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8 reasons to get a business credit card

Feb. 17, 2022
10 min read
Small business owner hands card back to customer.
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Editor’s note: This is a recurring post, regularly updated with new information.


Many business credit cards offer rewards and benefits that are just as great as — and sometimes better than — those offered by the best personal credit cards.

Business cards often post huge sign-up bonuses, include unique category spending bonuses and offer many kinds of other perks.

However, some people seem hesitant to get a business card, even if they’re eligible to apply for a business credit card. Don't assume that not owning a formal business means that you can't have a business credit card, though. In fact, even if you're a freelancer or just starting a side hustle, there are plenty of great reasons to add a business credit card to your wallet.

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You don’t need a large business to get one

Dog walkers are among those who can apply for a business credit card. (Photo by Sam Wordley/Shutterstock)

This seems to trip up many people who think you need an incorporated business with its own tax ID number or employee identification number, or even a brick-and-mortar store, to apply for a business credit card. That's just not the case, though. In fact, you might be eligible for a business credit card without even knowing it.

While you should aim to use your business credit card for work-related expenses, each credit card issuer has a different threshold for what information it requires for someone to get a small business card.

Some, like American Express, are very flexible. Chase is generally the toughest, often requiring proof of your business, including government EIN and business checking account information.

However, many small businesses start as simple DBAs (doing business as), which denotes a business name used by a person or entity different from the person’s or entity’s true name. So if you start a small eBay business and want to keep those finances separate from your personal expenses, it would be conceivable that you’d want a small business credit card.

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If you’re starting a small company as a sole proprietorship, you can provide your Social Security number when asked for an EIN, and usually, that will suffice. In most cases, you don’t need any paperwork to form a sole proprietorship; you become one by simply doing business.

Related: What name should I put on my business credit card application?

Business credit cards don’t sit on your personal report

Business credit card applicants typically experience a two- to five-point hit on their personal credit scores when they apply for a business credit card, since banks generally use your personal credit report to assess your creditworthiness. That's because these cards are still usually personally guaranteed.

However, other than this initial credit inquiry, the business line of credit sits separately from your personal credit line, so your utilization ratio and other factors shouldn’t affect your personal credit score.

That's good news if you run big balances through your business cards, since it won’t damage your personal credit score. Just be careful, because if you default on a business credit card, the issuer can come after you personally — since your personal credit guarantees those cards.

The other bonus is that you can apply for a business card from most issuers without affecting your 5/24 status with Chase, since the new account won’t show up on your personal credit report.

Keeping expenses separate

(Photo by kitzcorner/Shutterstock)

It’s easy to charge all of your expenses, both personal and business, on the same credit card for convenience.

Still, it’s important to keep your personal expenditures separate from your business ones — especially when tax season draws nigh. Having a separate business credit card makes tracking expenses easy, and you’ll pay less in accounting fees if your accountant doesn’t have to sort through personal versus business expenses (plus, it’s easier to get everything straightened out if you ever get audited by the IRS).

As a bonus, many business credit cards make it easy to export your transaction history to QuickBooks or other accounting software.

Related: Paying taxes with your credit card in 2022

Double dip on intro offers

Use the sign-up bonus or welcome offer on your new business card to book airline flights. (Photo by Robert Alexander/Getty Images)

Applying for business credit cards allows you to go for a whole new set of welcome offers.

For instance, you might already have scored the intro offer on the Chase Sapphire Preferred Card or the Chase Sapphire Reserve. So in order to keep racking up Ultimate Rewards points, you might want to consider the Ink Business Preferred Credit Card, which is offering 100,000 bonus points after you spend $15,000 on purchases in the first three months (with a $95 annual fee). In fact, that's the highest bonus of any Chase card at the moment.

There’s also the welcome offer on The Business Platinum Card® from American Express — with a $695 annual fee (see rates and fees) — which currently sits at 120,000 bonus points after you spend $15,000 on eligible purchases within your first three months of card membership. It’s no wonder the Business Platinum Card is TPG readers' favorite business card.

If you already got the bonus on the United Explorer Card, you could turn instead to the United Business Card, which is currently offering 75,000 bonus miles after you spend $5,000 on purchases in the first three months your account is open. Plus, $0 introductory annual fee for the first year, then $99.

The list goes on and on, so a good place to start is looking at the cards you currently carry and seeing if any of them have business counterparts that might be good options for your budget and spending habits.

Maximize different bonus earning categories

Earn 4x points per dollar spent on restaurants if it’s one of the two top monthly spending categories on the Amex Gold Business card. (Photo by Kirill Guzhvinsky/Shutterstock)

While you’ll find many business cards with travel or dining bonus categories that overlap with personal credit cards, you’ll also find many unique categories clearly geared at businesses and not consumers.

Take the American Express® Business Gold Card — with an annual fee of $295 (see rates and fees) — which accrues 4 points per dollar in the two categories you spend the most in each month from the following list, on the first $150,000 in combined purchases each calendar year (then 1 per dollar):

  • Airfare purchased from airlines.
  • U.S. purchases for advertising in select media.
  • U.S. purchases for shipping.
  • U.S. purchases at gas stations.
  • U.S. purchases at restaurants.
  • U.S. purchases of computer hardware, software and cloud systems from select technology providers.

You also have the Ink Business Preferred Card, which earns three points per dollar on your first $150,000 in combined purchases (then 1 per dollar) each account anniversary year in the following categories:

  • Travel, including airfare, hotels, rental cars, train tickets and taxis.
  • Shipping purchases.
  • Internet, cable and phone services.
  • Advertising purchases made with social media sites and search engines.

Many of these categories don't overlap with those of personal cards, making business cards great for maximizing your earning.

Business perks

(Photo by Pornchai Jaito/EyeEm/Getty Images)

Business owners often have different needs than consumers do. Many issuers offer some form of transaction or expense management on business credit cards to help keep you organized, and some even offer free employee cards, which can help you rack up rewards even faster.

You’ll also find several cards with great purchase protection and extended warranties, as well as still-unique coverage like cell phone protection, so your business won’t be financially responsible if you buy expensive products that are lost or damaged.

More cards

Although many banks decide how many credit cards you can have based on your overall credit line limit, some banks also simply limit the number of cards you can have open. For example, you can typically only have five credit cards with Amex at any given time.

However, the limit for cards like the Amex Business Platinum is separate, which means you can expand your company's buying power and rack up some great introductory offers at the same time.

Establishing a business credit history

This one goes hand in hand with the fact that your business credit card’s line of credit doesn’t sit on your personal report.

While you hopefully have a high personal FICO score when you apply for a business card in the first place, once that card is open, its entire record sits separately from your personal credit. However, if your business takes off and you end up applying for financing (for equipment purchases, real estate or other large expenses), banks will look at your business credit history when determining your interest rate, and the more established your line of credit, the better rates you’re likely to get.

Related: Your guide to applying for small-business credit cards

More spending power

Business credit cards often come with higher credit lines than personal ones, which is how many small businesses get off the ground. Just remember that some business cards are charge cards rather than credit cards, which means you must pay your bill off in full every month or else you’ll incur potentially high fees, which will likely negate the value of the points or miles you accumulate.

Bottom line

While your business might be in its early days and you may not think you need a separate credit card for it, business credit cards can provide important benefits to your company, including rewards you can use for virtually free travel, perks like expense management, and credit to help you grow your business.

While you could get by in your personal life using a debit card or cash if you really wanted to, leveraging the right credit card for your small business provides many more benefits.

For rates and fees of the Amex Business Platinum card, click here.
For rates and fees of the Amex Business Gold, click here.

Additional reporting by Ed Pizzarello and Eric Rosen.

Featured image by Getty Images
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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TPG featured card

Best card for premium perks while traveling
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards

2 - 10X points
10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
2X2 Miles per dollar on every purchase, every day

Intro offer

75,000 bonus miles
Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

Annual Fee

$395

Recommended Credit

740-850
Excellent
Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,300+ lounges, including Capital One Lounges and the Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023
Best card for premium perks while traveling
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
2X2 Miles per dollar on every purchase, every day
  • Intro Offer
    Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

    75,000 bonus miles
  • Annual Fee

    $395
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    740-850
    Excellent

Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,300+ lounges, including Capital One Lounges and the Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023