Can a startup business get a credit card?

Yes, if you run a new business, you may be able to get a small business startup credit card. This is a credit card that’s designed specifically for business purposes (not personal use). You will need to meet the eligibility requirements set by the lender.

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Why would I consider getting a business credit card for my startup instead of a personal credit card? 

Personal credit cards are designed specifically for individual use. Getting a separate business credit card means that bookkeeping will be easier.

Rewards are more common with startup business credit cards than with personal credit cards. These may include:

  • cashback
  • travel insurance
  • air miles

Just remember that with a business credit card, you aren’t covered by the Consumer Credit Act. You will probably have to pay an annual fee on a card that comes with rewards.

Is my startup eligible for a credit card? 

Whether you’re eligible to take out a startup business credit card depends on whether your business meets the lender’s requirements. The criteria will vary from one lender to the next.

Having a good business credit score will make it more likely that you’ll get accepted. However, most startups have a thin credit history, since they haven’t had a chance to build one up yet. But many lenders also consider your personal credit score as well as your business one. So, if you have a good personal credit score you will have more choice of small business credit cards.

Having a poor personal credit history may not necessarily stop you from being accepted for a business credit card, but it will mean that you have less choice and may end up with a lower credit limit and a higher interest rate. So, it might be a good idea to build your credit score before applying.

Find out how to build your credit score when self-employed.

There are also other factors that are taken into consideration, such as: 

  • your age and residency status
  • how stable your address is
  • your income and outgoings
  • your credit history and credit score

 Read on to discover more about how to improve your chances of getting accepted.

What credit score do I need to qualify for a small startup business credit card? 

There isn’t a specific score you need because all lenders have different criteria. However, the higher your business credit score is, the lower risk you’ll appear to providers.

If you don’t have time to build up your business credit score first, you could always look for specialist lenders who look at your whole situation, rather than just your credit score. This does mean that you might have fewer options and may face less competitive rates.

Once you have a credit card for your business startup, you can use it to gradually improve your company’s credit score, by always paying on time. This may enable you to access better rates and other types of business credit in the future.

Can you get a business credit card with no revenue? 

Yes, you may be able to get a business credit card with no revenue if you sign a personal guarantee. This is a legally binding agreement that states if your business is unable to repay the debt on the credit card, you will have to pay out of your own pocket instead.

You need to make sure this is a feasible option that you can afford before you sign a personal guarantee, as any missed payments will impact your personal credit score. This could affect your chances of getting finance in the future.

How to choose your first business startup credit card 

There are so many cards out there that you can easily feel overwhelmed. Instead of just going with the first card you see, make sure you do your research properly.

Follow the steps below to choose and apply for your startup business credit card.

1. Compare business credit cards for startups 

To research your options, you could look at comparison websites or speak to a broker, and they’ll search the market for you. Some brokers have exclusive deals that aren’t available anywhere else, but fees may apply.

Think about factors like the annual fee, interest rates on purchases and foreign transaction fees. After all, you need to be able to afford your card. There are lots of different rewards from various providers. So, when you’re choosing your card, think about what you’d like to get out of it. For example, would you like foreign travel insurance? Or would you be better off paying less for a card without any rewards?

To find the cheapest offer with the lowest interest and charges, you’ll need to compare the Annual Percentage Rate (APR) on different credit cards. Bear in mind that interest will apply unless you pay the balance in full each month.

2. Decide how you want to apply

There are different ways you can apply. Traditionally people used to go into their local branch to get a credit card. You can still do this, but many lenders give you the option to apply online or over the phone. Consider whether you want to discuss your options in person, or whether you’re happy to apply on the lender’s website, or through a comparison site or broker instead.

3. Use a business credit card eligibility checker

Once you’ve found the card you want, make sure you use an eligibility checker to see how likely it is that you’ll get accepted before you apply. Once you formally apply, the lender will hard search your credit history. This leaves a footprint, meaning that making multiple applications in a short space of time can damage your credit score.

Eligibility checkers don’t affect your credit score - they only perform a soft search of your credit history, which doesn’t leave a footprint behind.

Disclaimer: All information and links are correct at the time of publishing.