Steps To Getting A Business Credit Card – 5 Simple Steps
Steps To Getting A Business Credit Card – Top Simple Steps. It’s critical to keep your business’s money separate from your personal finances at all times. In addition to making it easier to track business expenses, it is critical for maintaining the legal protections that certain business structures provide.
To easily keep your business spending separate from your personal spending, you can obtain a small-business credit card and limit its use to purchases that are directly related to your company’s operations. You should be aware of the following if you’re starting a new business or simply haven’t gotten around to getting a business credit card yet:
How to Obtain a Commercial Credit Card
To obtain a business credit card, follow these Top simple steps.
1. Check to see if your company is eligible
The first step in obtaining a business credit card is to determine whether or not your company is eligible for such a card. The good news is that almost any type of business can qualify for a business credit card, which is a welcome relief. You can find credit card issuers who are willing to work with you regardless of whether you have a formal business structure such as an LLC or a corporation or whether you are simply operating as an unincorporated sole proprietorship.
You can inquire with individual credit card issuers about whether or not your company is eligible. Some employers may require you to have been in business for a certain amount of time or to have a certain level of revenue. The terms and conditions document that comes with the credit card will usually contain this information. However, don’t be afraid to contact customer service if you can’t find the information you’re looking for. Using your personal Social Security number in lieu of an Employer Identification Number is acceptable if you’re a startup that hasn’t yet established a formal business structure.
Keep in mind that the types of credit card offer that you are eligible for are determined by the type of business that you own and operate. Some credit card issuers specialize in working with sole proprietors and freelancers, whereas others prefer to work with small businesses that are formally organized and registered with the government.
2. Conduct a personal credit check
You can expect your personal credit history to have an impact on your ability to obtain a business loan or credit card for the company you work for. When evaluating your application, many credit card issuers take into account both your personal credit history and your business credit history. Many credit card companies also require a personal guarantee from you that you will be responsible for the debts before issuing the credit card to you.
If you haven’t been in business for a long period of time, your personal finance credit is more likely to be considered. Before you apply for a business credit card, check your personal credit report to ensure that you have a credit score that is within reason. If you have poor credit, you should work on improving it before applying. This can be as simple as working with the credit bureaus to have errors removed from your credit report, or as difficult as repaying a number of large loans in a short period of time.
In the long run, building a long payment history on a personal credit card, line of credit, or another loan is the most effective way to raise your credit score.
Improving your personal credit score before applying for a small-business credit card will not only improve your chances of qualifying for a card, but it will also improve your overall financial situation. This information can also be used to determine your credit limit, interest rate, and other important aspects of your card.
3. Increase the cash flow of your company.
Once you’ve improved your personal credit score, make certain that you can demonstrate strong cash flow in order to make your business credit card application more attractive. It makes sense that lenders want to make sure that you have a consistent source of income before extending you a line of credit.
In order to improve your company’s cash flow, the most obvious solution is to increase sales. It is generally true that the more money your company makes, the better its cash flow is.
You can also make an effort to reduce the expenses of your company. This lowers the rate at which you exhaust your cash reserves and increases the lender’s confidence in your ability to manage your line of credit responsibly.
4. Examine your available business credit card options.
When you’re ready to submit an application for a business credit card, it’s time to begin evaluating your alternatives. Chase, American Express, and Capital One are just a few of the credit card companies that offer business credit cards. Evaluate your options and make the best decision possible for your company’s success.
Fees for using a credit card
The cost of the card is one of the first things to consider when evaluating it. This includes the annual fee, foreign transaction fees, ongoing interest rates, and any introductory APRs that the card may offer during the promotional period. You want to choose a credit card that has a low or no annual fee to save money. When using the card to finance a large purchase, the low introductory APR is also a great benefit to consider.
Bonus for opening a new account and
Check to see if the card offers an account opening bonus, which is another important consideration. When you first open your account, many credit card companies will offer you a discount on balance transfers and other account services. Additionally, if you use the card to make a large purchase, you may be eligible to receive a sign-up bonus.
Rewards that continue to accrue
Consider the rewards that will accrue over time, in addition to the account opening bonus. Using a rewards credit card, small-business owners can save money or receive other benefits when they make purchases for their company. Travel rewards, reward points, cashback, and other benefits are examples of these perks. Different lenders have different reward partnerships and programs, so take the time to research your options and compare your options with others.
Many credit card issuers customize their card rewards and features to cater to specific types of businesses. Example: If you own a shipping company that makes frequent trips to gas stations, look for a credit card that offers more points per dollar spent on gas purchases than on other purchases. If you spend the majority of your money on office supplies, look for a credit card that offers higher rewards at office supply stores.
Business Management Characteristics
Also, take a look at the management tools and features that the card issuer provides you. Suppose you plan to issue employee cards to your employees. You might want to be able to set spending limits for your employees as part of that process. Some cards also come with additional benefits such as discounts on business services or integrations with business management software such as Quickbooks to make it easier to run your company.
5. Make an application for a business credit card.
Once you’ve decided on the type of small-business card you want, you’ll be ready to submit your application for it. The information you provide when applying for a business credit card will include both personal and business information. This information assists the card issuer in checking your personal credit and learning more about your business finances so that it can make a lending decision about your account.
You should be prepared to provide the following:
- Your first and last name
- Your date of birth
- Identifying information such as your Social Security number
- Please provide your mailing address.
- What is your phone number?
- The amount of money you earn each year
- Your housing payment is due each month.
- Besides that, you’ll need to have the following business information at the ready as well:
- Your organization’s name
- Your company’s legal structure is important.
- If your company has an Employer Identification Number, you should use it.
- The industry in which you are involved
- Your company’s physical address
- Your company’s telephone number
- Your company’s gross revenue
- your company’s total number of employees
- What you expect to spend on your business each month
- How long has your company been in operation?
When you use a business credit card, it is easier to keep your company’s financial records separate from your personal records. If you receive a rewards card, it also means that you will be able to earn rewards for the spending of your company.
In the event that you’re considering starting a business but aren’t sure what type of business to start, there are a plethora of small businesses that you can operate from the comfort of your own home. Opening a business credit card can assist you in getting your new company off the ground by providing you with quick access to funds. It’s important to keep in mind that, just as with personal credit cards, business credit cards have high-interest rates, and that you’ll need to be prepared to pay back the money you borrow.