Having a good business credit history can also make it easier to get approved for credit lines through your vendors and suppliers. A business credit report is generated with a credit score based on payment history, debts, and credit utilization, as well as general information about the business and information available in public records. Vendor accounts, sometimes called net-30 accounts, let your company pay for products and services after you’ve purchased them. However, net-90, net-60, and even net-15 terms may be offered by certain companies instead. Rewards programs can be simple, especially if you stick with a business credit card that offers a flat rate. But if you decide you want to maximize how much cash back, points or miles you earn, things can sometimes get a bit complicated.

• Michelle Lambright Black, Founder of CreditWriter.com and HerCreditMatters.com, is a leading credit expert with over a decade and a half of experience in the credit industry.
• For example, some business credit cards provide cash back on purchases at stores that businesses are likely to frequent, such as office supply stores.
• The owner of a small business might use a business credit card to sign up for a monthly expense, such as a software license, that they know they will be able to pay off over time.
• They’re a tool for understanding what you may qualify for without committing to a loan.
• Check the data at the top of this page and the bank’s website for the most current information.
• Remember to get your business phone number listed in your local directory as well.

It’s important to keep in mind that each of these companies may collect and organize information about business credit in different ways. If you’re facing a large expense but don’t have the savings to cover it, a personal loan can help. Personal loans come with lower rates than credit cards, and you can use the funds for just about any purpose. Depending on the type of corporate credit card, either the employee or the employer may be responsible for paying the credit card bill. Understanding how to build your business credit early on can help provide more options for financial assistance. It can also make it easier to separate your business’s credit and financial obligations from your own personal credit.

Benefits of business credit cards

Prequalification offers are based on preliminary assessments and are fairly accurate, but your final terms may vary slightly after a full credit review. For example, some personal loans come with origination fees which can cost between 1% to 5% of the total loan amount. That means a $20,000 loan could come with business credit card definition an origination fee between $200 and $1,000. Finally, you need to figure out how much you can realistically afford to borrow and repay each month. That way, you don’t end up applying for a personal loan that you can’t afford. Prequalification lets you explore different loan options without hurting your credit.

Other factors, such as our proprietary website’s rules and the likelihood of applicants’ credit approval also impact how and where products appear on the site. Each month you’ll receive a statement from your issuer, which includes a transaction history, your statement balance and a minimum payment amount required. You are required to pay the minimum or else your payment will be recorded as late. After 30 days, it’ll be reported to the credit bureaus and will begin to affect your credit score. If you would like to check your business credit profile and credit scores, you have a few options.

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Travel perks are another common benefit, since many businesses have significant travel expenses. A business credit card might entitle the holder to use an airline’s VIP lounge at airports or receive discounts on hotel stays during business trips. If you’re a small-business owner or an employee looking to augment your company’s savings, a business card is worth looking into. With higher credit limits and business-specific perks, the right card can help your business make a significant dent in its next expenditures report. Business credit serves a similar function to personal credit, in that it can help you to qualify for loans or lines of credit when you need to borrow.

You’ll need to remember which categories earn the highest rates along with other terms and conditions. It helps to know your credit score before applying for a business credit card since it will have to match the requirements of the card you want to get. But some, like the Bank of America® Business Advantage Unlimited Cash Rewards Mastercard® credit card, will require excellent credit. Before you apply for a business credit card, you’ll need to do some research to find the right business credit card for you.