Do You Qualify for a Business Credit Card?

Whether you’re an established enterprise with multiple employees and a brick-and-mortar location, or you’re a work-from-home freelancer with a side gig here and there, chances are you have monthly business-related expenses to cover. While some freelancers, consultants, and other solopreneurs typically cover these expenses with their personal credit cards, you could be missing out on valuable opportunities to get extra perks while paying for business expenditures.

Fortunately, applying for a business credit card is just as easy as applying for a personal credit card. According to the Consumer Financial Protection Bureau, an added benefit is that many business credit cards either do not report your monthly payments to a credit bureau, or they only report transactions and payments to commercial credit bureaus. This means your business credit card likely won’t positively or negatively affect your personal credit score, which can be advantageous for business owners who want to separate their personal and business finances.

How to Increase Your Business Return on Investment

Even if you don’t think you qualify for a business card or you don’t think you need one, consider these possibilities before you miss out on a potentially favorable credit card offer:

Why Apply for a Business Credit Card?

In addition to keeping your business and personal credit reports separate, a business credit card can help you organize your finances more efficiently instead of manually tracking purchases made with your personal credit card(s) or cash. This will save you quite a bit of time on administrative tasks like recordkeeping and billing, especially if your card is synced with an external program like Venmo or PayPal.  

Another benefit of having a business credit card is getting incredible rewards (sign-up bonuses and spending categories). Some business credit cards offer 3% or more points/miles on business expenses (e.g., office supplies, business travel, electronics, utilities, etc.), and others don’t even have an annual fee, making them a low-risk addition to your business financial management practices.

For business owners with employees, you can keep closer tabs on employee spending reports by simply adding them as authorized users on the company’s account instead of asking for copies of receipts and reimbursing them. Some business credit cards charge a nominal fee for adding authorized users, while others let you add a few employees for no extra charge.

Do Sole Proprietorships Qualify for Business Credit Cards?

Contrary to popular misconceptions, business credit cards are not limited to corporations and other traditional notions of what a “business” is. Many credit card companies let sole proprietors use their Social Security numbers instead of an employer identification number on their credit card applications, so you might be surprised by who qualifies for business cards:

  • Drivers for rideshare services like Uber and Lyft
  • Freelance writers, artists, consultants
  • Etsy or eBay sellers
  • Tutors or ESL teachers who work for online-based companies as independent contractors
  • Home-based business owners

In a nutshell, anyone who consistently makes (or attempts to make) a profit beyond their usual employment could qualify for a business credit card. If your sole sources of income come from places where you’re classified as a regular employee, then you likely would not qualify for a business credit card unless you have clear plans to branch out with your own side gig or small business in the future.


Choosing the Right Business Credit Card

There are dozens of business cards to choose from, each with its own unique benefits and downsides. When deciding which business credit card to apply for, you should ask yourself the following questions:

  • What are my top business spending categories?
  • How much do I want/need a 0% introductory APR?
  • What annual fee amount would my business be able to cover?
  • What rewards do I care most about: introductory bonuses, 3-5% cash-back rewards in rotating spending categories, travel perks or consistent point accruals in categories I regularly spend money on?
  • Is there a credit card company I like more than others? (e.g., fans of Chase’s Ultimate Rewards program may want to maximize their UR points by taking out a Chase business card and transferring points to their personal Chase accounts)

Final Thoughts on Applying for Business Credit Cards

You don’t need to have a regular business income (yet) to qualify for a business credit card. However, even if your current business income is $0, you should never lie on an application in case they follow up with more specific questions and possibly requests for your business records.

You should also be prepared to sign a personal guarantee, which says you’ll personally repay any debt acquired by your business – even if the business fails – so banks and credit card providers can shield themselves against the financial risks involved in starting and running a small business.

All in all, having a business credit card is an excellent way to organize your finances, keep your personal and business expenses separate, accumulate more rewards, and grow your business without putting too much of your own personal credit report at risk.


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