A business credit card is a useful resource to have in your corner because it is one of the surest ways that can help you in the growth and prosperity of your business entity. It is a source of convenient funds that can be used to increase business credit and history.
If you are struggling with your finances you can take the help of your business credit card and borrow against it. The business credit card is considered a powerful key to saving a lot of money every year via discounts, cashback, hotel stays and traveling.
There are several credit cards available in the market how to choose the right one and take appropriate steps to acquire it is a dilemma. The first thing you should do is decide the reason for which you want to apply for a business credit card.
What are the types of rewards you are expecting and who are going to offer the maximum advantages in terms of value and lesser interest rates? Read the terms and conditions of all the cards and take steps to apply for one that seems the best to you.
Table of Contents
1) Are you sure you want a business credit card
Are you sure you want a business credit card and not any other type is the first question that you should pop into your mind before you start looking for steps to get a business credit card? Think about the financial structure and strategies of your organization and now think about how you are going to pay the interest and balance on the card.
You can make minimum monthly balances and make payments every month to reduce the actual credit balances. A business credit card gives you this option along with a preset spending limit so that you do not go over the budget.
This keeps a check on your expenses and helps you in curtailing excess spending. Be sure that you want this type of business credit card and then make a decision that will prove beneficial for your professional life.
2) Establishing a business identity
Establish that you are actively involved in a business if you are looking for steps to get a business credit card. A job that makes money for you can count as a business and makes you eligible for a business credit card.
You can be involved in any sort of business activity the only criteria is that you will have to incur business expenses during its operations. It is imperative that you set up and register your business organization before you apply for a business credit card as you will have to submit the proper documents along with the credit card application form.
It is not necessary to form either Limited Liability Company or a Corporation, you just need a business hence apply for a sole proprietorship where you are the only owner in the company. Incorporating your business helps to act as a protection against your personal assets so if you have a company use your business name instead of your personal one.
3) Establish credit for your company
Register your company with business bureaus that have credit reporting facilities. Agencies like Dunn and Bradstreet, Equifax Business and Experian Business have a credible reputation.
A good credit history will enable lower rates of interest and help you in establishing better payment plans with suppliers. Make sure to maintain a good credit score that is above 75 to get the best terms for yourself if you are interested in taking steps to get a business credit card.
4) Increase your personal credit score
If you have a business credit score then an issuer of a business credit card will look at your business credit score and if it is your first attempt at a credit card then he will also go through your personal credit score to determine whether you are eligible for the business credit card or not.
This will help the credit card company to understand whether you are responsible for your commitment or not. Remember a good credit score in your personal credit history will earn better rewards and low rates of interest.
If you are looking for steps to get a business credit card then increase your personal credit score by paying your bills on time. Correct any mistakes in the credit report by reviewing them regularly.
A credit score above 720 is considered very good hence try to reach the level to get a business credit card easily.
5) Find your best deal for a business credit card
Visit a bank and talk personally to the individual who deals in a business credit card to understand and know about the transactions. Get quotes from other banks and credit unions that issue a business credit card and know about the interest rates and deals that they are offering.
Check online for agencies that can offer you better terms and talk to their representatives to know about it in detail. Compare the interest rates, the fees that they will be charging, and the surcharge on late payments, cash advances, and debit transfers. You are aware of your reason to get a business credit card now think about the card that will offer the maximum value in accordance with it.
If you are a regular traveler opt for one that gives airline miles as a bonus or gives you a concession on a hotel stay, airline bookings, and car rentals and if you are a regular shopper opt for one that gives better cash backs and discounts. After contemplating every aspect make a decision and then take proper steps to get a business credit card.
6) Fill out the application form for the business credit card
Fill out the application form if you have decided to take steps to get a business credit card. You already have thought about it and decided on the one that you consider the best. The application form will ask for your personal information, be truthful even if the answer is not looking good on paper. Half-truths and lies have a way of getting back at you and causing lots of distress.
Use the name that appears on your business address, bank account, and tax and utility bills of your business. If you are a sole proprietorship company and do not have a formal business name you can use your own name.
You also need to write about the address of your business, phone number registered with the business entity and the age of the business along with the revenues you are earning. Also, fill in the number of employees’ you have and if you are the sole worker or a freelancer enter 1 for yourself.
You can fill this form online on the company website or personally in front of the representative of the business card company as per your wish.
7) Employer Identification Number or EIN
You need an Employer Identification Number or EIN with you if you are looking for ways to get a business credit card. You must have applied for it online because you need it for your business.
If you have a sole proprietorship business or are a freelancer only then you can use your Social Security Number in case you do not have the EIN. If you do then it is better to use EIN as it will keep the business entity separate from your personal assets.
8) The industry to which you belong and your role
A business credit card company will want to know about the industry to which you are related hence select the one that you are associated with and provide the information if you are looking for steps to get a business credit card.
You have to write your role in the company in specific terms, for example, are you’re the owner, general manager or just working in the company that you have named.
9) Annual business revenue
If you are looking for ways to get a business credit card then you need to fill your annual business revenue on the application form. The credit card company will want to know about it before it issues a card in the name of your business.
If you have just started a company and have yet to show any revenues do not get disheartened it is fine to state the actual fact.
10) Monthly expenses
If you are looking for ways to get a business credit card then you need to mention your monthly expenses correctly. It will help the credit card company to know whether you will be able to meet the parameters set by them or not.
Most credit card companies do not inquire for this information but if asked you must be ready with your estimates to answer correctly.
11) Submit all the necessary documents
If you are looking at the steps to get a business credit card then you need to submit all the necessary documents with the application form. You will need to give Xerox copies of business license, tax returns related to the business, utility bills and bank account statements of your business.
If you are submitting the form online you will need to scan all the documents and give them along with the form. You will generally have to wait for a few days to get the nod for a business credit card because the authorities will need to verify that all the documents are genuine.
12) Business credit card
Once you get the approval for a business credit card again review the rewards, discounts and interest rates the credit card company is offering you. Once you are satisfied you can accept the card and open your account. Activate once you get the business credit card.
It will arrive in the mail at the address you have given to the credit card company. Just open your account online and sign onto it. You can call the number given on the card, follow the directions diligently and activate your card.
It takes a minimum of two weeks for the business credit card to reach you and once you activate it you can start using it as per your convenience.
13) Reapply if rejected
You have been looking for steps to get a business credit card and have applied for one. Due to some reason, your application has been rejected don’t be disheartened there are several other business credit card companies in this world.
Apply to the one that has been next on your list. Just a word of caution as too many applications can affect your credit score and credit history and bring it down so better be meticulous in your efforts and apply for the one where you think that your chances are maximum and not at the place where the chances are very slim.
One can easily apply for a business credit card if he is involved in any activity that pertains to making money and having expenses related to business. A business credit card helps an entrepreneur in keeping his business expenses separate so that he can utilize its benefits during taxation.
It gives back bonus and rewards as cash back, travel rewards ad a larger purchasing power to the cardholder. Use your business credit card responsibly so that you can gain maximum benefits from it.
