• Home
  • /
  • Blog
  • /
  • The Ultimate Guide To Business Credit Cards For A Beginner

by Mike Vestil 

The Ultimate Guide To Business Credit Cards For A Beginner

Business credit cards are financial tools that entrepreneurs and small businesses use for their day-to-day operations.

The cards are offered by different financial institutions and have features tailored specifically to meet the needs of the business.

Business owners typically use these cards to cover expenses such as office supplies, travel expenses and materials for projects.

With the vast array of business credit cards available, business owners can find the one that best suits their specific needs in terms of features and benefits.

The following article will provide a comprehensive overview of business credit cards and the benefits they offer to entrepreneurs and small businesses.

5 Types Of Business Credit Cards

Business credit cards are a type of financial tool used by entrepreneurs and companies to track and manage their expenses.

There are different types of business credit cards with different features, benefits, and drawbacks. In this section, we will discuss rewards, cash back, low interest, secured, prepaid, and business cards specifically designed for small businesses.

By the end of this section, readers should have a clear understanding of the various types of business credit cards and which one best suits their needs.

1. Rewards

Business credit cards can offer unique rewards for those looking for ways to minimize their expenses. These cards often have higher reward points than regular credit cards, thus encouraging customers to use them more often.

Typically, rewards for business credit cards can come in the form of cashback, discount programs, or even travel rewards. Cashback rewards are particularly attractive as they provide a percentage of money back from the total expenses one makes.

Discount programs offer customers special discounts and deals from partnering merchants, which can help save money on everyday items. Finally, travel rewards allow customers to redeem points or miles for flights or hotel stays, or even discounts on car rentals and entertainment.

Depending on the card, users may also be eligible for exclusive access to airport lounges and exclusive offers. Rewards vary widely between cards and users should shop around for the best one for them.

2. Cash Back

Business credit cards offer owners a number of distinct advantages, such as cash back rewards. Cash back rewards come in a variety of forms, and selecting the right one depends on the owner’s needs and spending habits.

Generally, cashback options are based on the amount of money spent on the card each month and the type of purchases that were made.

Some cards provide a flat rate of cashback on all purchases, while others offer different tiers of rewards based on the type of purchase.

Some also offer a sign-up bonus for those who open an account with their card. Depending on the card, cash back rewards can be used for a variety of purposes, including making purchases, paying bills, or even redeeming for travel.

Business credit cards with cash back reward programs can be used to increase savings and offer owners the opportunity to make more informed purchasing decisions.

3. Low Interest

Low-interest business credit cards, such as the American Express Business Platinum Card, offer businesses seeking to save on interest a way to do so with a favorable APR.

When comparing rates, factors such as the card issuer’s creditworthiness and the length of the promotional period should be taken into consideration, and in some cases, the APR can be substantially lower than the standard APR.

With a low-interest business card, businesses can minimize interest charges on large purchases and take advantage of additional cash-back bonuses and other rewards.

Many cards offer an introductory period, enabling businesses to take full advantage of the low rate by planning purchases in advance and to use their extra savings to reinvest in their business.

This type of credit card is an ideal option for business owners looking to reduce their expenses and save on interest charges.

4. Secured

Secured business credit cards are a great way for businesses to build their credit score over time. These cards require customers to put down a security deposit, typically either the total credit limit or a fraction of it, that acts as collateral in case they are unable to pay the bill in time.

This can make it easier to get approval, because the debtor will have some assurance of being repaid. Secured cards also provide potential rewards such as cash back, travel rewards and discounts.

But, as with other types of credit cards, customers usually have to pay an annual fee and may also be charged for balance transfers.

As always, it’s important to review the fine print and find the card that is best suited to the business.

5. Prepaid

Business credit cards come in many forms and offer flexibility for companies of all sizes. Prepaid cards are one of the most popular options available, providing companies with the convenience to load and reload a funds balance and control spending.

These cards offer a way to manage funds without providing access to a business’ primary account, reducing the risk of account theft and misuse.

Businesses can also track usage and allocate their funds without depositing money into their accounts, allowing for easier and faster spending decisions.

Prepaid cards also generally have lower interest rates than traditional credit cards, which can drastically reduce costs for businesses. Additionally, prepaid cards often have low-cost international transaction fees, making doing business overseas more cost-effective.

4 Benefits Of Business Credit Cards

Business credit cards are an important tool for businesses, as they provide access to cash flow, rewards, security, convenience, and more. In this section, we’ll look at the various benefits of business credit cards, including cash flow management, rewards, security, convenience, and more.

1. Cash Flow Management

Business credit cards provide excellent tools to help businesses manage cash flow. These cards offer flexible payment options, rewards upon spending, and often a line of credit that functions as a financial cushion.

Companies can use business credit cards to easily pay for start-up costs, keep track of expenses, and budget more effectively. Business credits cards also help businesses set up and monitor credit limits for employees.

This can ensure that business purchases remain within the budget approved by the company, thus improving cash flow management. Business cards also offer purchase protections, enabling companies to reduce the stress associated with shopping for essentials.

Finally, business credit cards often come with business-specific rewards such as subscription discounts, travel reimbursements, and free credit tracking, providing additional value and managing cash flow more easily.

2. Rewards

Business credit card rewards can provide financial relief for organizations trying to juggle multiple costs. Companies often look for various ways to maximize the value of their credit-spending money.

The best way to do this is to select a business credit card that offers rewards tailored to the specific types of expenses they make. Many business credit cards offer cash back, airline miles, and other perk-based rewards which make them attractive to businesses.

Cash back rewards are often based on purchases made in specific categories. For example, if a company regularly spends money on travel, they may want to select a card with a higher bonus rate on travel-related purchases such as hotel stays and airline tickets.

Airline mile rewards are perfect for companies that frequently fly or attend conferences. Such rewards may include free domestic flights or the ability to upgrade to a more comfortable class of tickets.

Additionally, some programs allow for upgrades to hotel rooms, car rentals, and other forms of travel. Rewards programs may also offer gift cards to stores, restaurants, gas stations, and other retailers. Some cards are designed to track the user’s spending patterns and suggest the best rewards that match their needs.

3. Security

Business credit cards offer a variety of benefits, including security. To provide this security, many cards incorporate chip technology, which not only helps guard against fraud but is also accepted by more merchants worldwide.

While the chip provides an extra layer of security, the majority of business credit cards come with additional security features.

This often includes fraud detection, which allows the card issuer to recognize suspicious activity and notify the cardholder.

As a result, if unauthorized purchases are made, the cardholder is able to report the fraud quickly, thereby preventing financial losses.

Additionally, many business creditcards have built-in- consumer protections, such as an extended warranty, purchase protection, and price protection of purchased items.

These consumer protection services help protect the cardholders from potential losses that may be resulting from damaged or stolen items, or from a price drop after purchase. Taken together, these security features offer peace of mind for business credit card holders.

4. Convenience

Business credit cards offer a great deal of convenience for businesses. The application process is quick and easy, allowing businesses to start accepting credit cards almost immediately.

Companies can also set up automatic payments from their banking accounts to their credit cards. This streamlines payment and eliminates the need for manual payments.

Additionally, most business credit cards also offer mobile apps that allow users to manage their accounts on the go.

Finally, costs associated with using a business credit card are typically lower than those associated with using a personal credit card. This not only makes it easier to manage finances, but it allows businesses to save money in the process.

3 Eligibility Requirements For A Business Credit Card

For business owners looking for ways to improve the efficiency of their day-to-day operations, business credit cards can be a great option. Before applying for a business credit card, it is important to understand the eligibility requirements.

In this section, we will discuss the criteria related to credit score, business structure, and annual revenue that must be fulfilled in order to be eligible for a business credit card.

1. Credit Score

In order to be eligible for a business credit card, applicants must provide proof of creditworthiness in the form of a credit score. A credit score is a numerical representation of the applicant’s past financial behavior and reflects credit trends over time.

A good credit score usually indicates that the applicant has a long history of responsibly managing their finances.

The higher the credit score, the more likely the applicant is to be approved for a business credit card. Common credit scores range from 300 to 850, with higher scores indicating better creditworthiness.

Knowing credit scores are important when shopping for business credit cards, as most cards require a minimum credit score to be approved.

Additionally, credit scores can affect which cards the applicant is approved for and at what rate they obtain approval.

2. Business Structure

When it comes to acquiring a business credit card, the company’s structure is an important factor. Business entities must meet certain eligibility requirements established by the card issuer, including verifying the legal structure of the organization.

Companies must typically fall within one of three approved business structures: sole proprietorship, partnership, or corporation. Sole proprietorships are owned by an individual or married couple, while partnerships consist of two or more labor partners.

Corporations are separate entities that are owned, governed, and managed by shareholders, directors, and officers. To verify eligibility, companies must provide documents showing proof of formation and registration, ideally with the Secretary of State.

Proof of identity, such as a driver’s license or passport, must be submitted as well, along with business and personal tax documents. Companies should also have records showing registered trade names and DBA’s, or “Doing Business As” names.

3. Annual Revenue

To become eligible for a business credit card, an organization must provide annual revenue details. The annual revenue must demonstrate an established and profitable business.

Companies must provide information about their annual earnings and the amount of money paid to employees. Revenue and income should be reported accurately to ensure regulations are followed.

Furthermore, rental income and other non-wage sources of money must be listed on the application. Creditors will use the stated annual revenue as a determining factor to decide if the borrower is qualified to receive a business credit card limit.

An organization must keep records of its annual revenue and employment payments for an extended period of time for potential audit requests by creditors.

The term “annual revenues” refers to the amount of money gained from sales, investments, and other business-related interests in a twelve month period.

It is important for the applicant to keep accurate records of their annual income and revenue as this information is crucial for creditors to offer appropriate credit.

3 Application Process For A Business Credit Card

The application process for a business credit card can determine if you are approved and the type of rates, rewards, and benefits you are qualified for. In this section, the application process of Business Credit Cards is explored. This includes the application process for online, paper and phone.

1. Online

A Business Credit Card application process generally features three stages of review, which can be labeled as pre-qualification, application and approval.

In the pre-qualification stage, businesses are asked to answer quick questions to determine if they likely meet the minimum requirements to be approved for a card.

Questions that are typically asked include the type of legal ownership structure, number of employees, personal credit scores and the annual revenue of the business.

Online applications can be submitted on the credit card provider’s website. Upon submission, the application is sent to the issuer for review.

The issuer then reviews personal and business financial documents (bank account statements, tax returns, income statements, etc.) to ascertain whether the business is eligible for the credit limit and annual percentage rate (APR) requested.

If approved, the Business Credit Card will be mailed to the business. One of the most unique aspects of a Business Credit Card application process is the ability for businesses to pursue an expedited approval process by providing detailed financial documents such as balance sheets and income statements.

Lower credit limits can be awarded to businesses who seek credit and do not provide any financial documents.

2. Paper

When applying for business credit cards, papers such as a business plan or financial statements may be required. The papers required depend on the credit card application, but the most important documents are the business plan, income statement, and credit score.

A business plan should include a description of the business, strategies, and a brief explanation of the proposed use of credit.

An income statement serves as proof of current income and should include revenue, expenses, and profitability. Credit scores are confidential numbers that help determine eligibility for certain credit cards, so applicants should ensure that their scores are accurate.

It is also important to have copies of ID, a valid address, and proof of business registration when applying. All documentation submitted should be valid. Proper completion of the application process is a crucial factor in obtaining a business credit card.

3. Phone

Applying for a business credit card is easy, but there are a few considerations to keep in mind. The application process typically includes providing information like the business’s name, address, phone number, and year of incorporation.

On the application, companies also need to provide contact information in case the bank has any questions. Most credit card companies also ask for proof of ownership, such as the driver’s license or passport of the business’s leader.

Some companies may also ask for additional contact details and authorization from the business leader. After providing all the required information, applicants must wait for the credit card company to contact them for verification.

By providing their phone number and other contact details, applicants should expect contact from the credit card company so they can discuss their eligibility and go over any additional requirements.

Associated Fees Related To Business Credit Card

When it comes to selecting a business credit card, it’s important to understand the associated fees. These fees can be divided into annual fees, late payment fees, balance transfer fees, cash advance fees, and penalty fees.

In this article, we will delve into the details of each of these fees and explain the best ways to minimize or avoid them altogether.


When it comes to business credit cards, annual fees are an important consideration. These fees are usually associated with more robust rewards offerings, exclusive access to lounge networks, and enhanced perks.

However, it is important to note that there are corporate credit cards available without annual fees. Free credit cards often do not offer the same perks, but can be beneficial for businesses that don’t need the extra benefits associated with a premium card.

For example, travel and dining rewards are generally not offered, however for low-level business expenses such as office supplies and gas, a free credit card can still save businesses money.

With annual fees, businesses should take a closer look at the extra perks that come with the card to ensure that the cost is in line with the rewards.

Late Payment

Late payments can be detrimental for business owners and can lead to hefty fees. Late payments occur when an invoice is not paid before the due date and can result in a fee from the creditor.

Most credit card companies charge a late fee if the payment is not received by the due date, which is typically given in the form of a penalty or interest rate increase.

Small businesses should ensure that all payments are on time, as late payments can have a negative effect on credit scores.

Moreover, the penalty for late payments can vary depending on the company and may include a fee as well as a higher interest rate.

Late payments can also be reported to the credit bureaus, further damaging the business’s credit score. Businesses should make sure they are aware of all fees associated with late payments and take steps to avoid them.

Balance Transfer

Balance transfers, a common feature of many business credit cards, can be a financially beneficial strategy when managing high-interest debt.

By transferring high-interest debt to a credit card with a lower rate, you can save money in interest payments and reduce the overall amount you owe.

Be sure to read the credit card’s fine print before initiating a balance transfer, as there may be fees associated with the transfer and a limit to how much can be transferred.

Points or miles that you earn with the card may also be awarded when you transfer a balance, giving you an additional benefit beyond lower interest rates.

Keep in mind that, even if you transfer a balance to lower interest rates, it’s still important to make regular minimum payments, as missing payments can lead to late fees and damage your credit.

Therefore, a balance transfer is an important choice that should be made with careful consideration and understanding of the consequences.

Cash Advance

Credit card cash advances come with additional fees, including higher interest rates and additional fees per transaction.

Many credit cards charge both a fee and a high interest rate when a cardholder takes out a cash advance. The interest rate is usually much higher than the purchase APR and can start at the time of the advance.

A cardholder can encounter fees beyond the basic interest rate by taking out a cash advance. To avoid these fees, it is important to understand how the cash advance works.

For instance, some credit cards impose a cash advance fee, also known as a cash advance transaction fee. It is calculated as a flat fee or a percent of the amount of cash withdrawn.

Additionally, credit cards typically have a maximum daily limit for cash advances. Knowing the everyday limit, combined with the cost of the cash advance, can make it easier to avoid fees.

Business Credit Cards – FAQ

What Are The Benefits Of Getting A Business Credit Card?

A business credit card can help businesses better manage their cash flow, track financial activity, and earn rewards points that can be put toward needed business supplies or employee rewards. Additionally, business credit cards offer higher spending limits than personal cards.

Is A Business Credit Card Different From A Personal Credit Card?

Yes, business credit cards are specifically designed to accommodate needs of businesses. They often come with higher spending limits, cash back rewards, low introductory interest rates, and other benefits specifically tailored to businesses.

How Do I Build Business Credit?

To build business credit, start by ensuring your business is set up as a recognized entity, then obtain a business credit card, loan, or line of credit. Paying off these debts on time and as agreed will help build your business credit over time.

Do I Need A Personal Guarantee To Get A Business Credit Card?

That will depend on the lender. Many lenders require personal guarantees for business credit cards, but some may offer secured or unsecured options with no personal guarantee.

Can I Use A Business Credit Card For Personal Purchases?

Yes, you can use a business credit card for personal expenses, but you should be aware of potential risks. Be sure to read the terms of your agreement and keep in mind that the charges you make will impact your business’ credit score.

What Do I Need To Know About Spending Limits?

Spending limits are determined by the lender, and they can help limit your business’ financial exposure and reduce credit card fraud. Make sure to stick to your spending limit, and if you need more credit, you may be able to request an increase.

Want to make an extra $250 per day online?

I've put together a free quiz on how to find the best online opportunity suited for your personality in the next 5 minutes or less that will allow you to work remotely, with a flexible schedule, from anywhere in the world

About the author 

Mike Vestil

Mike Vestil is the author of the Lazy Man's Guide To Living The Good Life. He also has a YouTube channel with over 700,000 subscribers where he talks about personal development and personal finance.

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}