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The Ultimate Guide to Business Credit Cards

This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author's alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This content was accurate at the time of this post, but card terms and conditions may change at any time. This site may be compensated through the credit card issuer partnership.
business credit card guide

One of the most difficult challenges new entrepreneurs must overcome is accessing money to help bring their business ideas into reality. Many would-be business owners find themselves between a rock and a hard place.  You can’t access some popular means of financing like a business loan without a robust business credit history; yet, how can you build business credit if you can’t find an establishment to loan you money? Enter business credit cards.

Business credit cards give small business owners the opportunity to borrow funds as needed to finance purchases that will help get a business off the ground. At the same time, opening a business credit card account helps entrepreneurs build business credit history, which is essential as the business grows and requires additional investments.

Why Do I Need a Business Credit Card?

Many new entrepreneurs wonder why it’s important to open a credit card account on behalf of their business, when it’s just easier to use their personal card. In fact, there is a multitude of reasons why you should opt for a business credit card in lieu of using your personal accounts.

Simplified Accounting

When tax season comes or even when it’s just time to balance the books, things are much more streamlined when personal and business credit accounts are kept separate.

Nicola Ford, owner of HAUTEheadquarters.com, an online retailer selling designer fashion jewelry and accessories, has used a business credit card to help grow her business. She said, “From an accounting perspective, things can become very muddled when you intermingle your daily personal charges with business charges and expenses. For accounting and tax purposes, I think it is advisable to keep the two separate.”

Some business credit cards even offer more detailed account statements that help companies analyze spending at a granular level so they can make informed budgeting decisions.

Maintain Your Personal Credit Score

Opening a business credit card helps keep your personal credit score in tact, as all activity is attributed to your business. Even if your accounts are maxed out to help finance business purchases, it will not impact your personal credit. That doesn’t mean you won’t be personally liable to repay the credit card company if the business defaults, but it is still a prudent protection.

Purchase Protection

Business credit cards offer other defenses for small businesses, such as purchase protection, warranty extension, and insurance on charges for things like rental cars or other travel expenses. These safeguards can prevent a small bump in the road from crippling your small business.

Forge a Unique Business Identify

Opening a business credit card account is one step to start establishing your business as its own entity, separate from you as an individual. Getting a business credit card should be one of the items on your to-do list when starting a business, along with things like securing a unique phone number and mailing address, and obtaining proper state and local licensing.

Build a Credit History

Perhaps the best motive to get a business credit card for your emerging company is to ensure that you are building a credit history. It will be important to show that you have used credit responsibly when it comes time to apply for terms from vendors and suppliers or pursue a loan. Reflecting on her own experiences as a new business owner, Ford stated, “Understanding and knowing your credit score is also imperative, as this score dictates so much in terms of interest rates, credit lines, credit limits and more! I advise all entrepreneurs to really understand their financial acumen.”

Smart Spending with Credit Cards

Even if you feel that your business doesn’t necessarily need a credit card, open an account, use it a little each month, and pay it off immediately to start building a credit history for your company.

With generous lines of credit, some entrepreneurs may get carried away and charge more than they can pay off in a reasonable period. In turn, the business will incur interest and late fees that can mount to levels that are difficult to overcome.

“I would advise startups not to rely too heavily on credit lines due to the fact that if you dig yourself into a deep hole of credit card debt, it will be very hard to get out of with a limited cash flow,” Ford suggested. “I think sometimes entrepreneurs starting out get large lines of credit and just go wild. It is better to operate on a tight budget than incur debt for things your business does not need.”

If you can’t pay your credit card bill in full each month, try to pay at least a small amount down. It can also bode favorably for your business credit score if you pay a little bit toward your bill several times during the month, rather than waiting until the due date to make a larger payment. And try not to spend the maximum limit on your cards unless it’s absolutely necessary and helps you reach a business goal that will impact your bottom line. Maxed out cards have a negative effect on your business credit score.

How to Qualify for a Business Credit Card

To qualify for your first business credit card, it is imperative that your personal credit is in order. If your personal credit score is not ideal, try to hold off until you can improve it a bit. You might also consider adding a statement to your credit report, a provision allowed by the Fair Credit Reporting Act. This 100-word statement gives consumers an opportunity to explain their current scores. For example, if you were responsible about payments until you were laid off in 2009 when the economy tanked and therefore defaulted on your mortgage and other bills, credit lenders might give you a second chance on your credit card application.

Applying for a business credit card as a sole proprietor requires little more than your social security number. However, it’s important to note that as a sole proprietor, you will be personally responsible for all of your business’ debts. Applying for a business credit card as another class of business (e.g., LLC or incorporation) requires the proper legal paperwork and an Employer Identification Number.

When in doubt, it might be worth the application. If you are not approved, you can always follow up with the credit card company to find out why and what you can do to improve your chances next time.

Best Business Credit Cards

Some of the biggest perks of opening a business credit card account are the rewards that are associated with it. These rewards usually differ from those offered by personal credit cards in that they are attractive to business owners who spend a lot on things like travel and office supplies.

Heidi Boynton, founder of The Mini Mermaid Running Club, an afterschool running and self-development program for girls, and recent recipient of the Toyota Everyday Heroes Award, uses a credit card to pay for everyday business purchases. When choosing a card, she and her colleagues weighed the options and selected the one with the rewards that best met the company’s needs.

Boynton said, “When we were shopping for a credit card, we looked at what our organization could benefit the most from when it came to rewards. We wanted the REI card, but that didn’t make any sense, because it would just buy us more play stuff. We looked at where we spent money that we could apply a reward. Our director of operations lined up all the options and looked at all the fees. I travel a fair amount for the organization for fund development, recruiting, and public speaking. So, for us, the Southwest Airlines card let us get the fastest return on rewards. It had better points per dollar than anything else.”

Some of the most popular cards with big opportunities for rewards include the following.

Chase Ink Cash – Great for Cash Back

  • No annual fee
  • Zero percent APR for 12 months on purchases and balance transfers, and then an ongoing APR of 13.49 percent
  • Earn $300 dollar bonus cash back after you spend $3,000 on purchases in the first three months from account opening. You’ll get generous cash-back rewards on several everyday purchases
  • Earn 5 percent cash back on purchases of office supplies, phones, phone service, Internet service, and TV service for the first $25,000 spent each year
  • Earn 2 percent cash back at gas stations and restaurants for the first $25,000 spent each year
  • Earn 1 point per dollar spent on everything else, with no limit

Capital One Spark Miles for Business – Great for Travel

  • Earn an unlimited 2 miles per dollar, which can be redeemed for travel statement credit and more
  • Earn a bonus of 50,000 miles when you spend $4,500 within the first three months
  • No annual fee for the first year, $59 after that

Chase Ink Plus – Great for Rewards

  • Earn 5 points per dollar spent on purchases of office supplies, phones, phone service, Internet service, and TV service for the first $50,000 spent each year
  • Earn 2 points per dollar spent at gas stations and hotels for the first $50,000 spent each year
  • Earn 1 point per dollar on everything else, with no limit
  • Points are valued at 1.25 cents each when redeemed for travel; points can also be redeemed for items, and can be used as payment on Amazon.com

Making the Most of Rewards

Getting the most bang for your buck when it comes to business credit card rewards takes a little bit of savvy.


Be aware of whether the points you accumulate expire or if you’re able to roll them over each year. If there is an expiration date, make sure you cash in beforehand. It might even be worth scheduling a reminder on your calendar to ensure you don’t let these precious rewards go to waste. Some credit cards that allow you to redeem points for travel expenses might also have a limit on when you can apply the points (e.g. no more than 90 days after the charge).

Some travel redemptions might have blackout dates around holidays and other peak times. Check to see if you need to figure this in to your travel plans.

Look out for special bonus periods. For example, one month you might be able to earn triple points on all gas purchases. So, it could be worth your while to do an extra fill-up at the end of the month, even if you don’t really need it yet.

Also, read the fine print. The rate at which you earn rewards might change once you’ve spent a certain annual dollar amount. If the rate decreases, depending on your projected spending for the remainder of the year, it could be worth it to put that card aside and start using another one that will offer better rewards for that period. If the rate increases, you might want to strategically time large purchases.


Typically, redeeming credit card rewards points for travel allows you more value per point than redeeming them on other goods. Your credit card might also grant you special access to airport lounges, hotel business centers, or other VIP experiences while traveling.

Big-ticket Redemptions

Check the way in which your credit card handles rewards points redemptions. In many cases, the points are not cashed in per dollar, but for a (sometimes wide) price range. For example, your card might let you redeem a hotel stay that cost between $300 and $600 for 600 points. Keeping this range in mind, you might want to save your redemption for another more expensive trip, or live it up a bit with a nicer room, room service, or other hotel services.

Frequent Spending

Use your business credit card as often as possible to earn as many points as possible, as long as you know you will be able to pay it off promptly. Opt to pay with a credit card whenever possible instead of using checks or cash.

Boynton uses this approach to maximize travel rewards for The Mini Mermaid Running Club. She said, “We really try to use our credit card and not touch our cash for anything other than paying bills that we have to use cash for. We try to use it for every single thing that we do, whether that’s postage, shipping, or supplies like pens, pencils, first aid kits, and t-shirts. We try to get all of the services and goods that we can with our credit card to get the maximum points.”

Business Credit Cards for Financial Health

Applying for a business credit card can significantly impact the future financial viability of your business. Credit cards help you establish business credit history, which is vital for securing loans, other types of financing, and favorable terms with vendors and suppliers. Credit cards also offer rewards of value to entrepreneurs, including travel expenses and perks, office supplies, and luxury goods. Do your homework before applying for a business credit card to pick the one that best meets your needs – They are not all the same when it comes to terms and rewards. Make sure to always spend responsibly. If you work to keep your debt manageable and always pay promptly, you’re business credit card will become a vital tool in helping to expand your business.

Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author’s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This content was accurate at the time of this post, but card terms and conditions may change at any time. This site may be compensated through the credit card issuer Affiliate Program.

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