How To: Select a Business Credit Card |

Build Your Infrastructure: Step 1

How To: Select a Business Credit Card

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Using a business credit card gives business owners significant advantages over using their personal credit cards.

The main advantages of having a business credit card over a personal credit card are:

  • Keep personal and business expenses separate. This is essential during tax season since you may write off business expenses. If you put all of your business purchases on a single credit card account, this information will always be contained in one easy-to-find place. 
  • Simplify expense billing. Using one business credit card for all of your expenses will make paying off the array of business purchases very easy.
  • Get multiple cards under one business account. Getting several cards for you and your employees allows you to set different spending limits and pinpoint each employee’s expenses.
  • Receive better customer service. Businesses typically spend more on their cards than average people spend on personal cards. As a result, credit card companies often provide better customer service to businesses.
  • Pay lower annual fees. American Express, for example, has an annual fee of $175 on its personal Premier Rewards Gold Card but only a $95 annual fee on the Business Green Rewards Card. 

Before you select a business credit card, you should:

Make sure you have the information required to apply.

Before you go through the entire process of selecting a business credit card, it is important that you have all of the information necessary to submit an application. The vast majority of business credit cards, although attached to your company's credit, will also need you to personally guarantee the account. Most business credit cards will require an excellent personal credit rating.

The personal information that is required to apply for a business credit card includes:

  • Your Name
  • Your Personal Address
  • Phone Number
  • Date of Birth
  • Social Security Number
  • Total Household Income

The business information that is required to apply for a business credit card includes:

Decide which type of card you need.Compare Credit Cards for Small Business

When researching different cards for your business, you can easily get confused by the way the terms “credit card” and “charge card” are used seemingly interchangeably. There are distinct differences between the card types:

Credit Card

  • Allows you to carry a balance from month to month
  • Only requirement is minimum monthly payments (this is usually a small percentage of your total balance)
  • Card balance is charged a fixed or variable interest rate (APR)
  • Flexible payment options
  • Usually no annual fee

Charge Card

  • Cannot carry a balance from month to month without incurring high penalties
  • No interest charges
  • Inflexible payment options
  • Annual fees apply

Decide which features you care about the most.

The important business credit card features relate directly to which kind of card you have and how you plan on paying off your balance.

Regular APR

The annual percentage rate, or interest rate, should be the most important factor in your credit card decision if you plan on keeping a monthly balance.

  • Introductory APR Discounts– Not just the discounted rate, but the length of time this rate lasts.
  • Fixed vs. Variable Regular APR – Fixed is preferred for most people carrying a balance on a credit card since this means your interest rate won't change, but variable rates can be beneficial too as long as you understand the range on which your interest rate can vary.
  • Balance Transfers – If you plan on transferring a balance from a current credit card onto a new one to take advantage of the Intro APR discount, make sure the card will allow you to transfer a balance in the first place.


Reward programs are beneficial if you plan on paying off the entire balance each month (or at least keeping a very low balance), making the interest rate of little concern. Types of Rewards Include:

  • Cash Back
  • Airline Miles
  • Other Travel Rewards (Hotels, Car Rentals, etc.)
  • Vendor-Specific rewards

Airline miles and other travel rewards are most beneficial to businesses with a lot of travel expenses. These types of reward cards usually give more points when you use it for travel expenses such as plane tickets, car rentals, and fuel. While cash back rewards are obviously more beneficial for those businesses that do not have many travel expenses, some cards have cash back reward schedules that increase when purchasing from certain vendors.

Annual Fees

Annual fees are mainly related to business charge cards, although a few business credit cards charge them as well. The annual fee of a card is important to consider since the fee may lower your interest rate or increase the amount of rewards you’ll receive. Although this might not be the most important feature when comparing credit cards, the benefits (or lack thereof) of paying an annual fee could be used as a tie-breaker between two similar cards. Most business credit cards will waive your first annual fee when you sign up.


Penalties are always important when comparing credit cards, especially for those opting for a charge card. On charge cards, penalties are assessed every month that you fail to pay the balance in full. Not only do some charge cards have monetary penalties for not paying your balance, some will even suspend your account for non-payment. With credit cards, however, penalties are charged only if you pay anything less than the monthly minimum payment or do not make the minimum payment on time.

Tip: The time it takes to get approved for your credit card account varies. Some cards offer instant approval, while others might make you wait a few weeks. In general, the better your credit rating, the faster the response time for a credit card application.

Friendly Tips

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  • Do your research. Many banks and credit card companies offer attractive perks that may meet your specific business needs. Research offers from both local banks and national credit card companies.
  • Lay the ground rules. Make sure your employees know exactly what can and cannot be charged on the credit card. Some cards will let you adjust the credit limit on individual employee's cards, as well as limit where the card can be used.

Fair Warnings

  • Don’t get burned by special offers. There are many offers and plans available for small business owners, but pay close attention to business credit card plans with introductory offers for 0% APR. While this may be an option for an immediate, high-end purchase to support your business, research the conditions under which the rate will rise later, as well as your options if it does. Beware of getting stuck with a high APR after the introductory period.