# Should I Get a Business Credit Card? 7 Checks

> Yes, if you will pay it in full every month and use it to separate business spending, float material purchases for 20 to 50 days and control crew spending. No, if you need it to finance jobs while customers pay late. Nearly every small business card makes you personally liable, and the consumer CARD Act protections do not apply.

- Canonical URL: https://www.pavadotech.com/blog/should-i-get-a-business-credit-card-for-my-contracting-business
- Author: Om Patel
- Published: 2026-09-13
- Topic: Custom CRM

Most contractors asking this question are really asking two different things at once. One is whether a separate card makes the business easier to run. The other is whether a card can carry the business through the gap between buying materials and getting paid. The first answer is usually yes. The second is where contractors get hurt.

The data says construction is unusually exposed to the second problem. The [JPMorganChase Institute tracked small businesses holding one Chase business card](https://www.jpmorganchase.com/institute/all-topics/business-growth-and-entrepreneurship/small-business-use-of-credit-cards) from 2010 to 2023 and estimated each industry's probability of revolving a balance. Repair and maintenance came first at 38%. Construction was second at 37%. Retail was last at 27%. And revolving turned out to be a habit that sticks: 75% of firms that revolved every month of one year did it every month of the next, and only 1% flipped to paying in full every month.

So the right question is not which card has the best rewards. It is which of the seven checks below you pass before you let a bank extend your company credit on your personal signature.

- **Get one as a payment tool, not a loan.** Construction firms revolve card balances at an estimated 37%, second highest of 12 industries in JPMorganChase Institute data.
- **Your LLC does not shield you from the card.** Chase's Ink terms make the applicant personally responsible for all balances, even after leaving the company.
- **Some cards land on your personal credit report.** Capital One's Spark Cash reports full activity to the personal bureaus; Spark Cash Plus does not while in good standing.
- **You lose consumer protections.** The CARD Act's rate increase limits do not apply to business cards, and Chase's default APR of up to 29.99% can apply indefinitely to all balances.
- **Float is real but short.** Chase's due date is a minimum of 20 days after the statement closes, so a material purchase gets roughly 20 to 50 interest-free days depending on when in the cycle you buy.
- **Corporate cards have floors most small shops miss.** Ramp needs $25,000 in the bank and an LLC or corporation. Brex's commercial monthly card needs more than $500,000 in annual revenue.

## Should I get a business credit card for my contracting business?

Yes, if you can answer "I will pay the full statement every month" honestly. A business card separates company spending from household spending, turns a material run into a 20 to 50 day interest-free float, gives you a statement you can reconcile against jobs, and lets you hand a crew lead a card with a limit instead of your own.

No, or not yet, if the real reason you want one is that customers pay slower than suppliers want paying. A card is the most expensive rung on the financing ladder, and the consequences of a bad month land on you personally. That is a cash flow problem, and the fixes that actually close the gap (deposits sized to cover the order, progress billing, same-day invoicing) are covered in [our contractor cash flow guide](https://www.pavadotech.com/blog/contractor-cash-flow-management).

The seven checks below separate those two situations.

## Check 1: Are you buying a payment tool or a loan?

This is the check that decides everything else, and the JPMorganChase Institute data is blunt about how often owners get it wrong. Before 2020, about a third of small businesses with a business card revolved a balance in any given month. Construction firms in that sample had relatively high median revenue, $226,000 in 2022, and still had one of the highest revolving rates.

The persistence finding matters more than the headline. Among firms that never revolved in one year, 88% kept paying in full the next year. Among firms that revolved all 12 months, only 1% became full-pay transactors the following year. The Institute's own suggestion was that firms consistently revolving "might consider whether lines of credit or working capital loans could better meet their needs."

You can see the loan mindset in real threads. In an [r/smallbusiness post from a maintenance contractor](https://www.reddit.com/r/smallbusiness/comments/1jvowfy/i_was_awarded_a_136000_retail_project_theyre_net/) who won a $136,000 retail job on net 30 with no deposit, the owner needed about $10,000 for crew housing and food and had a 598 credit score. One commenter asked, "Any reason you're not just opening a couple of credit cards at 0% interest?" Another said a QuickBooks short-term loan at "around 15%" was "a lot cheaper than carrying credit card balances." The owner's edit says they decided to ask the client for installment payments instead, which addresses the actual problem.

Run the test on yourself: look at your last six months and count the months where the jobs that bought materials paid you before a card statement would have come due. If it is most of them, a card is a payment tool for you. If it is a minority, a card will become a loan whether you plan it or not.

## Check 2: Can you live with the personal guarantee?

Nearly every small business card makes you personally liable, and this is not buried. The [Federal Reserve's report to Congress on small business credit cards](https://www.federalreserve.gov/newsevents/conferences/sbc_smallbusinesscredit.pdf) states that "small business credit cards typically stipulate a personal guarantee, such that both the firm and the guarantor (either the business owner or an authorized officer) are responsible for balances accrued." The same report says issuers told Fed staff that small business card loss rates had historically run roughly 20 to 30 percent higher than consumer cards. The guarantee is how they price that risk.

Here is the exact language on [Chase's Ink Business Cash pricing and terms](https://sites.chase.com/services/creatives/pricingandterms.html/content/dam/pricingandterms/LGC64650.html): "you agree to be personally responsible, both individually and jointly with the Company, for payment of all balances incurred on all cards and accounts issued pursuant to this application." It continues: "if you leave the employment of the Company, you will continue to be responsible for the outstanding balances on the accounts."

That second sentence matters for partnerships. If two partners run a remodeling company and one opens the card, the one whose name is on the application owns the debt even after a split.

What it looks like when it goes wrong: an [r/smallbusiness owner posting about $700,000 in business debt](https://www.reddit.com/r/smallbusiness/comments/1uqcy25/700k_business_debt_revenue_stalled_and_i_need_to/) listed "roughly $250K in business credit cards (~20% APR)," all personally guaranteed, with "interest alone" at about $4,300 a month. A nonprofit debt management plan quote came to roughly $4,600 a month for about five years. The same owner noted that a business-only bankruptcy "probably does not solve the personally guaranteed debt."

The exceptions are corporate cards. [Ramp's eligibility page](https://support.ramp.com/applying-and-signing-up-for-ramp-us-based) answers "Does Ramp require a personal guarantee?" with "No." It sets limits from the company's cash balance, cash flows and revenue instead. Those cards come with their own floors, covered in Check 7.

## Check 3: Does the card protect your LLC or quietly undermine it?

Separate cards help preserve the entity. Mixed cards weaken it. That is the part most "build business credit" articles skip.

When a creditor cannot collect from an LLC or corporation, they can ask a court to pierce the veil and reach the owner. [Wolters Kluwer's summary of how courts decide](https://www.wolterskluwer.com/en/expert-insights/piercing-the-veil-of-small-business-what-the-owners-of-llcs-and-corporations-need-to-know) lists using company funds for personal expenses as "a major red flag for the courts." One of its examples is a construction case: an Alabama court pierced the veil of a solely owned corporation hired to work on a house after the owner testified the company had no money when the contract was signed and that the company account, funded only by the homeowner's money, paid for personal purchases at jewelry and sporting goods stores, car services and restaurants.

The first prevention step on Wolters Kluwer's list: "Maintain a bank account and credit cards for the corporation or LLC separate from the owners' bank account and credit cards."

Put Check 2 and Check 3 together and the real value of a business card becomes clearer. The personal guarantee means your LLC never protected you from the card debt itself. What a clean business-only card protects is the shield against everyone else: the homeowner suing over a leak, the supplier with an unpaid invoice, the sub with a claim. Charging a family vacation to the company card saves nothing on the card and hands a future plaintiff an exhibit. We covered what an entity does and does not protect in more depth in [should you incorporate your contracting business](https://www.pavadotech.com/blog/should-i-incorporate-my-contracting-business).

A practical rule from an [r/smallbusiness thread on personal versus business cards for a single-member LLC](https://www.reddit.com/r/smallbusiness/comments/1inyjzn/should_i_use_a_personal_or_business_credit_card/) is worth copying: pay the card only from the business checking account, take owner draws by transfer, and put money back in as an owner contribution when the business needs it. That way every movement between you and the company leaves a record.

## Check 4: Will it show up on your personal credit report?

Sometimes, and this is issuer by issuer, not a general rule. It matters for contractors because a single material order can be larger than most household credit lines, and the timing often collides with a truck loan or a mortgage application.

[Capital One spells out its own policy](https://www.capitalone.com/learn-grow/business-resources/do-capital-one-business-cards-report-to-personal-credit/): Spark Cash Plus, Venture X Business and Venture Business "don't report account activity to the personal credit bureaus as long as the account is open and in good standing." Spark Cash, VentureOne Business, Spark Cash Select and Spark Classic "do report primary cardholder activity to the personal credit bureaus."

[NerdWallet's issuer table](https://www.nerdwallet.com/business/credit-cards/learn/do-business-credit-cards-affect-personal-credit-score) covers the rest:

| Issuer | What reaches your personal credit report |
| --- | --- |
| American Express | Negative information only |
| Bank of America | Negative information only, if the account is not in good standing |
| Capital One | Full activity on most Spark cards, with exceptions above |
| Chase | Negative information only, seriously delinquent accounts |
| U.S. Bank | Negative information only, seriously delinquent accounts |
| Wells Fargo | Negative information only |
| Ramp, Brex (corporate cards) | Nothing, and no personal credit check |

NerdWallet's example fits a contractor exactly: charge a big order to a Spark card that reports, and "your credit utilization will spike," pulling your FICO score down. In NerdWallet's words, "Paying in full each month won't protect you from that." Picture a $38,000 cabinet and appliance order on a Spark Cash card with a $40,000 line the week your lender pulls credit for a new work truck.

Two points hold for every issuer on the list. Applying triggers a hard inquiry on your personal credit. And "negative only" still means a missed payment on the business card can damage your personal score.

## Check 5: Which protections do you lose?

More than most owners realize. The Fed report states plainly that "the substantive protections and disclosure requirements for credit cards under the Truth in Lending Act... do not apply to business credit card accounts," and that the CARD Act's new protections apply to "credit card account[s] under an open end consumer credit plan," and accordingly do not apply to business credit cards. The underlying regulation, [12 CFR 1026.3](https://www.law.cornell.edu/cfr/text/12/1026.3), exempts "an extension of credit primarily for a business, commercial or agricultural purpose."

Here is what that looks like side by side, using the consumer rules in Regulation Z and Chase's actual business card terms:

| Rule | Consumer card | Chase Ink Business Cash |
| --- | --- | --- |
| Time between statement and due date | Statement delivered at least 21 days before the due date ([12 CFR 1026.5](https://www.law.cornell.edu/cfr/text/12/1026.5)) | Due date "a minimum of 20 days after the close of each billing cycle" |
| Notice before a penalty rate | At least 45 days written notice ([12 CFR 1026.9](https://www.law.cornell.edu/cfr/text/12/1026.9)) | Default APR may apply if you miss a minimum payment or a payment is returned |
| Rate increase on existing balances | Generally limited, with a delinquency exception after 60 days late ([12 CFR 1026.55](https://www.law.cornell.edu/cfr/text/12/1026.55)) | Default APR "may apply indefinitely to all outstanding balances and future transactions" |
| Default rate | Varies | Up to 29.99% |
| Unauthorized use cap | $50 | $50 still applies, with an exception below |

The Fed report notes that some issuers voluntarily follow parts of the CARD Act on business cards while others told the Board they did not intend to. [Nav's guide](https://www.nav.com/business-credit-card/know-before-getting-business-credit-card/) makes the same practical point: "most issuers of small business credit cards will reserve the right to raise your rate if you are late with your payment, so setting up automatic payments is an especially good idea."

One protection does survive, with a catch that matters once you grow. [12 CFR 1026.12](https://www.law.cornell.edu/cfr/text/12/1026.12) keeps the $50 cap on unauthorized use for business cards. But "if 10 or more credit cards are issued by one card issuer for use by the employees of an organization," the issuer and the business can agree to liability for unauthorized use without regard to that cap. Once your tenth crew card goes out, read the liability clause.

A card statement tells you what was spent. It does not tell you which job it belongs to or whether that job's customer has paid yet. We build a [custom CRM](https://www.pavadotech.com/crm) where material purchases, job budgets and customer payment dates sit on the same record, so you can see a card balance coming due against the money that is supposed to cover it.

## Check 6: What does float actually buy you on a material order?

Between about 20 and 50 interest-free days, depending on when in the cycle you buy, and only if you paid the previous statement in full. That is the honest version of the "manage cash flow" line every card vendor uses.

The mechanics come from Chase's terms. The due date is at least 20 days after the statement closes, and Chase will not charge interest on new purchases "if you pay your entire balance or Interest Saving Balance by the due date each month." With a roughly 30 day statement cycle, a purchase on the first day of the cycle gets about 50 days before payment is due. A purchase the day before the statement closes gets about 20. [Levelset's contractor guide](https://www.levelset.com/blog/construction-businesses-credit-cards-tips/) describes the grace period as between 21 and 25 days; on this Chase business card the floor is 20, which is another small reminder that consumer norms are not guaranteed on business products.

A worked example, with the numbers stated so you can swap in your own:

| Step | Kitchen remodel, card paid in full |
| --- | --- |
| Cabinets and materials charged | $9,000 on day 5 of a 30 day cycle |
| Statement closes | Day 30 |
| Payment due | Day 50 |
| Customer's progress payment arrives | Day 40 |
| Interest paid | $0 |
| Reward at 1% (Chase Ink Business Cash base rate) | $90 |
| Reward at 2% (Amex Blue Business Cash, under its $50,000 cap) | $180 |

That is the good version. The deposit or progress draw arrives inside the float window, the card pays for itself, and your bank account never dipped to buy the order.

Some contractors stack floats. One [r/Contractor commenter in a thread about a GC paying net 90](https://www.reddit.com/r/Contractor/comments/1rfl60e/dealing_with_a_gc_that_pays_90_days_out/) described charging to a supply house account, then paying that account at 30 days "with a card that gets you cash back," which he called "60 days no interest on your materials." It works only if the money has arrived by the second due date. It also moves the risk from a supplier who might call you to a card issuer who can reprice your whole balance.

Paying subcontractors by card is a separate calculation, usually worse, because the payment platform fee lands on top. We ran those numbers in [the best way to pay subcontractors](https://www.pavadotech.com/blog/best-way-to-pay-subcontractors).

## The late-payer scenario: financing a job at card rates

Now take the same kitchen and change one fact: the homeowner pays 65 days after your due date. This is where the card stops being a tool.

Using the top of Chase's post-intro purchase APR range, 24.74%:

| Cost | How it is calculated | Amount |
| --- | --- | --- |
| Interest on the $9,000 | $9,000 x 24.74% x 65 / 365 | about $397 |
| Lost grace on other purchases | $6,000 of new material charges a month accruing interest for about 30 days each, two months | about $244 |
| Total interest | | about $641 |
| Reward earned on the $9,000 | 1% to 2% | $90 to $180 |

The interest wipes out the reward three and a half to seven times over. If the job nets $2,200, the card just took almost 30% of the profit. And if the cash crunch makes you miss one minimum payment, Chase's default APR of up to 29.99% can attach to the whole balance with no end date.

Late payment is not a rare event in this trade. A contractor who posted in [r/Contractor about closing a 15 month old business](https://www.reddit.com/r/Contractor/comments/1qujism/how_to_gracefully_close/) that grossed about $325,000 wrote that accounts receivable had run as high as $121,000, and in a later comment said they were owed $112,000 that "liens or threats of liens are doing nothing" to collect. They also wrote: "We dont owe anyone anything because I ran the business with essentially zero debt. Always buying in cash." Put that receivable pile on a revolving card and the story ends differently.

The 0% intro APR does not change the logic, it delays it. Chase's 0% on the Ink Business Cash lasts 12 months, and missing a required minimum payment ends it early: "We will end your Introductory APR if you fail to make any required Minimum Payment by the date and time due and the Default APR will take effect." Levelset suggests moving a stuck balance to a new card; Chase's terms charge "either $5 or 5% of the amount of each transfer, whichever is greater" and note "this account may not be eligible for balance transfers."

If late payers are a pattern rather than an event, price the float into your bid or finance it with a facility built for it. The comparison of options is in [contractor financing companies compared](https://www.pavadotech.com/blog/contractor-financing-companies-compared).

## Check 7: Revolving, charge, or corporate card?

Match the card type to Check 1. If you pay in full, a charge or corporate card enforces the discipline for you. If you need occasional room, a revolving card gives it at a price. The catch is that the cards that do not require a personal guarantee also have eligibility floors a lot of small contractors will not meet.

| Card | Type | Key terms verified | Who it fits |
| --- | --- | --- | --- |
| [Chase Ink Business Cash](https://creditcards.chase.com/business-credit-cards/ink/cash) | Revolving | $0 annual fee; 0% intro APR 12 months, then 16.74% to 24.74% variable; 5% on first $25,000 at office supply stores and internet, cable and phone; 2% on first $25,000 at gas and restaurants; 1% on everything else | Owner-operators with modest spend who want an intro period |
| [Amex Blue Business Cash](https://www.americanexpress.com/us/credit-cards/business/business-credit-cards/compare-credit-cards/compare-cash-back-business-credit-cards/) | Revolving | $0 annual fee; 2% on the first $50,000 of eligible purchases each calendar year, then 1%; Expanded Buying Power above the limit | Shops spending under $50,000 a year on card who buy at many suppliers |
| [Capital One Spark Cash Plus](https://www.capitalone.com/small-business/credit-cards/spark-cash-plus/) | Pay in full, no preset limit | Unlimited 2%; $150 fee refunded each year you spend $150,000; 2.99% late fee; option to carry a portion with interest | Heavy material buyers who pay in full |
| [Ramp](https://support.ramp.com/applying-and-signing-up-for-ramp-us-based) | Corporate | No personal guarantee; US corporation, LLC or LP with an EIN; at least $25,000 in a linked US business account; no sole proprietors | Incorporated contractors with cash in the bank and several cardholders |
| [Brex](https://www.brex.com/support/brex-account-requirements) | Corporate | Commercial businesses need more than $500,000 in annual revenue for the monthly payment card | Larger commercial contractors |
| [BILL Spend and Expense](https://help.bill.com/direct/s/article/6282738) | Corporate charge | "The entire balance is due on the account's due date" | Firms already paying bills through BILL |

Hold the corporate card floors against the JPMorganChase Institute's $226,000 median revenue for construction firms in its sample. A typical small contractor at that size clears neither Brex's $500,000 revenue line nor, often, Ramp's requirement to be a registered entity with $25,000 sitting in the account. For most one to five truck shops, the realistic choice is a traditional card with a personal guarantee, which makes Checks 2 through 5 the part to read twice.

Reddit's contractor subs lean toward the pay-in-full products. In an [r/Contractor thread asking what card people use](https://www.reddit.com/r/Contractor/comments/1j2waq7/so_what_credit_card_are_you_guys_using/), one user reported a Capital One card with a $60,000 limit, another said they had run an Amex Business Gold "up to 40k-ish on a big month," and a third put the flat 2% math simply: "Put $300k into a job and earn an extra $6k."

## Do contractor rewards actually move the needle?

Only at volume, and the categories rarely match what you buy. Lumber, drywall, wire and pipe are not office supplies or restaurants. On Chase's Ink Business Cash, materials earn the 1% base rate.

In an [r/Contractor thread on credit card rewards](https://www.reddit.com/r/Contractor/comments/1mz6yb5/credit_card_rewards/), a kitchen and bath remodeler asked specifically for bonus rewards at Home Depot, Floor and Decor and a lumber yard. One commenter said his company runs "about 30-40k per month" on Chase Ink cards, paid in full, and ends up with "6 or 7k worth of points" a year. Another said the only card he had seen with bonus rewards at Home Depot "was from HD and it had absurd interest rates."

The store cards are worth understanding before you sign up at the pro desk:

- **Lowe's.** The [Lowe's business credit page](https://www.lowes.com/l/Credit/business-credit-center) now offers the MyLowe's Pro Rewards Credit Card, the MyLowe's Pro Rewards American Express Card and a Commercial Account. The 5% off every day applies to all three, but it "can't be used in conjunction with" volume programs "such as but not limited to, Contractor Pack, Buy in Bulk, Member Volume Discount." On a large order quoted through a volume program, the 5% may not stack.
- **Home Depot.** The [Pro Xtra Credit Card on Citi's site](https://www.citi.com/credit-cards/home-depot-pro-xtra-credit-card) has no annual fee, earns perks 4x faster when registered to Pro Xtra, and lets you issue authorized user cards to employees. The landing page does not print the APR; it tells you to see the card agreement.

Some owners work the categories. One commenter in that rewards thread buys Home Depot gift cards at office supply stores to earn the Ink Business Cash 5%. Know the risk before copying it: Chase's rewards terms say you "will immediately lose all your points if your account status changes, or your account is closed for program misuse."

The simplest way to decide whether rewards matter: a 2% reward is worth exactly one month of interest at a 24% APR. If you will revolve even one month a year on a given balance, the rewards on that balance are gone.

## Employee cards: controls before plastic

Crew cards save time and cause most of the horror stories, so decide the controls first. Chase's terms say employees added to the account "will have equal charging privileges unless individual spending limits are established for them," and that "you, as the Authorizing Officer, together with the business are responsible for any use of the account by you, an authorized user or anyone else permitted to use the account." [Amex's Blue Business Cash offer terms](https://www.americanexpress.com/en-us/campaigns/small-business/credit-cards/blue-business-cash/offer-welcome/) note that an employee spending limit "is not a guarantee" and that some purchases, such as restaurant tips and extended hotel stays, can go over it.

What goes wrong without limits: an [r/Contractor owner with 10 employees](https://www.reddit.com/r/Contractor/comments/1kv8m49/employees_buying_gift_cards_with_company_cards/) who had never capped travel meal spending discovered crews were buying gift cards to top up what they felt the per diem should be, for example a $40 grocery store gift card against $35 of actual meals. After interviewing everyone he found it had gone on for two to three years. He moved per diem onto the paycheck. The fix is not more trust or less trust, it is spending data you can see by person and by job the same week, which is the kind of view we build into a [contractor CRM](https://www.pavadotech.com/crm) rather than leaving it in the card portal.

What goes wrong even with honest crews: a [small commercial GC running three to five jobs](https://www.reddit.com/r/Contractor/comments/1w8ctyg/how_are_other_gcs_keeping_material_runs_tied_to/) described a foreman's $3,800 electrical material purchase coded to the wrong project because the receipt arrived as an unlabeled photo in a group text. Several replies recommended Ramp cards; one warned that "separate cards per job will fail the first time somebody grabs the wrong one out of the truck."

The receipt and policy side of this, including what to do when a card comes back without paperwork, is in [how to get employees to turn in receipts](https://www.pavadotech.com/blog/how-to-get-employees-to-turn-in-receipts). And a card statement is not proof of a deductible expense on its own; the reasons are in [how to track receipts and expenses by job](https://www.pavadotech.com/blog/how-to-track-receipts-and-expenses-by-job).

## Canada: same guarantee, different numbers

The personal liability is the same, sometimes stated more bluntly. The [RBC Royal Bank Business Credit Card Agreement](https://www.rbcroyalbank.com/credit-cards/documentation/pdf/rbc-royal-bank-business-credit-card-agreement.pdf) makes "the Applicant and each Owner... jointly and severally (in Quebec, solidarily) liable to us for all Debt charged to the Account, no matter how it is incurred or who has incurred it." [TD's Business Cash Back Visa page](https://www.td.com/ca/en/business-banking/small-business/credit-cards/business-cash-back-visa-card) says "the business and business owners are jointly and severally liable for all charges made to each TD Business Card Account."

The pricing is flatter than in the US. [RBC's small business card lineup](https://www.rbcroyalbank.com/business/credit-cards/small-business.html) shows a 19.99% purchase rate and 22.99% cash advance rate on each card listed; the Business Cash Back Mastercard has no annual fee and earns 2% cash back for the first 3 months, then 1%. TD's Business Cash Back Visa has no annual fee, the same 19.99% and 22.99% rates, 2% on gas and EV charging, transit and office supplies (each capped at $15,000 of spend a year), 2% on recurring bill payments and streaming, and 0.5% on all other purchases. For a Canadian renovator, that means a lumber yard order earns half a percent.

## The decision framework

Answer these in order. Stop at the first line that describes you.

| Your situation | What to do |
| --- | --- |
| You revolved on any card in 6 or more of the last 12 months | Do not add a card. Fix deposits and billing, or arrange a line of credit priced for the gap |
| Customers routinely pay after your supplier and card due dates | Same as above. A card will become a loan |
| You pay in full, you are a sole proprietor, spend under $50,000 a year | A no-fee revolving card with a flat rate, paid by autopay from business checking |
| You pay in full and put more than $150,000 a year on card | A pay-in-full card that does not report to personal credit, such as Spark Cash Plus |
| You are an LLC or corporation with $25,000 or more in the bank and several people buying | A corporate card with per-person limits and no personal guarantee |
| You are about to apply for a mortgage or vehicle loan | Wait, or choose a card that reports only negative information |
| You buy mostly at one big box store without volume pricing | Add that store's card for the discount, pay it in full, keep a general card for everything else |

## Setup checklist before the first swipe

1. Open the card in the business name and pay it only from the business checking account.
2. Turn on autopay for at least the minimum, so a busy week never triggers a default APR.
3. Pick your statement closing date to fall just after your usual deposit and progress billing days.
4. Write down which cards report to your personal credit and time big purchases away from personal loan applications.
5. Set a spending limit on every employee card before handing it over.
6. Decide, in writing, which purchases go on the card and which go through supplier accounts or bank transfer.
7. Review card charges against open jobs weekly, not when the statement arrives.
8. Revisit the decision after six months: if you revolved in more than one month, move to the first row of the framework.

## FAQ

### Do I need an LLC or an EIN to get a business credit card as a contractor?

Not for a traditional small business card. Nav notes that sole proprietors can typically apply with a Social Security number instead of an EIN. Corporate cards are different: Ramp requires a registered corporation, LLC or LP with an EIN and at least $25,000 in a linked US business bank account, and it does not accept sole proprietors.

### Does a business credit card affect my personal credit score?

It depends on the issuer and the card. Capital One says its Spark Cash, Spark Cash Select, Spark Classic and VentureOne Business cards report the primary cardholder's activity to the personal bureaus, while Spark Cash Plus, Venture X Business and Venture Business do not unless the account falls out of good standing. NerdWallet reports that Amex, Bank of America, Chase, U.S. Bank and Wells Fargo report only negative information. Almost all of them pull your personal credit when you apply.

### Am I personally liable for my business credit card if my LLC goes under?

Almost always, yes. Chase's application terms for the Ink Business Cash say the applicant agrees to be personally responsible, individually and jointly with the company, for all balances, and stays responsible even after leaving the company. RBC and TD in Canada make the business and its owners jointly and severally liable. The LLC can still protect you from other creditors, but not from a card debt you personally guaranteed.

### Can I just use my personal credit card for business expenses?

You can, and plenty of small operators do, but it makes bookkeeping harder and weakens the separation that keeps an LLC's liability shield intact. Wolters Kluwer lists separate bank accounts and credit cards for the entity as the first step owners can take to avoid a court piercing the veil. A second card with business-only charges costs nothing on most no-fee products.

### Is it bad to put job materials on a credit card?

Not if the customer's payment lands before the card's due date and you pay the full statement. It becomes expensive the moment you revolve. On Chase's Ink Business Cash pricing, the variable purchase APR after the intro period is 16.74% to 24.74%, and a missed minimum payment can trigger a default APR of up to 29.99% that may apply indefinitely to all balances.

### What is the best credit card for Home Depot and Lowe's purchases?

There is no single answer, because the store cards and the general cards reward different things. Lowe's offers 5% off every day on its MyLowe's Pro Rewards cards and Commercial Account, but the discount cannot be combined with volume programs like Contractor Pack or Member Volume Discount. The Home Depot Pro Xtra Credit Card earns Pro Xtra perks 4x faster. A flat 2% card works everywhere, including the lumber yard.

### Do business credit cards have the same protections as personal credit cards?

No. The Federal Reserve's report to Congress states that the CARD Act's new substantive protections apply to consumer credit card accounts and do not apply to business credit cards. Business cards keep the older protections against unsolicited cards and the $50 cap on unauthorized use, but not the 45-day notice before rate increases or the limits on raising rates on existing balances.

### Should I give my employees company credit cards?

Give cards to the people who buy weekly, with a spending limit on each card, and review charges weekly. Chase's terms say you and the business are responsible for any use of the account by an authorized user. Federal rules also let an issuer and a business with 10 or more employee cards agree to liability for unauthorized use outside the usual $50 cap, so read that clause before you scale up.