This article delves into the nitty gritty on business credit cards. All you need to know about a business credit card
Business Credit Card Definition
An unsecured line of credit extended to a limited liability company or a sole proprietorship is known as a business credit card. The use of a business credit card helps proprietors to compartmentalize their spending. This makes record keeping easy, which is very helpful for filing taxes.What is the Function of a Business Credit Card?
The only real difference between personal and business credit cards is the rewards system and the security features offered.The Approval Process for Business Credit Cards and How to Apply for Them
Start by becoming pre-approved or pre-qualified. You can gauge the likelihood of your acceptance based on the following:- Review your most recent credit report. Your personal credit is still an important factor for the majority of small business cards.
- Evaluate several credit card choices. A wide variety of alternatives are on the market, each offering a unique combination of features, fees, interest rates, rewards, and promotions.
- Please select the most appropriate card. After you've reviewed your options, choose the one that best suits your needs.
- Register for a credit card. In order to proceed, you will be asked to supply various pieces of information, such as your EIN or SSN, as well as basic company statistics, yearly revenue, projected expenditures, and more.
- Fill out the application and then wait for a reply. Although certain credit card applications may take a few days to be processed, the majority of decisions are made promptly. Calling back for clarification could be necessary in certain situations.
- The mail will bring your card. It typically takes 7-10 days, however you can get faster shipping with some premium cards.
Methods for Obtaining a Business Credit Card in the Absence of a Personal Guarantee
A personal guarantee may be required for certain business cards, adding to the difficulty of establishing credit. Any amounts that remain due on the card will be charged to the person's (often the company's) personal account.Some credit cards, like the Brex Card*, do not necessitate a personal guarantee, making them ideal for individuals who would rather not be bound to a company account.
Methods for Applying for a Business Credit Card with Rapid Approval
The majority of credit cards that offer online application services will notify you promptly of your approval or denial. On rare occasions, the bank could want more information before approving your credit limit. If this is the case, you will often find out during the application process.A Guide to Obtaining a Business Credit Card Despite Poor Individual Credit
Your personal credit score is typically taken into account when you apply for a small company credit card. You should only apply for credit cards that specifically target people with restricted or terrible credit if your credit is already low. For individuals who are able to come up with the money for the security deposit, business secured cards are the most convenient solution. Alternatively, you might seek out credit cards that do not have a personal guarantee or work on raising your credit score prior to application.Procedures for Applying for a Startup Business Credit Card
Any company, no matter how new, can apply for a business credit card.If your company is just starting out, you can apply for a business credit card without worrying about your sales. Before approving a business credit card, banks look at the applicant's personal credit score, any other sources of income, and any history of relationships with the bank (such as a personal checking account).