Nowadays, having a business credit card is essential since it can be an ideal way to build a good credit standing for your company. However, the entire application process isn’t just about filling out a form and clicking the “submit” button. It’s about doing some careful research to get the right one for your business needs.
So, here are some key tips you should consider when applying for a business credit card.
What is a Business Credit Card?
As defined, a business credit card refers to a credit card that’s used for business purposes. It’s
typically available for all types of businesses, whether it’s big or small. It’s also offered by several lending institutions to help companies build their credit standing and have better credit borrowing terms in the future.
Opening for a business credit card follows an application process similar to that of a standard credit card application. Also, most common credit cards for companies may or may require an employer identification number. Therefore, no doubt that the process of applying is much easier for businesses of all sizes.
Below are the benefits you can get when using a business credit card:
– It offers business perks and other rewards, which may include discounts for business trips.
– It provides a business credit separate and distinct from your personal credit rating, making it easy for you to identify business and individual transactions when paying taxes.
– It comes with a higher credit limit, which allows you to make significant business purchases.
Now that you know the general perks of owning a business credit card, it’s time to shop around for the best one. For example, if you’re running a Canada-based business, there are many great credit cards in Canada to choose from.
Tips To Consider When Applying For A Business Credit Card
As mentioned, applying for a business credit card is relatively easy if you know what to do right from the very beginning. Just like the regular credit card application, there may be a possibility that your business will not be granted a credit card, depending on the circumstances. That said, it’s extremely important to be prepared when applying for a credit card.
Below are the essential tips to keep in mind when you want to take out a business credit card:
Be Prepared To Provide Basic Information
Applying for a business credit card requires you to gather information necessary for your application. Thus, be ready to provide essential information about your personal life and your business. For instance, the typical information you’ll be asked include:
– Personal and business name
– Personal and business address
– Type of business
– Tax Identification Number, if you have one
– Years in the business
– Annual business income
– Monthly business expenses
– Yearly personal income
By getting all of this information ready, you may be able to streamline the application process. But, in case you won’t get a response from your lender right away, it can mean that your application documents are subject to review.
Know The Eligibility Requirements of the Card You’d like to Consider
Before filling out an application form, it’s a wise idea to understand the eligibility requirements of the credit card you want to consider. In short, you should be familiar with the credit score requirements of the card so you’ll not get denied over and over again.
Remember, multiple credit card applications that keep on getting rejected can affect your personal credit scores. If you don’t want this to happen, determine if you’re eligible for the card you select.
Check Your Personal Credit Score
Another tip when applying for a business credit card is to ensure you have an excellent personal credit score. In most cases, lenders will take a look at your credit score and at the same time, consider the revenue and the monthly expenses of your business. Having a poor credit score can reduce your chances of getting a credit card application approval. That’s why you should rebuild your credit score before deciding to apply for a business credit card.
On the other hand, you don’t necessarily have to establish a business credit score beforehand for you to qualify for a credit card. If you want to get approved for a business credit card, you should have a minimum personal credit score of 640. You can also go for a higher credit score if you’re looking for the best rates and rewards.
Research Your Available Card Options
Ideally, you can use a credit card to grow your business. That said, it’s essential to consider your business needs before getting a business credit card. So, find time to research the best card option that will work for your company. Be sure to choose a business credit card that offers reasonable annual percentage rates, fees, and rewards. That way, you’ll be able to get the most out of the card perks once you get approved.
Final Thoughts
Knowing how to apply for a business credit card is typically a seamless process, but improving your chances of getting approved for a credit line requires a lot of considerations. Following the tips mentioned above will most likely bolster your possibility of getting a business credit card without trouble. Remember, lenders will not hesitate to give their approval so long as you comply with the minimum qualification requirements.