There's a misconception that business credit cards are only available for high-income corporations. The truth is, as long as you work for yourself in any capacity, you can apply for a business credit card. It doesn't matter if you're a freelancer, an online retailer, or the owner of a big storefront.

If you're not paying your business expenses from a company bank account, having a dedicated credit card can make your bookkeeping easier. It can also make tax filing less of a headache because the Internal Revenue Service (IRS) approves keeping your personal finances and business purchases separate. To top it off, you also get rewards and perks from small business credit cards.

Keep reading to find out more about business credit cards, why you should consider getting one, and what you'll need to apply.

How Do Business Credit Cards Work?

A business credit card works the same as consumer cards, except its features and rewards are designed to meet the needs of small business owners. You can only apply for one if you work for yourself, of course. To get approved, you also need to sign a personal guarantee.

A personal guarantee means as the cardholder, you're still responsible for the debt in case your company can't pay the balance. There's really no way to get around it. There are business credit cards that don't require a personal guarantee like the Brex Corporate Card for Startups, but the requirements are not practical for most small businesses.

One thing to keep in mind is that any company credit card tied to your name also impacts your personal credit. The good thing is that business credit cards usually have higher credit limits than personal credit cards. You'll need to do your due diligence to find one that offers purchase protection with no excessive fees and interest rate hikes.

What Are the Benefits of Getting a Business Credit Card?

The main benefit of having a dedicated business credit card is keeping your company's expenses and personal finances separate. This is important because if you have a formally structured business structure, such as a limited liability company (LLC) or a corporation, the IRS requires you to have separate accounts for your business. You also get the following benefits:

  • It helps establish a credit history for your business. It's a way to build a business credit score for your company and start a relationship with financial institutions. If you maintain an excellent credit profile, you'll find it easier to get approved for business loans and other types of financing.
  • It makes managing your cash flow simpler. Having a separate credit card for your business makes it easier to keep track of your expenses. Knowing how much you owe and when you need to pay can help you manage your cash flow better.
  • It saves time with bookkeeping and tax filing. When you have a dedicated account for business expenses, the information you need for bookkeeping is easier to find and you can easily keep track of interest charges and borrowing fees.
  • It saves you money. Having a dedicated card for business spending means interest charges and annual fees can be a tax-deductible expense.

What Do I Need to Apply for a Small Business Credit Card?

Business credit card applications commonly ask for the following information:

  • Business name: If you're a sole proprietor, this would be your legal name if you don't have a trade name or a "doing business as" (DBA) name.
  • Social Security number (SSN) or employer identification number (EIN): Businesses are identified through an EIN for tax purposes. If you need an EIN, it's easy and free — submit your application on the IRS website and get it immediately.
  • Business contact information: Put down your address and phone number if you have a home business. Otherwise, you'll write down your office or store's address and phone number.
  • Personal identification: This refers to the acceptable standard proofs of personal identification, such as government-issued picture IDs.
  • Industry: This is the type of business you're in. Examples include retail, professional services, marketing, health care, and transportation.
  • Years in business: This is how long you've been in business.
  • Revenue and expenses: Give an estimate of your annual business income and expenses if you don't have the actual numbers.

How to Choose the Best Credit Card for Your Business

Start your search with the bank you use for your personal transactions. You already have a business relationship, which may work in your favor. When looking for a credit card for your business, compare interest rates, annual fees, and rewards programs.

Rewards credit cards generally fall into two categories: cash back or travel perks. Make your selection based on what benefits your business the most. If you can use miles for business travel, a travel rewards card might be the way to go. If you want to earn cash back or bonus points, stick with a cash-back rewards card.

However, pay close attention to the welcome offers or sign-up bonuses. If you plan to make a large purchase for your business, looking for a card with zero interest for the first year can minimize your interest payment. Also, if you have business expenses on your personal credit card, a card offering balance transfers can help you save on interest and manage your cash flow.

Get Approved for Your Business Credit Card Application

As mentioned, your business credit card can also impact your personal credit. Remember, hard credit checks and rejected applications could lower your personal credit score. Before you submit credit card applications, do the following to increase the possibility of getting approved:

  • Check your credit score. Credit card issuers will consider your creditworthiness before giving you a new business credit card. To get approved for a business credit card, you need good to excellent credit. Get your credit report from any of the three credit bureaus: Equifax, Experian, and TransUnion.
  • Compare business credit cards. There are so many options to choose from. Do your research and compare interest rates, fees, and rewards to make sure you're getting the credit card that meets your business needs.
  • Pre-qualify and get pre-approved. Visit credit card company websites and get pre-approved. Make sure you're only making a soft inquiry so it won't affect your credit score.

Best Small Business Credit Cards

Here are some business credit cards to consider to get you started with your search. Check them out, check your credit score, and apply now.

American Express Business Cash Card

If you're looking for a simple and affordable cash-back card, the American Express Blue Business Cash™ Card could be for you. It has a 0% introductory APR for 12 months from the date of the account opening. You also earn a rewards rate of 1% to 2% cash back on all eligible purchases per calendar year. You don't pay any annual fees, and your rewards points are automatically claimed as a statement credit.

Chase Ink Business Cash® Credit Card

This Chase credit card offers a great rewards rate if your business spending categories include significant amounts on gas stations, phone services, restaurants, and at the office supply store. With the Ink Business Cash® Credit Card, you get 2% to 5% cash back in combined qualifying purchases on the bonus categories and 1% back on all other spending.

You don't pay any annual fees and your welcome bonus includes a 0% intro APR period of 12 months plus a $750 bonus cash back. You can also add free employee cards with set spending limits. Lastly, you can redeem your rewards for cash back, gift cards, travel, and more through Chase Ultimate Rewards®.

Capital One Mastercard Spark Cash for Business

The Capital One Spark Cash for Business offers a flat-rate 2% cash back on everything. It's a great option if you just want a charge card and your business expenses don't fall neatly into the bonus categories that other cards use. Your welcome bonus includes a one-time $500 bonus when you spend $4,500 in the first three months and no annual fee for the first year. After the first year, you can earn the $95 annual fee as a cash back if you spend at least $4,750 on the card.

Blue Business® Plus Credit Card

The Blue Business® Plus Credit Card might be for you if you want membership rewards points but don't want to pay annual fees. This American Express card has a 0.0% introductory APR for 12 months from the date of the account opening. You get two points per dollar up to the first $50,000 and one point per dollar after that. You can use the Amex Travel Portal to book travel purchases and redeem points directly for airfare and lounge access. You don't have to transfer your rewards to their partners like Delta or Hilton.

The Business Platinum Card®

If you spend a lot of time traveling on the road or in the air for work, this card is an excellent option. The $595 annual fee is on the high side, but it's tax-deductible. It's worth it if these benefits can make your business travels easier:

  • Welcome offer of 100,000 points after spending $15,000 on eligible purchases with your Business Platinum Card in the first 3 months of card membership
  • 5X points on flights and prepaid hotels on the Amex Travel portal
  • Access to more than 1,300 airport lounges worldwide
  • $200 annual credit for incidental airline fees
  • Reimbursement of the application fee for TSA Precheck or Global Entry
  • Automatic elite status with Marriott and Hilton hotels
  • No foreign transaction fees

American Express® Business Gold Card

The Amex Business Gold card is designed for high-spending small businesses. The card gives you the flexibility to earn 4X points in two categories where you spend the most for each billing cycle. This card is worth considering if you spend a significant amount on any two categories from this list:

  • Airfare purchases directly from airlines
  • Advertising
  • Computer hardware, software, and cloud systems
  • Gas stations
  • Restaurants
  • Shipping

In addition, you'll receive a welcome bonus of 70,000 points if you spend $10,000 on eligible purchases with your card in the first three months. You also get 25% points back when you use your membership points to book flights on Amex Travel.

Let Skynova Help You Manage Your Small Business Expenses

A business credit card can help you build your company's credit, keep your business transactions separate, and organize your tax documents.

Do your own bookkeeping and manage your business expenses with Skynova's accounting software. Keep your receipts organized, backed up, and in one place. It's an easy way to maintain accurate records of your income and expenses.

You're also welcome to explore our platform for business templates and other software products to help you start and grow your business.

Notice to the Reader

The content within this article is meant to be used as general guidelines and may not apply to your specific situation. Always do your due diligence and consult with a professional to ensure that you're making the best decisions for your business.