There can be many benefits to using a small business credit card, from streamlining expenses to earning rewards. But you may wonder who qualifies as a business owner?
Below, CNBC Select reviews who can apply for business credit cards, how to complete an application and how your personal credit is affected.
As the name hints, you need to operate a business in order to apply for a business credit card. However, card issuers have pretty lenient requirements when it comes to defining a business. If you tutor in your spare time, freelance or resell products, you'll likely qualify as a business owner.
If your business is new and doesn't have a credit history yet, you can still apply. Many banks review your personal credit report in addition to your business credit report (when available).
Once you choose the best business credit card for your needs, you can start the application process. Applying for a business credit card isn't that different from applying for a personal credit card. You'll still be required to enter contact information, revenue and other details.
Here's what to expect on a business credit card application:
When you open a business credit card, your personal credit will typically be reviewed by the card issuer, resulting in a hard inquiry on your personal credit report. This often causes your personal credit score to drop a few points, but it can bounce back in a few months with responsible card use. (Learn how to check your business credit score for free.)
When you use a business card, the actions you take with your card may be reflected on your personal credit report. That means any balances and payment history can affect your personal credit. Some card issuers only report negative information to personal credit bureaus, while others may report both the good and the bad.
You should always use your business credit card responsibly, with a plan to pay it off on time and in full each month, so you avoid damaging your personal credit.
Learn more: Amex Business Platinum Card review