If you’re like most people, you probably think you don’t qualify for a business card and don’t have the foggiest idea how to apply for one, either! But guess what? You probably do!
So, if earning more points for those sandy beach getaways or jetsetting to a vibrant European city for 1/10 of the cost is calling your name, business cards deserve consideration. This article will dive into the ins and outs of whether you're eligible for a business credit card and how to apply for one if you are!
Are You Eligible for Business Cards?
If you have any sort of a side hustle, or an additional way you make money outside of your normal 9-5 - you’re probably eligible to apply for a business credit card as a sole proprietor. You don’t need a sprawling office space, a team of employees, or even an LLC. If you're selling crafts on Etsy, offering consulting services, reselling on Facebook Marketplace, tutoring, or driving occasionally for a ride-sharing company, you’re on the right track. The key is understanding that if you’re hustling for some extra cash - you're eligible to leverage business credit cards.
Business Card Benefits
The business card benefits that most personal cards don’t have…
Higher Welcome Offers:
Business cards often provide higher welcome offers (yay!) and have some pretty awesome category multipliers, allowing you to accumulate points or miles faster. This means more opportunities for reward travel, hotel stays, and other perks.
Less Impact on Personal Credit:
One major advantage of many business credit cards is that they typically do not report on your personal credit the way that personal credit cards do, and they don’t have the same impact on your credit score if you cancel a business card in the future. However, it's important to check with the specific card issuer to understand their reporting policies, and it’s equally important to ensure that you pay your business credit card balances in full, on time, every time.
Chase 5/24 Rule Exception:
If you’re concerned about Chase’s 5/24 rule—which limits approvals if you’ve opened five personal cards in the last 24 months—there’s good news. Most business credit cards don’t count toward this limit, allowing you to apply for additional credit cards to maximize rewards. This is huge for those of us who have a large family and want as many welcome offers as possible!
Enhanced Spending Power:
These credit cards typically come with higher credit limits than personal cards, giving you more flexibility to manage some larger business expenses if you have them.
Expense Management Tools:
Whether you are running a full-fledged business or you want to get your side hustle off the ground, many business cards offer unique tools and integrations with accounting software to help you track and categorize expenses, simplifying tax preparation and budgeting.
Applying for a Business Credit Card Without an LLC
Don’t have an LLC? No worries!
You can still apply for a business credit card as a sole proprietor. Most individuals with a side hustle will qualify under this category simply by using their own name as the business name. Here are some tips when you apply for a business card without an LLC.
Business Name: Use your name as your business name if you don’t have a formally registered business like an LLC, S-Corp, etc.…
Business Structure: Select “sole proprietorship” when asked about your business structure.
Tax Identification Number: Use your Social Security Number (SSN) if you don’t have an Employer Identification Number (EIN).
Annual Revenue: Estimate your annual revenue or input based on your projected ****revenue. It is important to stress here that you are sincere and don’t just throw out something completely unrealistic! For example, if your side hustle is selling homemade bows on Etsy and you only sell 20 a year - don’t put your projected revenue in the 7 figures.
Start Date: There will be a spot on the application that asks when your business started - just enter the best-estimated date when you began your side hustle or small business.
This process allows freelancers, independent contractors, side hustlers, and more to access business credit cards without an official LLC designation. Although it’s rare, you may be asked to prove that you indeed do have a side hustle. Be ready to provide a solid explanation of your operation if/when asked, and don’t be ashamed if it is selling things on Facebook Marketplace. Just have the information ready to show that it is something you actually do. And, of course, maintaining a good personal credit score will be advantageous, as it plays a role in how the credit card issuer looks at your application.
Choosing the Right Business Card
Selecting the right business credit card for you is important. Spend some time researching and identifying a card that aligns with your spending habits, travel aspirations, and budget. Look for cards that offer generous sign-up bonuses, have high earning rates on categories you frequently spend in, and travel perks that fit your needs.
For example, if you are on a tight budget and just starting with your side hustle, then the Business Platinum Card® from American Express may not be the right card for you. Instead, you may want to look at the Ink Business Unlimited® Credit Card, which doesn’t have an annual fee, or consider the all-around solid Ink Business Preferred® Credit Card.