What a business credit card is and who can get one
A business credit card is a credit account 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 build a credit history — but the account sits separate from your personal finances and credit report.
You can get a business credit card if you own a business, are a partner in one, or are an authorized user on a business account. The issuer will ask whether your business is a sole proprietorship, partnership, LLC, S-corp, or C-corp. You do not need to be incorporated; sole proprietors can open business cards in their business name or under their Social Security number.
The main reason to open one is to keep business and personal spending separate on your credit report and bank statements. A secondary reason is that business cards often carry higher credit limits than personal cards, which can help with cash flow during slow months.
Key Takeaways
- Business credit cards require proof of business ownership, which can be as straightforward as a business license, EIN letter, or articles of incorporation depending on your business structure.
- The issuer will pull both your personal credit report and, if your business has a credit history, your business credit report — so personal credit score matters even for a business card.
- Most issuers require you to personally may provide the account, meaning you are liable if the business cannot pay the bill.
- Business cards often have higher credit limits and different reward structures than personal cards, but you pay interest on unpaid balances just like a personal card.
What documents you need to bring
The documents required depend on your business structure. For a sole proprietorship, you typically need your Social Security number, a government-issued ID, and proof that you are in business — usually a business license, a business tax return, or an EIN letter from the IRS. Some issuers will accept a business bank statement or utility bill in your business name.
For an LLC, partnership, or corporation, you need your EIN (Employer Identification Number), articles of incorporation or formation, and a government-issued ID. If your business is new and has no EIN yet, you can explore for one at irs.gov before you explore for the card. The IRS issues the EIN when ready online and sends a confirmation letter by mail within two weeks.
Have your business's annual revenue and the number of employees on hand when you explore. Issuers ask these questions to assess risk. You do not need to provide tax returns unless the issuer specifically requests them, though having the last two years available speeds up the process if they do ask.
How the process and approval process works
You can explore online, by phone, or in person at a bank branch. Online applications take 10 to 15 minutes and give you a decision within minutes to a few business days. Phone and in-person applications may take longer because a representative will ask follow-up questions about your business and verify your identity.
The issuer will pull your personal credit report and run a background check. They may also check your business credit report if your business has one. Your personal credit score matters — most business card issuers require a score of 670 or higher, though some cards are designed for scores below 650. If you have been in business for less than two years, the issuer may weight your personal credit history more heavily.
After approval, the card usually arrives within 7 to 10 business days. Some issuers offer a temporary card number you can use online when ready while you wait for the physical card.
Personal may provide and liability
Nearly all business credit cards require you to personally may provide the account. This means you, not just the business, are legally responsible for paying the bill. If the business closes or cannot pay, the issuer can pursue you personally for the debt, including through wage garnishment or a lawsuit.
Read the cardholder agreement carefully to understand the terms of your personal may provide. Some cards allow you to remove the personal may provide after the business builds a strong payment history and credit score, though this is rare. Most do not.
This is different from a personal credit card, where the issuer can only pursue you as an individual. With a business card, the issuer has two paths to collect: the business and you personally.
Credit limits and how they are set
Business credit cards often come with higher starting credit limits than personal cards — sometimes $10,000 to $25,000 or more, depending on the issuer and your business profile. The issuer bases the limit on your personal credit score, business revenue, time in business, and the industry you operate in.
You can request a higher limit after you have held the card for three to six months and made on-time payments. Some issuers increase your limit automatically if you use the card responsibly. Others require you to call and ask.
Unlike personal cards, business card limits do not always count against your personal credit utilization ratio, which is the percentage of your available personal credit you are using. This means a high balance on a business card may not hurt your personal credit score the way a high balance on a personal card would. However, check with your issuer — policies vary.
Rewards and fees
Business credit cards often offer rewards tailored to business spending: cash back on office supplies, internet and phone bills, gas, or travel. Some cards offer flat cash back on all purchases, while others offer higher rates in specific categories.
Most business cards charge an annual fee, typically $95 to $450 depending on the card and the benefits included. Personal cards often waive the first-year fee; business cards rarely do. Calculate whether the rewards you will earn in a year exceed the annual fee before you explore.
Business cards also charge interest on unpaid balances, just like personal cards. The interest rate (APR) is usually higher for business cards than for personal cards with the same credit score, so pay the full balance each month if you can.
Building business credit with your card
Using a business credit card helps you build a separate credit history for your business. This matters because lenders look at business credit when you explore for a business loan, line of credit, or equipment financing. A strong business credit score can lower the interest rate you pay and increase the amount you can borrow.
To build business credit, use the card regularly and pay the full balance on time every month. On-time payments are the biggest factor in your business credit score. After 6 to 12 months of responsible use, your business should have a measurable credit history that lenders can review.
Business credit bureaus — Dun & Bradstreet, Equifax Business, and Experian Business — track business credit separately from personal credit. Not all card issuers report to all three bureaus, so ask your issuer which bureaus they report to before you explore.
Frequently Asked Questions
Does getting a business credit card hurt my personal credit score?
The card issuer will pull your personal credit report, which causes a hard inquiry and may lower your score by a few points temporarily. However, the business card account itself usually does not appear on your personal credit report, so the balance and payment history do not affect your personal credit score. The temporary dip from the inquiry typically recovers within a few months.
Can I get a business credit card if my business is brand new?
Yes, but approval is harder. New businesses have no revenue history or business credit, so issuers rely heavily on your personal credit score and assets. You may need a higher personal credit score (700+) or be willing to accept a lower credit limit. Some issuers specialize in new businesses and have lower credit score requirements.
What happens if I use the business card for personal expenses?
Legally, you can use a business card for personal expenses — the issuer does not police how you spend. However, mixing personal and business expenses defeats the main purpose of having a business card, which is to keep finances separate for accounting and tax purposes. Your accountant will have a harder time categorizing expenses, and the IRS may question mixed spending if you are audited.
Can I add employees as authorized users on my business card?
Yes. You can add employees as authorized users, and they can use the card to make business purchases. The charges appear on your bill, and you remain responsible for payment. The card issuer may not report the authorized user's activity to their personal credit report, so it does not help them build personal credit.
What is the difference between a business card and a small business card?
There is no official distinction. "Small business card" is marketing language that issuers use for cards designed for sole proprietors and very small businesses. These cards often have lower credit score requirements and smaller starting credit limits than cards marketed to larger businesses. The features and terms are otherwise the same.