What Is a Business Credit Card?


A business credit card has the purpose of helping the managers keep their business expenses under control and they sometimes offer rewards for business purchases. These rewards can consist of:

  • Up to 50% bonus on the overall cash back amount received annually;
  • Cash back after you previously spent up to a certain sum in a predetermined amount of time;
  • Cash back for a sum spent on office supplies (from a certain provider or from any provider);
  • Cash back for all purchasing that totals a certain sum;
  • Cash back for business meals at restaurants and at gas stations;
  • Bonus airline miles for a certain sum spent in a predetermined amount of time;
  • No introductory APR for half a year or one year or for the first several billing cycles;
  • Zero fraud liability in case you lose your business credit card;
  • A number of employee cards without extra costs.

Other reasons to apply for a business credit card


Applying for a business credit card has numerous advantages. One of these is keeping your business expenses separated from the personal ones. Owning a business credit card makes controlling your business purchases easier and allows you to make online, overseas or phone transactions easier. It also eliminates the necessity of collecting all receipts for your business purchases.

A business credit card can serve the same purpose a personal credit card does – it helps your business establish a good credit record. Your business will gain credibility with providers and financial institutions. You will encounter fewer problems when you need a business loan and you can also obtain it at more advantageous conditions (lower fees, higher credit limit).

You can save money through bonuses, rewards and cash-back mechanisms provided by the business credit card issuers.

How is a business credit card different from any other type of credit cards?


The Truth in Lending Act (TILA) and the Credit Card Accountability Responsibility and Disclosure Act of 2009 or, simply, the Credit CARD Act of 2009 are two important laws whose regulations do not apply to business credit cards, but to consumer cards exclusively. This means that businesses are deprived by the protection of these two laws, which reflects in several key consequences:

  • Business credit card issuers are not bound to keep the rate of existing balances stable and they can raise them anytime;
  • These companies are not bound to bill on the same date monthly either;
  • As opposed to consumer credit card issuers that need to send the clients a 3-week notice to receive and pay the bills, business credit card companies do not have to wait that long;
  • If you make late credit card payments, you will not benefit from the $25 cap on late fees;
  • Over-the-limit fees can go as high as the credit card issuer wants, unlike consumer credit cards where these fees cannot be higher than the amount the credit card holder went over the limit;
  • If you have a consumer credit card and took an advance with a different interest rate, your payments will first cover the higher interest loan; when it comes to business credit cards, the payments will go to the lowest interest loan;
  • Not all business credit card issuer report on your personal credit history, so if you planned to improve your credit score using your business credit card, you might get disappointed. Unfortunately, if you go into default with your business credit card, this will appear on your personal credit history;
  • You can get discounts on business-related product offers.

Steps in opening a business credit card

Business credit cards facilitate the financial management of small companies. You can make financial transactions without involving your personal credit lines and, regardless the success of your business, your personal credit score is not affected. If you want to open a business credit card, you will have to go through the following stages:

  • Be prepared to take only the credit you can pay back in full monthly, or at least in a timely fashion, so as not to hurt your business credit score.
  • You will not lack choices in finding credit companies willing to offer credit to your business, this is why you must be able to compare their offers and choose the most advantageous one. Pay attention to interest rates and additional fees, but do not sacrifice the quality of services received for the sake of low fees.
  • Manage all paperwork requirements – social security numbers of all people authorized to use the business credit card, information on your business (address, legal name, tax ID number).
  • Submit the application and remember that, if you request is rejected, you will have to wait one year before applying again.