How do I get a business credit card for my startup?
The first thing to determine is whether you need a regular small business credit card or a corporate card. In general, only large corporations with millions in annual revenue will qualify for a corporate card. Unless your startup has significant venture capital, you’ll likely need a small business credit card.
Applying for a small business credit card is very similar to applying for a personal credit card. You simply choose a credit card, head to the issuer’s website, and click “Apply.” Fill out the application, submit it — and wait. In most cases, you should get an online decision from the card issuer within a few minutes. Rarely, you may need to wait up to a week for a decision to be mailed to you.
Information needed for a business credit card application
You’ll need to provide information about you and your business when you apply. Typical requirements for a business card application include:
- Your name
- Your address
- Your date of birth
- Business structure (LLC, S Corp, etc.)
- Legal business name
- Business address
- Business phone number
- Date your business was established
- Business category (manufacturing, retail, etc.)
- Tax ID number (ETIN for LLC/corporations, SSN for sole proprietors)
- Your average annual business revenue
- Estimated monthly credit card spend
As a startup, you may not have much revenue to report. That’s OK! Banks understand that starting a small business is a long-term project. You can still get some of the best business credit cards for startups if your revenue is a work in progress. The important thing is to avoid padding your numbers. If the bank asks for supplemental documentation, you could be in real trouble if you lied on the application.
Credit card issuer rules
Some credit card issuers have specific rules about who can apply that have little to do with your business. Most are limitations on how many cards you can have and how often you can open them.
For example, American Express has limits on how many Amex cards you can have at any one time. Specifically, you’re limited to four Amex credit cards and up to 10 charge cards. This includes both personal and business cards. You can also only earn one welcome bonus per Amex card product per lifetime.
Chase is another credit card company with application restrictions. In particular, Chase has what’s known as the 5/24 rule. This rule means you’ll generally be rejected for a new card if you’ve opened five or more cards in the last 24 months. This rule applies to both consumer and business credit cards.
How to pick the best business credit card for your startup
There’s no one-size-fits-all credit card for every startup. Choosing the best card for your new business will depend on several factors. When comparing credit card types, consider the rewards, the cardholder benefits, and any applicable card fees (including an annual fee).
The credit card rewards
Purchase rewards are one of the best perks of credit cards. But the type of rewards you choose can influence how you use your card.
- Cash back: Cash back rewards are the simplest type of credit card rewards. You earn it at a set rate, and redeem it at a set rate. Most cash back cards let you redeem for a statement credit to help pay your credit card balance. Some also offer gift card purchases.
- Points: Rewards points are ideal for people who want flexibility in how they use their rewards. Many points programs let you redeem for everything from cash back to travel. The best points programs also let you transfer your rewards to an airline or hotel loyalty account.
- Miles: The nature of miles rewards will vary by card. With regular bank-branded cards, miles operate similarly to points. You can redeem for statement credit, gift cards, or sometimes transfer to a hotel or airline account. However, if you have a cobranded airline credit card, you’ll earn actual frequent flyer miles for the airline associated with your card.
READ MORE: How Do Credit Card Points Work?
Choosing the type of rewards
The type of rewards you choose can greatly impact their value. This is due to the different ways you can redeem them. Cash back is usually pretty straightforward. If you earn $5 in cash back, it redeems for $5 in statement credit.
Points and miles can have variable values. Redeeming points/miles for statement credit can yield $0.005 to $0.01 per point. But if you transfer your rewards to an airline or hotel account, you could earn $0.01 to $0.04 or more by redeeming for certain types of travel.