Must you get a small enterprise bank card?
Business cards

Must you get a small enterprise bank card?

Must you get a small enterprise bank card?

/ Getty Photographs

Should you’re beginning your personal small enterprise or already function one and wish to maintain work purchases separate out of your private spending, you may wish to think about making use of for a enterprise bank card.

Enterprise bank cards typically provide higher perks versus private playing cards like reductions, airline miles or greater cash-back percentages, consultants say. Some even provide enterprise counseling for patrons. 

You do not should be a giant firm to use. Many startups, sole proprietors and small LLCs use enterprise bank cards. It doesn’t matter what your small enterprise construction, it is price contemplating whether or not to get a separate enterprise bank card. 

Here is some info on the way to get began.

What’s a enterprise bank card?

A enterprise bank card is very like your private bank card, however comes with extra choices tailor-made to any measurement enterprise, says Danielle Harrison, a licensed monetary planner and founding father of Harrison Monetary Planning in Columbia, Missouri. There are various causes it’s your decision one in your small enterprise.

“You may have licensed customers, and sometimes set totally different parameters in your workers,” Harrison defined. “For instance, you might say that in a month your workers can solely spend as much as $500. It permits you extra management than what a private bank card would.”

What’s the objective of a enterprise bank card?

A enterprise bank card may also help you retain observe of bills, pay for on a regular basis firm wants and provide the likelihood to build up extra perks than a private card sometimes gives. It will possibly additionally assist maintain your small business operations separate from private funds.

Listed here are another causes to use for a small enterprise bank card:

  • You wish to maintain your small business and private funds separate
  • You journey regularly for enterprise
  • You are all for getting higher perks 
  • You wish to concern playing cards to workers
  • You wish to maintain observe of most day-to-day enterprise bills

You should utilize a daily bank card for a small enterprise in some instances. For instance, if you happen to’re a sole proprietor or freelancer that does not intend to develop, a enterprise card may not make sense. 

The best way to qualify for a small enterprise bank card?

Most small companies can qualify for a small enterprise bank card. That features sole proprietor, an LLC, partnership, and totally different company sorts.

Even in case you have a side-hustle or passive earnings on prime of your common job, you might wish to think about making use of for a enterprise bank card.

Enterprise bank card issuers might look at your private earnings and property or that of a household or companion, particularly if you happen to’re simply beginning out, Harrison notes. 

How does a enterprise bank card work?

Enterprise bank cards work very like private bank cards. You should utilize the cardboard for bills, provides, contractors and different wants. 

Consultants suggest paying off the cardboard month-to-month if doable. That is as a result of rates of interest are often within the double-digits – a lot larger than small enterprise loans.

“The very first thing to consider is how a lot of a steadiness is absolutely prudent to hold if you cannot pay it off instantly,” famous Blaine Thiederman, an authorized monetary planner and founding father of Progress Wealth Administration close to Denver. “If you wish to attempt to develop your small business as quick as doable, you possibly can’t simply throw debt on the wall and hope that you just make good choices.”

Should you want longer-term credit score, think about a small enterprise mortgage over a number of years that provides decrease curiosity, Thiederman prompt.

Do you want an EIN for a enterprise bank card? 

Usually, you will wish to get an Employer Identification Quantity or EIN. That retains your small business operations separate out of your social safety quantity and private funds for tax and different functions.

Execs and cons

Listed here are some execs and cons to think about when interested by enterprise bank cards:


  • Enterprise and private funds are separate with totally different IRS identifiers 
  • You may concern playing cards to workers
  • A enterprise bank card offers you a simple strategy to observe bills
  • Usually, perks like money again and journey rewards are higher than private playing cards


  • You probably have financing wants, bank card rates of interest are sometimes a lot larger than different kinds of debt financing
  • Should you’re simply beginning a small enterprise, you might have to co-sign for a enterprise bank card, placing your private financial savings and property in danger
  • It is simple to rack up debt rapidly on a bank card

What number of bank cards are too many bank cards?

It is dependent upon the earnings your small business is producing.

“It is about your earnings, it is about your gross sales as a enterprise, It is about what you possibly can afford. It is about what’s prudent and accountable,” Thiederman mentioned.

“You probably have three or 4 totally different bank cards as a enterprise proprietor, and also you’re maxing all of them out? In all probability not a very good choice. You probably have three or 4 bank cards, and also you pay all of them off on the finish of each month earlier than curiosity accrues, it means you in all probability are doing simply fantastic,” Thiederman added.

Do enterprise bank cards examine private credit score?

Usually, sure, particularly if your small business is not but well-established.

“Enterprise bank cards will typically depend on the proprietor’s credit score historical past,” Harrison mentioned. “People suppose, ‘Oh, I can get a enterprise bank card, they usually’re not taking a look at all my private info,’ however they’re.”

That is as a result of enterprise card issuers in the end look to you, the proprietor, to ensure or pay money owed. Plus, homeowners are chargeable for workers who’re licensed customers of the enterprise bank card, Harrison notes.