How to Pick a Business Credit Card

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• Why You Should Get a Business Credit Card
• Best Credit Cards for Small Businesses 2024
• Business Credit Card Reviews

Key Benefits of Business Credit Cards

Having a business credit card helps create a clear separation between personal and business finances. This not only preserves the corporate veil but also makes it easier to document tax reductions. Proper management of business credit cards can lead to a stronger credit profile, which can be invaluable if loans are needed in the future. 

How to Pick a Business Credit Card – Transcript

Business credit cards help you to separate personal and business expenses, provide your business with extra funding, and are an important first step to building a solid business credit score. But with so many options to choose from and so much fine print to read through, the process of deciding on a business credit card can be paralyzing. 

Not to worry, though – we'll be covering everything that you need to know about selecting a credit card for your business in this video. 

Hey everybody, Will Scheren here from Small Business Startup Guide by TRUiC. This video is part of a larger course dedicated to helping small business owners cut through the noise and get to the essentials of starting and operating their business. If that sounds like it would be really useful to you, be sure to like and subscribe. 

After establishing a business bank account for your business, you'll want to get a business credit card as well. 

Why does your business need a credit card? There's many reasons why businesses should make purchases using business credit cards. They can help to provide another degree of separation between personal and business expenses. By keeping your finances separate, you not only maintain the corporate veil, but you also increase your chance of lowering your taxable income. 

By using your business credit card for your professional charges, you can better organize your tax-deductible expenses come tax season. They can provide flexible finance. If your business needs to make a large purchase but does not have a lot of stored funds, a business credit card can help finance that purchase. This is especially important for freelancers and contractors. 

When managed properly, business credit cards help your business to build stronger business credit. This can prove helpful should you decide to take out a loan. And finally, depending on the business credit card you choose, you can enjoy different rewards that can help your business grow. 

Choosing the right credit card for your business – There is almost an unlimited number of credit cards that you can choose from for your business, so it's important to know what factors you'll be weighing as you're researching credit card providers. 

Ultimately, there's only three variables to consider: the limit on the card, the repayment terms for the credit card, and the benefits it offers. A credit card limit is the maximum amount of money that a borrower can spend on the card without repaying the issuer. Credit card limits are determined by the issuer after they look at the borrower's credit history, including their credit score and other factors. These factors can include the borrower's history with the card issuer, how many other cards the borrower has open, and the income of the borrower. 

For new and young businesses, repayment terms consist of the rate of interest that credit card companies will charge the borrower for carrying a balance with the lender. As well as the amount of time that the borrower has to pay off their debt. And how frequently interest will be charged. Depending on the card, repayment terms can fluctuate. Many credit cards offer introductory repayment terms. 

And credit cards also offer various benefits, including cash back, travel points, gas points, and more. If credit card benefits can add value to your business and save it money, these benefits should be considered as you research the right credit card for your business as well. 

How to qualify for a business credit card – Most banks will look at more than just your business type when considering whether or not to approve you as a cardholder for your new business. Your existing personal credit score will be a big factor in whether a credit card company will accept your application. If you're applying as a startup business, you'll need to provide your personal credit score as proof that you and your business are a good candidate for a business credit card. Businesses with a history of missed payments or late payments will have limited options when applying for a business credit card. 

How to apply for a business credit card – Although credit card companies will have slightly different registration processes, all applicants will need the following information to apply for a business credit card: 

The legal name and address of the business; the DBA name; the business structure – which is whether your business is legally structured as a corporation, sole proprietor, or LLC; the industry your business operates in; the role of the applicant at the company (you'll need to prove that you're an authorizing officer and are able to apply on behalf of your business); the business's ownership type and the number of owners; the date the business was established, the annual business revenue; the gross annual income; the business's EIN number; and the Social Security number of the applicant. 

Where to apply for a credit card for your business – Major credit card companies that also offer business services include American Express, Bank of America, Capital One, Chase, Citibank, Wells Fargo, and more. You should definitely explore each of the credit card opportunities that these providers can offer your business when starting your business. 

We keep a list of the strengths and weaknesses of each of these credit card providers on our website, and we've provided a link to that page below this video. And we keep a list of various credit cards that we found for businesses with niched-down needs on our website as well, and we've also provided that link below this video. 

So that takes care of what you need to know regarding picking a credit card for your business. In the next video in the course, we'll be tackling another business back-office essential: business insurance. 

This video is part of a step-by-step course that gives business owners all of the essential information for starting and operating their business. We’ve provided a link below this video for you to get access to all of the free and discounted business tools we mentioned in this course. 

Be sure to like and subscribe to get more of this content. We’ll see you in the next video, and if you have any questions, let us know.