For many small-business owners, a business credit card is a smart and effective way to help manage your business-related expenses.
With the right card, you gain numerous advantages beyond the convenience of having an extended line of credit. With responsible use, you can build your business credit history. You may also be able to earn rewards, receive free employee cards and get access to expense management software.
When you're ready to apply for a business credit card, the process won't be the same as applying for a personal credit card. In addition to some personal information, you'll also need to provide several business-related details. This includes how long you've been in business, your annual business revenue and the number of employees.
You'll also be asked to provide your business name. This can be your personal name or your legal business name if you have one.
Not sure which one to use? Keep reading to learn more and to help you decide what name to put on your business credit card.
Why you might want a business credit card
There are plenty of reasons to apply for a business credit card — the simplest being that you have an established business and are looking for a way to organize your expenses better.
Even if you don't need a business card, you might want one to help separate your work expenses from personal ones. It can also prevent your spending balances from being reported on your personal credit report. This can keep your credit utilization low on your personal credit report and thus help you maintain a higher credit score.
Or, maybe you want to earn some nice sign-up bonuses without affecting your eligibility for future personal credit card applications and avoiding restrictions such as Chase's 5/24 rule.
Related: Credit utilization ratio: What it is and how it affects your credit score
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What name should you apply with for a business credit card?
The specific answer to this question will depend on your business's structure. Banks allow you to specify whether you are applying as a partnership, a type of corporation, or a sole proprietorship, among other options. Some card issuers, such as Citi, will give you an overwhelming number of choices. Larger companies or those registered as corporations, LLCs, or partnerships will have an easier time deciding what name to use, as they will simply apply with the business's name.
Things get a little more complicated if you're just a sole proprietor.
Related: Who qualifies for a business credit card?
If you aren't 100% sure of the business structure you should select, speak with a lawyer or tax professional. Many points enthusiasts will be applying as sole proprietors or self-employed for things like:
- DoorDash or Uber driver
- Rover petsitter
- Freelance writer
- Babysitter
Applying as a sole proprietor can be a great option because you don't need to file any paperwork with your state or federal government to form one – you establish a sole proprietorship simply by doing business. If you go this hassle-free route, you'll apply for business credit cards using your own name.
Some banks (especially Chase) like to ask for supporting documentation before approving a business card application, including proof of physical address. By using your name as the business name, you can submit rent or utility bills consistent with the information you gave on your application.
How to get a credit card in your business name
Branding is half the battle in attracting customers, though, and maybe you don't want to call your new consulting firm just by your own name. If your business is operating under a name other than your legal name, you must file a doing business as (DBA) form.
The specific regulations on this (who/where/when/what you need to file) vary by state. Again, you should consult a legal professional before proceeding. This is a necessary step before you can open a bank account or line of credit under your business name.
In many ways, this is a warning about what not to do: never, under any circ*mstances, make up a business name for your application without filling out the necessary paperwork first.
Not only will you have no recourse if a card issuer asks you for supporting business documentation, but you'd also be committing fraud by passing yourself off as a business that doesn't exist. The simple and short answer for most business owners looking to apply for business cards is to use your own name and keep things simple and legal.
Related: The ultimate guide to credit card application restrictions
Bottom line
Business credit cards can be a great way to enjoy even more sign-up bonuses, bonus spending categories and other valuable perks. If you qualify for business credit cards, remember that these applications often face slightly more intense scrutiny than personal credit card applications.
Always be prepared to present your business registration certificate or other relevant documents if needed. If in doubt, consult a legal professional, and if applying as a sole proprietorship, think about just using your own name as your business name.
Related: The best business cards
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.
