Business Credit Cards Frequently Asked Questions
What is a business credit card?
Business credit cards provide a lot of the same features of traditional credit cards but they are usually targeted towards businesses and executives. They can include low interest rates, cash back rewards, discounts and travel rewards to name a few, in addition to a host of other features that are not included with traditional credit cards. Some of the "extras" provided by a business credit card include expense reports, no cost extra cards for employees, higher credit limits, business rewards and the ability to separate business expenses from personal expense.
Who can apply?
The owner or an officer authorized to act on behalf of the owner of the business can apply for the business credit card.
What do I need to supply with my application?
You will need to provide the applicant's name, the legal business name, address, phone number, fax number, Social security number for yourself and other cardholders that you designate, Tax ID Numner or Employee ID Number and some information on the business profits. Take note that the lender will pull a business credit report and might also pull the personal credit history of the business officer. To speed up the application process, it will be helpful to have several items on hand.
What is meant by Tax ID Number (TIN) or Employer ID Number (EIN)?
In order to be tax compliant U.S. businesses are required to have this nine digit number that is issued by the IRS. It is similar to your personal social security number but meant for businesses.
Does it make sense to apply for a credit card for my business?
If you have been in business long enough you will realize that you need to build your business credit if you hope to succeed especially since you may not be in a position to fund all your business activities on your own. There are even credit bureaus that are established just for the collection and disbursing of business credit history. If your business has no credit lenders will have to rely on the personal credit of the business owner in order to determine whether to issue a credit card or loan. When this happens you are personally liable. Use a credit card to help your business build a positive credit history among other things.
Will I be held personally liable for the business credit card?
A lot of lenders do hold the business owner personally liable for any debt placed on the business credit card. The Social Security Number and the Tax ID, or Employer Identification Number (EIN) that you submit with the application accounts for this and your personal credit report is checked along with the application for the card. Take note that although you might be held liable the business credit card will not show up on your personal credit report. A credit check is done to verify your identify and sometimes even to determine if credit should be extended to you.
Can I submit my application for the business credit card online?
It is possible to submit your application online in a secure environment. You can even compare the available cards online and choose the one that is best for you. Submitting your application online moves the process of application and approval along at a much faster pace.
Do I have to pay an annual fee for a business card?
The majority of business credit cards do have an annual fee but it is possible to find some without an annual fee. Do not dismiss a card because it has an annual fee because sometimes the rewards and benefits offered far outweigh what you would pay for an annual fee.
Can I get my business name on the credit card?
The business name is usually inserted just below the name of the individual cardholder name on every requested card.
How long does it take to get word on the status of my application?
This varies from one provider to the next and also depends on how much information is provided. If the lender needs further clarification or data from you before making a decision they will contact you. This can delay the process so it is important to provide all the information requested when you submit the application. Other than that the application can be processes and approved and your card delivered in 7-10 business days.
Will I get an introductory annual percentage rate (APR)?
Some business credit cards offer an introductory APR that run for several months to one year. Others do not have any sort of low interest introductory offer. Still there are others that offer a low interest rate that runs for the life of the account as long as the cardholder abides by the terms and conditions. Take note that some introductory offer will be immediately be terminated if you violate the terms and conditions like make a single late payment.
Is there a limit on the number of cards that I can request for my company?
If you need to get additional cards for your employees you should look for a provider who will provide this for you with no hassles and no additional costs.
What can I do to protect my business credit card account?
Some lenders provide business card security as an extra service so that you are protected in the event of accidental death, identity theft, hospitalization or temporary interruptions to your business activities. If you plan to issue extra cards to employees protect your account by setting policies for card usage, establishing predetermined limits for employees and closely monitoring purchases on the account. Work with your lender to find out what options are available for setting limits on and monitoring account activities.
What about credit card fraud?
Business credit cards come with a lot of the same protections against fraud as traditional credit cards and in some cases even more than what is offered with traditional cards. You can discuss with your provider options for fraud monitoring, security codes, purchase protection, security layers and extended protection.
Will I receive rewards for my purchases?
This all depends on the type of card that you apply for. Some business credit cards do not have a built in rewards programs and this might not be a bad thing if you are privy to great benefits and a low interest rate. A lot of business rewards credit cards come with interest rates that are higher than the norm. If you can benefit from the rewards then by all means proceed with them. Some rewards that are available include cash back rewards, hotel rewards, dining rewards, discounts on business supplies, travel rewards, gas rewards and even concierge services. The rewards you chose should all depend on the nature of your business and how you can put it to good use to save on your business expenses. Choose a provider who makes it easy to redeem rewards because if you are forced to jump through hoops to get your benefits the card would not be worth the hassle. Finally if you go with a reward card you should ideally aim to pay off your balance monthly to avoid high interest rates which will in effect cancel your rewards. If you are unable to do so then you might want to consider a non-reward card with a low interest rate.
If you have any other questions, please contact us. Or you can read more about business credit cards in our articles section.
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