What You Need to Know About Business Credit

Key Takeaways:

• Business credit cards remain essential. 89% of small businesses used them for purchases in 2025.
• Combine tools for flexibility. Using both a credit card and a line of credit can help meet short-term financing needs.
• Modern features matter. Virtual cards, real-time alerts and AI-driven expense tracking improve security and efficiency.
• Credit health is evolving. Lenders now consider cash flow and digital payment history alongside traditional credit scores.

Choosing the right tool for your business needs

More than half of small business use credit cards on a regular basis—but is that resource being levereged as effectively and powerfully as it could be? Whether you're new to the world of business credit or simply considering your options, this concise guide can help you position your company to effectively use and manage this tool.

Using a business credit card vs. a line of credit

For newer businesses or those who haven’t used credit extensively, choosing between a business credit card or a line of credit can sometimes be confusing.

The main difference between the two comes down to limits and access. A business line of credit provides access to cash that goes directly into your business checking account, whereas a business credit card can be used wherever credit cards are accepted. This means that while lines of credit tend to have higher limits, they are not as convenient to spend. They’re best suited for one-time special purchases.

How to use a business credit card

A credit card might be preferable for smaller or ongoing purchases that happen more frequently. You can issue the card to select managers or staff and not have to worry about waiting for an invoice or writing a check. Credit cards are also more useful for online purchases – think office supplies or subscriptions related to the business. Today, many business credit cards also offer virtual card numbers and enhanced fraud protection, making them even more practical for digital transactions. This is a convenient source of short-term financing and can be cost-effective, particularly if your company pays the credit card balance in full each month.

The best of both

Because there are pros to both, having both a business line of credit and a business credit card in tandem may be a solid approach to meeting your company’s short-term financing needs. Fintech lenders and digital lines of credit have also become popular options, offering faster approvals and flexible terms compared to traditional banks.

Why use a business credit card?

Business credit cards not only allow a company to track expenses in one convenient place and avoid the need for an owner or designated employee to run up personal cards but also provide access to funds that can be easily utilized to make necessary purchases for the company, as well as cover travel and other miscellaneous business expenses.

While the personal credit of small- and mid-sized business owners will often be considered in the application process, there can be significant differences between a personal and business credit card.

For example:

• Bookkeeping is easier with a business credit card since the expenses are already broken out and can be integrated with accounting tools. Many cards now sync automatically with cloud-based accounting platforms and expense management apps.
• Business credit card limits are often higher than those for consumers. Any bonus rewards from the card will tend to be geared toward business expenses. Some cards now offer AI-driven spend analysis and category-based rewards tailored to business needs.

Controlling business credit card usage

Money spent via a company credit card is no different than any other disbursement. Just as most businesses don’t provide access to the company checkbook, you will want to control which employees have access to a company credit card. Also, formulate strong guidelines for how it can be used, set limits on the amount that can be spent, and establish alerts to help monitor usage. Most issuers offer real-time transaction notifications, customizable spending controls, and multi-factor authentication to help businesses reduce fraud and maintain tighter oversight.

What to know before you apply for a business card

If you’re hoping to be a good business credit candidate, there are a few things you’ll want to do with your operations to help establish credibility. This is especially important if you have poor personal credit history, as a personal credit check is often part of the review process:

• Be sure your business has its own identity: Determine and establish the proper business entity type for your company. This might be an S-Corp, an LLC, or something else. This will help show that your personal and business operations are distinct.
• Obtain a federal tax I.D. number (FEIN): You will want to use this number versus your personal Social Security number for any business conducted.
• Open a separate checking account for your business: Use this business account for purchases and payments related to the business so you can keep business and personal expenditures separate.
• Establish a separate business phone number: This is another step in building your business's identity and ensuring operations are distinct from personal matters.
• Conduct business under the name of your business, not your own name. This is mostly for bookkeeping purposes. Consistently keeping revenue and expenses under the business name makes it easier to obtain any records or proof of revenue you may need in the application process.

Many issuers also allow digital verification of business identity and instant online applications, reducing paperwork and speeding up approval times. Some even offer pre-qualification tools that do not impact your credit score.

Maintaining a good business credit score

You may not have credit needs now, but establishing and maintaining good credit can be critical as your business grows. The ability to obtain a business loan or a line of credit will depend in large part on the financial and credit history of the business.

The rules of thumb for maintaining a good business credit score are not all that different than the ones you’d employ for your personal credit score:

• Pay your business credit card bill by the due date each month.
• Pay all bills and invoices connected to the business by the due dates. This includes invoices for products and services for the business, office rent and your phone bill—and any scheduled payments on any business loans or credit lines.
• Be sure to be current on any business taxes that are due.

Today, lenders increasingly use real-time data and alternative credit metrics, such as cash flow analytics and digital payment history, when evaluating business creditworthiness. Monitoring your business credit report regularly through online dashboards can help you stay ahead of any issues.

Whether you’re a large company or a small business, your business credit card has the potential to fuel growth. Learn more about Fifth Third Bank’s business credit card solutions¹ and schedule an appointment to apply for a business credit card today.