a week.
What credit score and business history you need
Most issuers prefer a personal credit score of 670 or higher, though some will approve scores as low as 600 if your business revenue is strong. A few premium cards require a score of 700 or above. If your score is below 650, approval becomes less likely, though not impossible — it depends on your business revenue and how long you have been in business.
Business history matters less for new businesses. If your business is less than a year old, the issuer relies almost entirely on your personal credit and income. If your business is one to two years old, the issuer may request a business tax return to verify revenue. If your business is older than two years, the issuer will likely check your business credit report through Dun & Bradstreet, Experian Business, or Equifax Business. A strong business credit score (typically 75 or higher on a 0-100 scale) can help approval even if your personal score is lower.
If you have been denied, you can reapply after three to six months, especially if you have improved your credit score or increased your business revenue in that time.
The difference between personal liability and business liability
This is the most important thing to understand: even though the card is in your business name, you are personally liable for the debt. If your business cannot pay the bill, the card issuer can pursue you personally for the money. Late payments or defaults will show up on your personal credit report and damage your personal credit score.
This is different from a business loan, where the lender may have recourse only to the business itself. With a business credit card, the issuer treats you as the guarantor. This is why they check your personal credit so carefully — they are betting on you, not just your business.
If you are concerned about personal liability, some issuers offer corporate credit cards for C-corporations, which may limit personal liability in certain circumstances. However, most issuers still require a personal may provide from the business owner, so the protection is limited. Check the card's terms before you explore if liability is a concern.
Credit limits and how they are set
Business credit cards often come with higher credit limits than personal cards — sometimes $10,000 to $50,000 or more, depending on your credit and revenue. The issuer bases the limit on your personal credit score, your business revenue, how long your business has been operating, and your business credit history if one exists.
You do not choose the limit; the issuer sets it when you are approved. Some issuers allow you to request a higher limit after you have used the card responsibly for three to six months. Others review your account periodically and raise the limit automatically.
Be aware that a high credit limit does not mean you should use it all. Carrying a balance above 30 percent of your limit will hurt both your personal and business credit scores. Many business owners use these cards for cash flow management — charging expenses and paying the full balance each month — rather than carrying a balance.
Rewards, fees, and comparing cards
Business credit cards often offer rewards — cash back, points, or miles — on specific categories like office supplies, gas, or travel. Some cards offer flat cash back on all purchases. The rewards structure varies widely, so compare cards based on where your business spends the most money.
Most business cards charge an annual fee, which ranges from $0 to $500 or more depending on the card's benefits. Some cards waive the first year's fee. Calculate whether the rewards you will earn exceed the annual fee; if your business spends less than $10,000 per year on the card, a high-fee card may not be worth it.
Interest rates on business cards are typically higher than on personal cards, ranging from 16 percent to 27 percent APR depending on your creditworthiness. If you plan to carry a balance, compare APRs carefully. Some cards offer an introductory 0 percent APR period for the first three to six months, which can help if you need to spread out a large purchase.
Frequently Asked Questions
Do I need an EIN to get a business credit card?
No. If you are a sole proprietor, you can use your Social Security number instead. However, using an EIN keeps your business finances more separate from your personal finances and is generally better for your business credit. You can get an EIN from the IRS website for free in about 15 minutes.
Will a business credit card hurt my personal credit?
The hard inquiry when you explore will lower your personal score by a few points temporarily. After that, the card's activity reports to business credit bureaus, not personal ones, so on-time payments help your business credit but do not directly help your personal credit. However, late payments or defaults will show up on your personal report and hurt your score.
Can I use a business credit card for personal expenses?
Technically yes, but it is not a good idea. The card is meant for business expenses, and mixing personal and business spending makes accounting and tax time harder. If the IRS audits your business, commingled expenses can raise questions. Keep business and personal spending separate.
What happens if my business credit card process is denied?
Ask the issuer why you were denied — it is usually due to a low credit score, insufficient business revenue, or a short business history. You can reapply after three to six months, especially if you have improved your credit score or grown your revenue. In the meantime, consider a personal credit card or a business line of credit as an alternative.
Can I get a business credit card if my business is brand new?
Yes. New businesses are approved regularly, though approval depends heavily on your personal credit score and income. The issuer will not have business credit history to check, so they rely on your personal creditworthiness. A score of 670 or higher and proof of business ownership usually make approval possible.