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5 Questions to Ask Yourself before Applying for a Business Credit Card

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Unless you've prepared and saved for years, as a startup, you're going to require funding in order to get your business off the ground and running. While there are loans and grants that you could apply for, a top option for newer companies is a business credit card. These cards tend to have lower eligibility requirements and more affordable terms. In fact, more than 30% of business owners have used a credit card within the last year.

While you may be eager to apply for a business credit card, there are questions you'll want to ask (and answer!), to ensure that you're making the best financial decision for your company. Here are 5 questions you’ll want to consider before you apply for a business credit card.

1. Why a Credit Card?

Before you go online and submit a bunch of credit card applications or spend hours researching credit card options on Fundera, take a step back and figure out what your motivations are for applying. The reason you need a credit card will ultimately determine which type of credit card is best.

For example, if you're looking to carry a balance on the card, you'll want to find one that offers a low interest rate and a low or no annual fee. Or if you're looking to use the card for business travel or equipment purchases, choose one that offers cash back or point-based rewards. Getting rewarded for your business expenses is an effortless way to save money.

2. How Much Do I Need?

Knowing how big of a credit line you need is important, especially if you plan to make a big one time purchase. Take time to crunch numbers to determine how big of a line of credit you need to fund your business expenses. At the same time, you’ll also want to determine how much you can afford to pay back each month. Making only the minimum monthly payment doesn’t do much for your credit standing. Minimum payments also mean that you’ll pay much more towards interest.

Unsure of how much you can afford? There are all sorts of online tools you can use to do the math for you including a business line of credit calculator.

3. What's My Credit Standing?

Your credit standing plays a huge role in determining your line of credit as well as your set interest rate. If you have a bad credit score or no credit, getting approved for a credit card is much harder. Most credit card lenders look for nothing less than a fair credit score.

Remember that lenders will not only look at your business credit worthiness but also your personal credit worthiness. Lenders will look for low debt, consistent income, on-time payments, and a solid credit standing.

Unsure where you stand credit wise? You can view your credit report for free once a year. There are also credit monitoring apps, such as Credit Karma, that allow you to keep tabs on your score. To boost your credit standing:

  • Pay off debt if possible
  • Pay more than the minimum
  • Avoid opening new accounts
  • Keep old accounts open
  • Check for credit discrepancies

Taking charge of your credit is a good way to boost your chances of getting approved for a business credit card with terms you agree with.

4. How Soon Do I Need the Money?

Knowing how quickly you need access to your line of credit can drive which lender you work with. If you need money quickly, an online lender may be the ideal way to go. These lenders can often process and approve a business credit card in less than a week. Traditional banks sometimes have a longer application and underwriting process which can take a few weeks to complete.

5. What Are The Perks?

All credit cards offer some sort of perk. Some offer low interest rates and no annual fee while others put heavy focus on cash back rewards. When you’re researching and comparing business credit cards, take a close look at the rewards that are available.

Does your San Francisco SEO marketing company use air travel often? If so, a card with airline mile perks makes sense. If you tend to travel locally, these perks won't be very beneficial. Looking to buy new IT equipment for your software hardening company? Find a card that offers cash back on equipment purchases.

Make note of your business purchasing habits and put them to good use with the right credit card rewards.


Knowing you need funding for your small business is the first step, but figuring out the best source is most important. Business credit cards are a top option for startups and small companies who need capital to get started on their path to success. If you are looking for a business credit card, what options have you considered? What perks and features are important to you when selecting a business credit card? Leave us a comment with your thoughts in the section below.

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