Can you get a credit card for an LLC?Everything You Need to Know

Credit can be an incredibly powerful tool for a growing business.

Various forms of loans for a business can facilitate new investment in the business, growth, and they can help with managing cash flow.

Beyond that, having a credit card to pay for things is convenient, especially in today’s world of online shipping and eCommerce.

If you’re wondering whether or not you can get a credit card for an LLC, we’ll cover that in great detail along with plenty of other very useful information on the topic of business credit cards, credit for an LLC, and other tangential things that are great to know.

Let’s start with the most important question, which is whether or not this is even possible to do in the first place.

Can You Get a Credit Card for an LLC in 2022?

credit card for llc

Yes, you can get a credit card for an LLC in 2022.

An LLC is able to apply for a credit card and it’s a similar process as applying for a personal credit card, you’re just doing it under the name of the LLC instead of your personal name.

You can even apply for a credit card for an LLC online.

You’ll need to already have your LLC registered and fully setup, and then you can go to whichever bank you prefer (or even your local credit unions) and apply for a business credit card.

The main difference is that instead of applying for a personal card, you’ll be applying for a business card.

These two types of credit cards are essentially the same (personal and business), except for some differences that we’ll cover shortly.

The main difference is that a business credit card is opened under the business’ name, but in some cases, especially with a newer business, your personal name could be associated with it for liability purposes.

Benefits of an LLC Credit Card for Your Business

Business credit cards come with all of the same benefits as personal credit cards, along with some additional extra features that are tailor-made for business clients.

Easier Than a Loan

It’s easier to get a business credit card than a business loan.

The business credit card is going to have a higher interest rate, but if you stay on top of your bills and don’t carry a balance, this is a good way to build some credit for your business so that you’ll have more access to business loans and other types of financing for the company as you grow.

Rewards and Perks

If the business is spending a lot of money on purchases, you can earn rewards points by running those purchases through a credit card.

Many people travel for nearly free using rewards from their business credit cards, but there are a number of different types of rewards.

Some of these rewards cards will come with a yearly fee, but it can still be worthwhile if you calculate the additional rewards you’ll earn.

Cards for the Business’ Employees

With a business credit card account, you can get separate cards for employees to charge their expenses to and other necessary purchases for the business.

This makes things a lot easier to track than having them spend their own money and being reimbursed.

You can set different limits for different employee’s cards, and it makes tracking costs a lot easier.

Purchase Protection

Credit cards will often add time onto the manufacturer’s warranty for items purchased using the card, and they can also offer protections on purchases for travel such as travel insurance, and more.

It’s worth reading the little booklet that comes with a credit card because these benefits can be very useful for businesses of all sizes.

Establish Business Credit

A credit card for an LLC is one of the quickest ways to start establishing a credit history for the business.

The card issuer will report your account status and standing to the bureaus that are responsible for tracking your business’ credit score.

Types of Businesses That Qualify

An LLC isn’t the only type of business that can get a business credit card, of course.

Here’s a quick list of other types of business and corporate structures that are eligible to apply for credit cards in the business’ name to reap all of the aforementioned benefits.

  • Freelancers and sole proprietors
  • Small businesses
  • Medium businesses
  • Large businesses
  • Corporations
  • LLC’s (limited liability companies)

We’re focusing on LLC’s, which help to reduce some of the liability of the owner of the company, compared to a sole proprietorship where the owner is fully responsible and their own personal assets are at risk if something should happen to the company.

3 Things To Do Before Applying for a Credit Card for an LLC

credit card for llc

Before you start firing off applications for business credit cards for an LLC, here are some things to do and consider first.

Get Your Documents Ready

You’ll need to have some documents and information ready to submit when you apply for the card.

When you’re applying for a personal card, you’ll need to include information such as your name, SIN, address, birthdate, along with authorizing them to look at your personal credit report.

With a business card, you’ll likely need all of the aforementioned information and probably some additional info like the name of your business, your industry, how much money the business is earning, and an EIN (if you have one already).

Shop Around for The Best Fit

Different cards will have different rewards and incentives, different interest rates, different fees, and so on.

It can make sense to get a high-fee card if you’re going to earn a lot of extra points on your business expense purchases, or pay a lower interest rate, but you’ll need to sit down and calculate and compare the different options to get the best fit.

Beyond that, it’s worth noting that business credit cards can have higher limits than personal cards, especially if the business is profitable and has assets that the bank could seize in the event of delinquent payments.

Talk To Your Bank

If you have a history at a particular bank, it could be worthwhile to reach out to them for your business credit card.

There could be advantages if you have a history with them, even if it’s with your personal accounts.

Now, it’s entirely possible that this won’t make a difference, but it never hurts to ask while you’re researching the business credit cards that are offered by different banks and lenders.

Should You Get a Credit Card For Your LLC?

Just because you can do something, that doesn’t mean that you should do something.

After looking over the benefits of an LLC card, and the steps to take before getting one, the next decision is whether you should actually move forward with this or not.

Here are some questions to ask yourself concerning whether you should move forward with a credit card for an LLC.

Do you have other financing options?

Depending on what these funds are for, there could be better ways to get funding and financing for your business rather than a credit card because credit cards will generally have higher interest rates.

If you can get a business line of credit for your LLC, you could end up saving a lot of money on interest, but it might be easier to get a credit card so this will depend on how established your business is and how you plan on using the funds.

Sometimes, a business line of credit will be tied to a credit card, so you’ll have a credit card number and you can spend the money just like any credit card, but the interest rate is lower and more in-line with what you would expect from a line of credit in terms of rates.

Do you need it to make purchases?

If you need a credit card to make orders online or in-store, or to give your employees access to company funds for their job, then you’ll probably want to get a credit card for your LLC.

If you plan to use other payment methods and don’t need to borrow funds at all, then you could potentially save some money by skipping on the business credit card but you’ll miss out on building your company’s credit score and you’ll miss out on rewards points.

If interest costs are a concern, you can always pay your credit card bills ahead of time and in full.

Do you have an EIN?

You don’t need an EIN to apply for a business credit card, depending on the status of your business.

If you’re still a sole proprietorship, you won’t have an EIN so you can use your personal social security number.

If you are an LLC or other type of business, you’ll want to apply for an EIN and then use that while applying for the credit card you’re going to use with your business because it will help the business credit agencies report on your business to help grow your business’ credit score.

Final Thoughts on Getting a Credit Card for an LLC

Getting a credit card for an LLC has many advantages. It’s convenient, helps you stay organized and keep your finances separate, helps to build up the credit score of the business, and can earn you rewards, too.

It also helps with categorizing expenses since many credit cards will automatically sort your transactions by purchase-type which can be very useful for businesses.

Most businesses and LLCs will want to get a business credit card because the advantages are numerous, as long as you’re responsible with it and you take time to pick out a good card that fits your needs.