Do you need a business credit card to help you manage your expenses and grow your business? Do you want to learn how to apply for a business credit card? If you want to grow your business or guarantee cash flow, a business credit card can be what you need.
Read this article to understand the process of gathering the required information, filing out the application and increasing your chances of approval for a business credit card.
To apply for a business credit card:
1. Understand How Business Credit Cards Work
2. Have a Legit Business
3. Decide If You’d Rather Apply As A Sole Proprietorship
4. Get Your EIN
5. Determine Your Eligibility
6. Study Your Options
7. Determine Your Business’s Funding Needs
8. Choose a Business Credit Card That Meets Your Needs
9. Check Your Credit Scores (Personal and Business)
10. Gather the Required Paperwork and Apply
To gain more comprehensive understanding of this topic, read on.
1. Understand How Business Credit Cards Work
To apply for a business credit card, have a clear understanding of how a business credit card works; knowing how it works helps you to utilize the card when you eventually get it. Familiarize yourself with how a business credit card works so you can maximize the rewards, tools, and benefits that come with it.
Understand that like personal credit cards, business credit cards also require that you pay your bill in a month else you will have interests accruing on your balance. Keep in mind that some business credit cards—commonly referred to as corporate cards or charge cards—have no credit limit set, but you have to pay your balance in full each month.
Take advantage of this positive development to boost your business with the availability to cash a business credit card provides.
2. Have A Legit Business
To successfully apply for a business credit card, have a legitimate business. Generally, you need a legit business to qualify for a business credit card.
Any income-producing business can qualify for a legitimate business if it is not fraudulent. Having a legit and registered business name can help you build a strong credit history and demonstrate to the lender that you are a reliable borrower.
3. Decide If You’d Rather Apply As A Sole Proprietorship
To properly apply for a business credit card, decide whether you will rather apply as a sole proprietor. Keep in mind that applying for business credit cards as a sole proprietor neither increases nor decreases your approval odds.
To decide whether you will apply as a sole proprietor, your personal credit history is quite important; if you know that your personal credit history is not impressive, you shouldn’t apply as a sole proprietor.
4. Get Your EIN
To apply for a business credit card, get an Employer Identification Number (EIN) so that you can keep personal and business finances separate. If you employ staff members and you intend to keep track of their use of the business credit card, then getting an EIN is not negotiable.
You need your Social Security Number or another identifier as a taxpayer to get your EIN. Using your EIN helps you keep tabs on your personal and business credit history. Additionally, you can use the EIN to limit your liability on the business credit card to the business alone and exclude you personally.
>>>PRO TIPS: What Is a Corporate Credit Card
5. Determine Your Eligibility
To apply for a business credit card and be successful, determine your eligibility for the business credit card. To make sure your application for a business credit card is successful, check whether you meet the parameters set by the issuer; parameters for approval vary from bank to bank. However, there are basic requirements common to most banks.
To be eligible for a business credit card, your business must have a legal name, address, and phone number. Your tax identification number is also an important criterion for eligibility for business credit card approval. You also need to take track of your business revenue and expenses.
To qualify for a business credit card, another thing to check out is your credit score in order to know your chances of getting approval.
6. Study Your Options
To apply for a business credit card, study the varieties of available credit cards and the several rewards they offer. Pay attention to the pros and cons of all the credit cards about your business to properly settle for the best. Look out for the business credit card that offers more rewards when you meet the need for which you are applying for the card.
While conducting your research on which business credit card to settle for:
- Research the reward caps and redemption rules on each credit card to know what limits the use of the rewards. Compare the rules with your likely activities to decide on a compatible business credit card.
- Research the various fees payable and the interest rates on each of the business credit cards. Don’t use the advertisements on a business credit card for low-interest rates to conclude the business credit card indeed offers low rates, do a background check. Research if a business credit card requires you to pay your balance in full every month.
- Determine your business needs. Consider what features are most important to your business, such as rewards, cashback, or low-interest rates.
- Check your credit score. Your personal and business credit scores will be a major factor in whether you’re approved for a business credit card, so check your score beforehand.
7. Determine Your Business’s Funding Needs
To apply for a business credit card, determine your business’s funding needs and whether they justify the application for business credit cards. To run your business effectively you need access to funds so that you can make purchases to fulfill orders; therefore use your business credit cards to manage cash flow beyond what you can do with personal credit cards.
When embarking on corporate travels, make use of business credit cards to take advantage of the cash backs and other rewards peculiar to the use of business credit cards for business travels.
8. Choose A Business Credit Card That Meets Your Needs
To get ready to apply for a business credit card, choose a business credit card that meets your needs. Review the different options of the business credit cards available and compare them with your needs to determine the one that suits your needs most.
Consider what your business’s funding needs are and relate them to which of the available business credit card options has packages that make the choice worthwhile.
9. Check Your Credit Scores (Personal And Business)
To qualify for a business credit card, confirm your credit score to know your chances of getting approval. Determine whether you want to use your business credit score if you are in business for up to three years, or if you want to apply with your personal credit score using your Social Security number.
Check your credit score on your own before you apply to be sure they qualify you for a business credit card. Check out the credit score range of the business credit card you want and compare it with either your business credit score or your personal credit score.
Know that the higher your scores, the higher your chances of approval. Begin to take steps that can improve your credit scores like paying bills on time and increasing your credit limits—if your current credit score range is not within the recommendation of the business credit card you want.
>>>GET SMARTER: Business Credit Cards: Full Guide to Getting Approved Fast
10. Gather The Required Paperwork and Apply
To prepare for your business credit card application, gather all the information about the requirements for the application. Get your income and expenses reports ready for application. Gather other information like your Social Security number, personal identification, business identification, employer identification number, and incorporation documents.
Fill out the necessary online form for application. Check and attend promptly to any additional information the issuer may require to verify your application. The issuer can require additional information.
Conclusion
To apply for a business credit card, understand how a business credit card works—and make sure you have a legit business. Apply for an Employer Identification Number. Determine your eligibility and study the options you have.
Also determine your business’s funding needs and choose the business credit card that meets your needs. Check your credit score; gather the requirements and apply.
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