What Is The Average Credit Limit For Business Credit Cards? (2024)

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A business credit card limit is the maximum amount of money your business can borrow from its credit card issuer at a given point in time. With a business credit card, you can borrow against the same credit limit over and over as long your account remains open and in good standing. But to keep your business credit card in good standing, you must follow certain rules (the terms and conditions found in your credit card agreement).

One of the rules you must follow when you open a business credit card is to not exceed the credit limit on your account. For example, if you qualify for a small business credit card with a $15,000 credit limit, that number represents the highest balance you should ever charge on the account at once.

It’s also typically best to keep the balance well below your credit limit to avoid any potential problems that going over the credit limit could cause. Thanks to the CARD Act of 2009, card issuers can’t charge over-the-limit fees on consumer credit cards unless you opt in to allow those fees. So, if you try to charge a transaction that’s above your credit limit on a consumer credit card, there’s a good chance your credit card company will simply deny it.

However, one of the details you should know before getting a business credit card is that the CARD Act doesn’t apply to these accounts. Some business credit card companies may choose to follow certain CARD Act guidelines on a voluntary basis. Yet it’s important to review terms and conditions, including whether you could be subject to over-the-limit fees or other fees, when you consider any new business credit card account.

The information you provide on your credit card application can help a credit card company evaluate risk and assess how much money your business can comfortably borrow and repay (with interest and fees). Yet with business credit cards, it’s usually not just your company’s details a credit card company wants to review. Your personal details often have an impact on your business credit card limit as well.

Below are four common factors that a credit card company may use to set your credit limit on a business credit card.

• Personal credit. As a small business owner, you’ll typically provide your Social Security number when you apply for a new business credit card. The credit card issuer may request this information for several reasons, including the fact that it wants you to provide a personal guarantee and to evaluate your creditworthiness. Your personal credit report and score can also influence the credit limit you receive. In general, good personal credit makes it easier to qualify for higher business credit card limits. Bad credit, however, could hold you back.
• Business credit. Another detail a credit card issuer may consider when setting your limit on a business credit card is your business credit history and credit score. If you haven’t established business credit yet, don’t worry. A lack of business credit doesn’t necessarily mean you won’t qualify for a new account. (You don’t even need an EIN to apply for many business credit cards.) But if you already have a good business credit score, that factor might work in your favor.
• Income and revenue. Your annual income and business revenue are two additional factors that matter to business credit card issuers as they determine your credit limit. On the personal side, remember you can include household income as long as you have reasonable access to those funds. But don’t over exaggerate company revenue. Even if your company has low or no revenue at the moment, be honest on your application. You can always explain your plans for business growth, if needed.
• Debt. Personal and business debt may also have an impact on the business credit card limits you receive. Credit card usage (also known as your credit utilization ratio) on personal and business credit cards can be especially influential over future credit limits. When you use a lower percentage of your credit card limits, you may qualify for higher credit limits on future accounts. Your credit scores may benefit from this good habit as well.

When you first open a new business credit card, the credit card company will assign you a credit limit. Yet over time you may qualify for credit limit increases either by requesting them yourself or because the card issuer initiates them.

You can contact your credit card company to ask for a higher credit limit on your business credit card at any time. But you may be more likely to qualify for a credit limit increase under the following circ*mstances.

• You consistently pay off your full statement balance (or at least a large portion of your credit card bill each month). Of course, paying off your entire balance each month is best because this habit should help you avoid expensive interest charges as well.
• Your account has been open for at least six months. Accounts that are too new may not be eligible for a credit limit increase depending on the business credit card issuer.
• Business revenue has increased. If your company is making more money, it might be eligible for a higher credit limit than it qualified for in the past. Depending on the size of the new credit limit you request, however, you might need to provide financial documentation to your card issuer to support your request.

The average credit limit for a business credit card is generally higher than the average personal credit card limit. But depending on your business borrowing needs, you may want to try to put your company in a position where it has access to even higher credit limits down the road.

Higher credit limits could provide additional cash flow and purchasing power for companies with higher expenses. Additional access to credit could give small business owners the opportunity to earn more cash back or rewards on purchases they need to make anyway.

Of course, no matter how large or small your business credit card limit may be, it’s important to manage your accounts with care. On-time payments are essential, especially when it comes to maintaining good credit scores. And if you want to avoid paying high-cost interest charges, you should also follow the good habit of paying off your business credit card balance in full each billing cycle.