A guide to business credit cards for LLCs
A business credit card, with responsible use, can help manage your LLC’s finances. Plus, it can potentially promote growth while providing other benefits. But you might be wondering whether you need a credit card to support your LLC. And how do you choose a credit card that best meets your needs as an LLC member?
Use this guide to learn more about what a business credit card could do for your company’s growth and financial goals.
Key takeaways
- A business credit card can be used to fund purchases specific to your LLC, keeping your personal and business finances separate.
- When using a business credit card, you can earn rewards on business expenses, monitor employee spending and build your business credit scores.
- To find the best business credit card for your LLC, consider your spending habits, understand the rewards structure and review the terms and conditions.
Advantages of business credit cards for an LLC
Business credit cards are designed to support the unique spending needs of business owners. Here are some of the top benefits:
Keep your business and personal finances separate
When you’re first starting out, you may consider using a personal credit card to fund business purchases. But there are some reasons to consider having a credit card completely designated toward business finances, like:
- Providing a better understanding of your cash flow
- Helping with tracking finances
- Aiding in tax preparation purposes
- Simplifying how you create financial reports
- Making it easier to gather information when applying for grants or loans
Earn rewards and take advantage of other benefits
Business credit cards may offer rewards and other perks, so you can get rewarded for making company purchases. Sign-up offers, cash back and bonus miles that can be used toward travel are just a few examples of benefits you may receive with a business credit card.
Establish or build business credit
When used responsibly, a business credit card can be a tool to establish business credit. A strong business credit profile can make it easier to secure financing with better loan terms and obtain insurance with lower rates. By making on-time payments and paying off the balance in full each month, you can build your LLC’s business credit scores.
Monitor employee spending
If your staff has spending power, you might look for a business credit card that provides free employee cards. Some business card issuers, like Capital One, allow you to set custom employee spending limits—while earning rewards on every purchase they make.
High credit limits
Compared to personal credit cards, business cards often offer higher credit limits. This means you’ll have increased purchasing power, which can come in handy when you need to pay vendors or buy supplies, for example. Some cards, like Capital One’s Venture X Business, don’t have preset spending limits, providing even more flexible spending capacity.
How to choose a business credit card for your LLC
There are a few things to look for when narrowing down business credit cards for your LLC, like:
- Rewards options: Understand the card’s rewards program structure and determine whether it meets the needs of your spending habits. For example, if you travel often, you might consider a card that offers rewards in the form of miles.
- Introductory offers: As you compare options, look into specific card offerings like sign-up bonuses or introductory rewards.
- Terms and conditions: Review the card’s terms and conditions—like the APR or any additional fees that could be charged.
- Annual fee: When reviewing business cards with an annual fee, it’s helpful to weigh the cost of the fee against your spending habits and the rewards and benefits the card offers.
- Additional benefits: Some business cards offer other perks like anniversary bonuses, TSA PreCheck®, a Global Entry statement credit and fraud protection to meet the specific needs of your LLC.
If you’re unsure about getting a business card for your LLC, check out this guide on when you might need a business credit card.
Business credit cards for LLCs FAQ
Here’s more information about getting a business credit card for your LLC:
Can a new LLC get a business credit card?
Yes, you can typically get a business credit card even if you’re just starting out. But you may be required to provide a personal guarantee before your LLC can qualify for a business credit card.
Will my business credit card impact my personal credit score?
If your business’s credit card reports to consumer credit agencies, activity such as payment history and credit utilization ratio can also impact your personal credit scores.
What are the requirements for obtaining a business credit card for an LLC?
You can apply for a business credit card if your LLC operates for profit—even if it’s small in scale or new. When applying for a business credit card for your LLC, you may need the following information:
- Federal tax ID or EIN number
- Business income
- Company information like age of the LLC, number of employees and the type of industry
- LLC contact information like address and phone number (even if it’s a personal address or phone number)
Eligibility criteria can differ from card issuer to card issuer—and card to card. And if you don’t have an established business credit score, issuers may review your personal credit before you can qualify for a business card.
Does your LLC need a business credit card?
As you start to spend money for your LLC, a business credit card can help you separate and track company expenses. Even if your LLC is small or new, you can use features like rewards programs, employee credit cards and high credit limits to manage and grow your business.
Capital One offers a variety of business credit cards to meet different business needs. Explore Capital One’s business card options to find one that works best for your LLC.
