If you own or run a business, you probably have a business credit card. If you have good personal credit, it’s not hard to get a company card, and it’s a great way to keep personal and business expenses far apart.

If you haven’t yet applied for a card for your business, here are some facts to know before starting the process. If you already have a card, they may help you make the best use of it and also maintain good credit for your company. 

1. Eligibility for business credit starts with your personal credit. When you apply for your first company credit card your company doesn’t have a payment history, which the lender could see as a risk.

Lenders know that if your personal credit is messy, chances are your business spending habits will follow a similar pattern, so get your personal credit report cleaned up long before you apply for a company card. If you have high balances on lots of different cards, you may run into problems securing a company card with nothing to back it. At the very least, you’ll probably pay a higher rate than an individual business owner with a clean, sharp credit history and a long history of on-time payments. Clean up personal credit accounts before applying for a company card to improve your chances of success.

2. Business credit cards often come with higher spending limits. Small companies need credit to grow into big companies. Card issuers know this and are more likely to give your business a higher line of credit than your personal line, even though your personal payment history extends for years, while your company history goes back only a few months.

3. You may be liable for payment on company card charges. A lender – a credit card issuer – expects to be paid on time. If you max out the company card buying office furniture, you may not be able to handle your monthly payment using your business credit – especially if you’re just starting out. That doesn’t mean you’re off the hook. Even though it’s a company expense, if the company can’t pay the monthly minimum, the business owner may be responsible for that month’s payment.

Read all terms and conditions before signing up for a company credit card. Business debt may end up in your home mail box – a surprise you don’t need.

With the help of your business banker, you can adjust your company’s monthly payment due date to fit your needs. If your business receives a lot of payments from customers at the end of the month, set your due date for the end of the month to get the most leverage out of your company credit card.

4. Control spending and customize card use. Don’t hand out company credit cards like candy. Work with your business banker to develop a company-wide plan that assigns spending limits to each card-carrying member of your business team. One employee may require a higher spending limit than another. Your business banker can help with the paperwork.

5. Choose a rewards card that delivers loyalty rewards you’ll actually use. If you don’t do a lot of business travelling, extra “fly miles” with each credit card purchase won’t do you as much good as getting 1% cash back on all business purchases. That 1% doesn’t sound like a lot, but it adds up over the months and years. Get the card the offers the rewards you’ll use.

6. Take advantage of card reporting. Make sure to track the credit card spending for yourself and for all personnel who carry company credit cards. Track spending closely with itemized statements. This saves time when balancing the books or filing taxes.

Once again, talk to your business banker about different rates and terms. Know what you’re signing on for and what your personal liabilities may be in the event of a catastrophic loss. 

When first navigating the business path you’ve chosen, work with a bank that delivers more than services. Work with a bank that solves business problems.

To discover more about how your business bank helps your company grow, please drop by any branch of Nevada State Bank to discuss your business needs and how Nevada State Bank can help you reach your business goals.


The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of ZB, N.A.