Corporate Credit Card: Definition, How It Works, Types, and Benefits

business credit card definition

The better your credit rating is, the more likely you are to qualify for the lowest interest rates on loans and vendor financing. “One of the nice things about a personal loan is that it’s one of the simplest financial products,” Ibo Dusi, chief operating officer of Payoff by Happy Money, told Insider. Your business credit card is more than just a piece of plastic to buy supplies with! If you use it properly it will help you build a solid financial foundation for your business. To generate a business credit report from Dun & Bradstreet, you’ll need to register with the agency.

Another major perk is that, depending on the employer, cardholders may get to keep any rewards they earn while using a corporate credit card. They may, for example, be able to earn and redeem rewards for an airline’s frequent flier program or a hotel’s frequent guest program. Of course, the employer may decide to keep the rewards for its own purposes.

Being Watchful of Card Activity

Without a good system in place, it can be difficult to keep track of—and keep a handle on—credit card spending, which ultimately affects your bottom line. Certain strategies can be utilized to ensure good credit card practices. The credit card company is looking for a broad category, like delivery, retail, or food service. If you have a limited business credit card definition liability company or corporation, you probably have an Employer Identification Number. If you’re a solo operation, your personal social security number is sufficient. Even if you do pay the minimum, your rest of your outstanding balance will remain and carry over to the next month, accruing interest the more you don’t pay it off.

Our partners cannot pay us to guarantee favorable reviews of their products or services. We believe everyone should be able to make financial decisions with confidence. If you’re ready to establish business credit, it helps to know where to start. You’ll need to complete the contact form on the Equifax website for more information. The lender you choose will probably ask you to provide documents such as pay stubs, bank statements, W-2s, and employer contact information to verify your identity and listed finances. Once you’ve done your homework and compared rates, term lengths, and fees, it’s time to make a decision.

Cobranded Cards

These editors thoroughly edit and fact-check the content, ensuring that the information is accurate, authoritative and helpful to our audience. If you’re not an LLC, you can still apply using your employer identification number (EIN) or your social security number. The material made available for you on this website is for informational purposes only and is not intended to provide legal, tax or financial advice. If you have questions, please consult your own professional legal, tax and financial advisors.

  • These cards tend to offer higher lines of credit and lower interest rates vs. secured cards.
  • Here’s more detail about how to apply for and get a business credit card.
  • Similar to a secured credit card, a prepaid debit card is a type of secured payment card, where the available funds match the money that someone already has parked in a linked bank account.
  • Likewise, being able to purchase supplies or obtain vendor services on credit can make it easier to manage your business cash flow.
  • The business card application will ask for information related to the business itself, including name of business, industry, employer identification number (if applicable) and revenue.
  • Nonetheless, it’s a good idea to double check with your secretary of state to confirm you’ve completed all of the necessary business registration requirements.

They also include business-centric tools to track spending in various categories or by employee. Oftentimes, expense information can be downloaded and easily imported into your business accounting software. You can apply for a business credit card with or without having an employer identification number (EIN), sometimes also referred to as a tax ID number – a kind of Social Security number for your business. Some may also offer travel perks such as access to airport lounges or discounts on hotels. Such cash advances typically have different terms, such as no grace period and higher interest rates, compared with those transactions that access the main credit line.