We follow high standards of editorial integrity on this website to help you make informed decisions. This article may include links to services and products from our partners. We may receive compensation when you sign up, at no cost to you. It does not change our unbiased reviews, evaluations or advice. Please take a look at our disclosure.

A Complete Guide To Getting A Business Credit Card In Canada

SHARE:

How to Get a Business Credit Card in Canada
Reading Time: 5 Min

Business credit cards are specialized cards designed with businesses in mind. But what benefits do they offer, and how can you use a business credit card to grow your business and gain rewards? This article outlines the features and benefits of business credit cards in Canada, goes over how to get one, and offers tips on how to get the most out of your business credit card.

If you’re considering getting a business credit card and want to know more about the benefits and how to qualify for one – this article has you covered.

What Are The Features Of Business Credit Cards?

In Canada, businesses of all sizes use business credit cards to help their business grow. Business credit cards help cover business expenses, improve business credit scores, and offer business-focused reward programmes. Their most important features include:

  • It separates personal and business expenses. This separation makes it easier to track business spending and makes it considerably easier to calculate tax payments and deductions.
  •  
  • Business-specialised rewards. Rewards include cash back on business expenses, travel rewards, and points on purchases typically related to business purposes. These rewards differ by card. For more information on the available rewards, see our section on business credit cards in Canada.
  •  
  • Line of credit. Business credit cards offer a line of credit to help you manage cash flow. Even when business is slow, you can still use your credit card to make essential purchases and pay it off when revenue improves again.
  •  
  • Improves credit score. When used correctly, a business credit card can demonstrate creditworthiness to lenders, helping with future business loans and credit.
  •  

Higher credit limits. Higher credit limits are helpful when making bulk business purchases or when encountering high-value business expenses.

What Are The Requirements For Getting A Business Credit Card?

Securing a business credit card in Canada requires meeting certain prerequisites. These requirements vary depending on the card issuer, but there are some general criteria that most issuers consider:

  • Have a registered business. This means your business must be officially recognized by the government and have a business registration number.
  •  
  • Have a good credit history. Both your personal and business credit history should be good. Your history should indicate that you can responsibly manage credit and can pay off any debts.
  •  
  • Additional documentation. You may need to provide documents like tax returns and financial statements to qualify for a business credit card. This helps the issuers assess your ability to repay credit.
  •  

If you meet these criteria, you can start researching the best business credit card for you and your business.

How To Choose The Best Business Credit Card For Your Business In Canada

When choosing a business credit card, it’s important to do your due diligence and compare the cards on offer. Always remember to consider and compare the following factors:

  • Interest rates. The lower the better – unless the card has excellent benefits that make the high interest worth the risk.
  •  
  • Annual fees. Some credit cards have no annual fee, while others cost up to $599 annually.
  •  
  • Rewards program. Consider how much you will benefit from specific cash-back and points on offer from each card. Some business cards offer you a choice for which purchases get the most cash back, while others have fixed terms.
  •  

There are several online resources you can use to compare cards. If you’re unsure where to look, see our comparative guide on the best business credit cards in Canada.

Remember, the best card for your business is not necessarily the one with the lowest interest rate or the highest rewards. It’s the one that aligns with your business needs and spending habits.

How To Apply For A Business Credit Card In Canada

Once you know which credit card works best for your business you can start the application process. Acquiring a business credit card in Canada is similar to getting a personal credit card but with some additional steps. You can apply for most credit cards online or at a bank branch. The following steps outline what you can expect during your application:

  1.        1. Business details. You will need to provide details of the business. These 
  2.            typically include:
  •  
  •                   – Business registration number and license.
  •                   – Annual revenue.
  •                   – Business name, address and contact details.
  •                   – Information on the nature of your business operations.
  •                   – Tax documentation.
  •                   – Your estimated monthly credit card expenses.
  •                   – Partnership agreements.
  •  
  1.        2. Credit history. The card issuer will look at your business credit history, but 
  2.             some may also look at your personal credit history.
  3.  

After submitting your application, the credit card issuer will review it and make a decision. If approved, you’ll receive your card and can begin using it for your business expenses.

Tips On How To Get Approved For A Business Credit Card In Canada

To ensure you have the best chance of getting your business credit card application approved, see the following tips:

  • Ensure your business and personal credit is good. If you’re unsure, check your credit score and take steps to improve your credit before applying. Improving your credit involves paying off your debts consistently and using existing credit cards wisely.
  •  
  • Make sure you have your documentation ready. If the card issuer asks for additional documentation, provide it promptly.
  •  
  • Make sure you qualify for the card before starting the application process. Most credit cards have credit score requirements and annual revenue expectations. Ensure you meet these before beginning the application.
  •  
  • Pick the right card for your business. Some cards are aimed at small businesses, while others are better for larger businesses. Make sure you find a suitable card to improve your chances of success.

Mistakes To Avoid When Applying For A Business Credit Card In Canada

While applying for a business credit card in Canada, aim to avoid these common mistakes that hinder your approval chances:

  • Not knowing your credit score. Make sure to check your score before you apply.
  •  
  • Picking the wrong card. Pick a card that aligns with your business needs and spending habits. For example, if your business makes bulk purchases, choosing a card with good cashback benefits for certain expenditures is best.
  •  
  • Applying for multiple cards at once. Applying for a credit card triggers a hard inquiry on your credit report, which lowers your credit score temporarily. It’s better to apply for one card at a time and wait for the result before moving to the next one.

How To Get The Most Out Of Your Business Credit Card

Once you’ve secured a business credit card, it’s crucial to manage it effectively. A well-managed credit card will help you maximize rewards while avoiding interest charges. See the following for our tips:

  • Pay your balance on time. Paying your balance on time ensures you never have to pay additional interest charges and keeps your credit score healthy.
  •  
  • Review your card statements. This will help you keep track of spending and ensure there are no flaws or discrepancies.
  •  
  • Take advantage of your credit card rewards. Use your card to get cash back or points for certain purchases, but remember that rewards should not be the sole reason for purchases. Ensure it’s something you need!
  •  
  • Set guidelines for free employee cards. If your credit card offers employee cards, make sure you set guidelines on how they are allowed to use the card.

Conclusion

Getting a business credit card can improve your business operations, help during times of low revenue, and save you money on business expenses through cash-back and point offers. If you’re just starting out or if you own a large, well-established business, there’s a credit card for you.

Remember to choose the right credit card for your business, and to compare your options carefully. So do your research, choose wisely, and manage your card effectively. Your business will thank you for it.

Author Bio

User
Mohamed Konate

Mohamed Konate is a personal finance expert, blogger, and marketing consultant based out of Toronto. He is a former financial services professional who worked for many years at major Canadian financial institutions where he managed the marketing strategy around various financial products ranging from credit cards to lines of credit. Mohamed is passionate about personal finance and holds a Bachelor in Business Administration from the University of Quebec (Montreal) and a Master in International Business from the University of Sherbrooke (Quebec).He is also the author of the Canadian Credit Card Guidebook.

Credit Card Deals

Tangerine World Mastercard® Review
Apply for a Tangerine World Mastercard® by April 30, 2024 and earn an extra 10% back* (up to $100)
Ends Apr 30, 2024
Tangerine Money-Back Credit Card Review
Apply for a Tangerine Money-Back Credit Card by April 30, 2024 and earn an extra 10% back (up to $100)
Ends Apr 30, 2024
Simplii Financial™ Cash Back Visa* Card Review
For your first 4 months, enjoy 10% bonus cash back‡ at restaurants and bars up to $500 spend. Get 4% cash back after that.
Ends Feb 29, 2024
Neo Card Review
Get $25 cash back when you sign up for the Neo Credit Mastercard.
Neo CardTM (Secured) Review
$25 welcome bonus for new cardholders