What are the requirements for obtaining a business credit card?

Business credit cards, or as they are well-known as corporate credit cards, are a type of specialized payment card. What makes them stand out is that they are not given to individuals but to companies. With the help of these cards, firms can meet a host of requirements. This list includes traveling for work, paying for the team lunch, buying office accessories, etc.

Now, these credit cards work as regular ones. You can use them to establish business credit which can be beneficial when requesting any business loan or other financing options.

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Eligibility requirements for business credit card

The requirements for applying for a business credit card may vary depending on the lender, and your application can be turned down if you don’t match the lender’s conditions. You must fulfil a few fundamental requirements for your credit card application to be sanctioned. These are listed below:

The candidate must be a citizen of India.
The minimum age requirement is 21.
A self-employed professional, a business owner on their own, or a partner in a partnership corporation qualifies as the candidate.
The candidate must possess a reliable credit history.

Documents required for business credit card

The following papers must be submitted to be approved for a business credit card:

ID proof (Aadhar card, voter ID card, PAN card, driving licence, etc.)
Address proof (Utility bills, passport, Aadhar card, etc.)
Business registration details, company GST number, company PAN card, etc.
Bank account statement

Apart from these, you need to submit income records to be eligible for a business credit card. The financial records that serve as evidence of income for business credit cards include the following –

Copy of the last two years’ IT returns, as well as the most recent balance sheet and profit and loss statement, both audited by a licenced chartered accountant, are required for self-employed individuals (including partnerships and corporations).

Apart from this tentative list, you need to submit any additional papers that the credit card issuer may ask for.

How does a business credit card work?

Personal and business credit cards work in the same ways. Purchases are made using your card, and at the end of every billing period, you get a statement that includes your total balance owed and the minimum payment due.

Like personal credit cards, business credit cards have varying interest rates; the more creditworthy your business is, the more chances you have to receive a favourable one. However, business credit cards should only be used for business-related transactions, not personal expenditures.

What are the advantages of business credit cards to your firm?

Owners of businesses may keep track of spending and regulate daily operations with the help of a business credit card. It also simplifies the task of keeping personal and business expenses apart. Also, it provides a quick line of credit, which is particularly useful for small business owners who would need more funding to launch a new initiative. Rising cash flow can also be leveraged to pay for varying inventories, seasonal costs, and unforeseen expenses. These are loaded with exciting features that make running your business and managing funds easier.

How to make an online application for business credit cards?

To apply online for a business credit card, proceed as follows:

Step 1: First, apply for a credit card on the official website or mobile application of the desired credit card issuer. Provide your name, email, contact information, annual income, and mailing address.

Step 2: Submit the necessary documents and the application form; you can scan and upload the documents.

Step 3: After the initial approval, an executive from the credit card company will contact you to complete any additional formalities, if required.

Otherwise, you will receive the approval via email and SMS. After that, the credit card will be delivered to the registered address.

Selecting a business credit card: Things to keep in mind

Choosing the best business credit card might be challenging with many options available. Here are some tips to help you pick the right one.

Consider the needs of the company

When choosing a company credit card, your first consideration should be the nature of expenditure. Next, understand why you require a business credit card if you own a business or want one.

For instance, if your company executives need to travel regularly for work, you can opt for a credit card that has benefits on ticket booking, hotel booking, etc.

Credit limit

Applicants must request the credit limit from card issuers before submitting an online application for a business credit card.

Rewards and benefits

The next point to evaluate here is the reward and benefits available on these credit cards. Usually, corporate credit cards come with exciting benefits like airport lounge access, free travel tickets, discount on stays, etc. So, take note of them before applying.

How to prevent business credit card mistakes?

Using a credit card for payments is quick and safe. For short-term finance, credit cards work best. So, in case of any urgent company needs, these payment cards will be an excellent option.
Tracking rewards and other benefits from using your business credit card is essential. Every year, review your credit card loyalty program to ensure you’re getting the most out of the perks offered by your cards and to determine whether it’s time to upgrade.
Your credit card bills should always be paid on time. By doing this, you can avoid having to pay a late fee.

Parting thoughts

A business credit card is to be used for business expenses exclusively, unlike a personal credit card. Select the ideal business cards to help your company by offering you a range of benefits and rewards. Furthermore, a company card should not be overused because you risk being held personally responsible for any debts, just like any personal credit card.