What is a business credit card?

A business credit card isn’t much different from the personal credit cards you probably have in your wallet at this very moment. It functions in the same way, offering on-demand funding and flexibility for large or small, long-term or short-term purchases. You can leverage it to provide or preserve cash. The primary difference is that a business credit card can only be used for business purchases - hence, the name.

Business credit cards are extremely versatile. You can use them to purchase equipment, boost inventory, or to cover monthly costs. And if you have an excellent credit score, you can often get a low introductory rate and enjoy a rewards program that brings extra perks. Basically, you’ll get much of the similar utility of a loan with a lot less paperwork and commitment.

If you’ve been in business for at least a couple years, you’ll be in great shape to qualify for a card. And if you’re a startup, that’s okay - you can still qualify for a business credit card, but you may need to personally guarantee it because there won’t be much business history to draw on in the qualification process. If you’ve got a credit score of 680 or higher, you’re probably sitting pretty.

One thing to note is that business credit cards typically come with higher interest than a traditional loan, and can’t offer as high of an approval amount as larger loans. But if you’re struggling to find funding for your business, it’s a fantastic way to get some reliable and fast working capital.