Know when to apply for a small business credit card

Nov 25, 2024 | 5 min read

Answering these four questions before you start shopping will help you decide if it's time to apply.

Watching your small business grow is a great feeling. Watching its finances get more complicated? Not so much. As your business expands, you might have considered getting a business credit card to help make operations smoother and simpler. A small business credit card is a great tool to use as you build your business, but making sure it’s the right option for you before applying can save you time and energy in the future. Understand the benefits of a business credit card and ask yourself these four questions before you start shopping.

1. Is my business growing?

As your business brings in more revenue and customers, your costs of operation might be increasing in turn. If you’ve been using your personal credit card for small business expenses up to this point, you may find that its limit is no longer high enough to make the purchases your business needs, or isn’t offering rewards that are actually helpful to you. If sales have been steady and you’re not having trouble covering basic business or personal expenses, you’re probably in a good position to apply for a small business credit card. Just like you would with your personal card, make a habit of paying your balance on time and using it responsibly. If you’re planning to use a business credit card for one big expense that you’ll pay off over time, make a repayment plan and stick to it. This will help your business build its own credit score over time, and could make it easier to apply for loans in the future.

2. Could I benefit from the rewards a business credit card offers?

One big difference between personal credit cards and business credit cards is reward categories. Personal credit cards often offer cash back for restaurants, entertainment or grocery stores. These are great features, but they don’t help out much when you’re charging business expenses. Lots of business credit cards offer cash back rewards for things like office supplies and phone bills, which can save some business owners money in the long run.

3. Do I qualify for a business credit card?

To qualify for a business credit card, you'll typically need a solid business revenue, a good personal credit score, and essential business information. You need to have several bases covered to qualify for a business credit card. Your annual business revenue and average monthly spend are some of the biggest determinants. A bank wants to know that your business is in healthy financial standing, and you’re being wise with its finances. You should also take steps to ensure that your personal credit score is healthy when considering applying for business credit. If your score is low, try to boost it before applying for a business credit card. This can open up more doors to a wider variety of cards that might fit your business more closely.

4. Do I have everything I need to apply for a business credit card?

Before applying for anything, take stock of your personal and professional financial standing and get all the correct documents in order. You’ll need these basics:

Business’s legal name
Contact information for your business
Contact information for you, including credit history and SSN
Industry type (ex: restaurant, salon, etc.)
Legal structure (ex: corporation, nonprofit, LLC, etc.)
Time in business
Number of employees
Federal Tax ID (or EIN)
Annual business revenue and average monthly spend
Total annual income

Once all of these are in order, you’re ready to apply for a small business credit card. If you need guidance along the way, our Business Card Consultants and branch managers are always there to help you find the path that’s best for you and your small business.