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Who qualifies for a business credit card?

Feb. 18, 2022
7 min read
A freelance writer works from home.
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Editor’s note: This is a recurring post, regularly updated with new information.

If you are trying to make a profit by selling goods or services, you have a business. It doesn’t matter if you’re pet sitting, working a freelance job remotely or managing multiple employees and leasing a storefront. And since you qualify as a small-business owner, you are eligible for a business credit card.

Still unsure if you qualify? Keep reading to learn more and to see who can apply for a business credit card.

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How do business credit cards work?

(Photo by 10'000 Hours/Getty Images)

A business credit card is a way for small-business owners to keep track of their business expenses and manage their day-to-day operations. It helps keep your business expenses separate from your personal spending. It also provides easy access to a line of credit, which is especially useful to the small-business owner who may not have the capital to get a business idea up and running. The increased cash flow can also help cover changing inventory as well as seasonal or unexpected expenses.

Business credit cards have numerous features that can make owning and operating a small business a little easier. In addition to helping you keep track of your expenses, they generally come with employee cards that may let you set individualized spending limits.

Compared to personal credit cards, business credit cards usually offer higher credit limits and rewards as well as perks tailored to the small-business owner. Small-business owners who use business credit cards responsibly are able to build business credit while taking advantage of generous welcome offers, increased cash-back and travel rewards, as well as enhanced benefits that help keep your business running smoothly.

Related: 9 reasons to get a business credit card

Who can apply for a business credit card?

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

There are four common business structures:

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  • Sole proprietorship.
  • Partnership.
  • Corporation.
  • Limited liability company.

No matter the business structure, anyone who operates a business can apply for a business credit card. And you don't need to have an existing business credit history before you can apply. Credit card issuers will look at your personal credit history and credit scores.

People who aren’t sure if they qualify for a business credit card are typically sole proprietors. These are entrepreneurs who take on the challenge of owning and operating their own business. Their business is unincorporated, and they are solely responsible for the profits, debts and losses of the business.

It’s not surprising that some sole proprietors don’t know for sure if they qualify for a business credit card. Unlike LLCs and other business structures, sole proprietors don’t have to take any formal steps to become a sole proprietor.

To help clear up any confusion, let’s take a look at three types of sole proprietors and some common businesses that fall under each.

Read more about how to get a business credit card:

Self-employed business owners

Babysitting isn't all fun and games - it's driving, cooking, and more. (Photo via Getty Images)
(Photo via Getty Images)

When you’re self-employed, you work for yourself instead of working for an employer. You set your own hours and pay yourself from the profits of your business. Self-employed business owners typically provide their goods and services to the general public as opposed to a specific client.

Self-employed business owners can include:

  • Online sellers.
  • Vacation rental hosts.
  • Home bakers.
  • Notary publics.
  • Farmers.
  • Bloggers.
  • Woodworkers.
  • Consultants.
  • Babysitters.

Freelancers and independent contractors

A freelance worker, or independent contractor, is also a self-employed business owner. You can still set your own hours and decide what projects you work on. But unlike other self-employed business owners, you are hired on a contractual basis to perform a service or provide goods. You give up some control over your work, as the person who hires you has some say over how their projects are completed.

Freelancers and independent contractors can include:

  • Freelance writers and journalists.
  • Transcriptionists.
  • Tradespeople (builders, plumbers, electricians, etc.).
  • Real estate agents.
  • Property managers.
  • Web developers.
  • Caterers.

Related: The best credit cards for freelancers

Gig economy workers

(Photo by Getty Images/Katleho Seisa)

Just like freelancers and independent contractors, gig workers are also self-employed. They also are hired on a contractual basis. What can set gig workers apart from other self-employed business owners is the shorter length of time they spend providing goods and services for clients. Most gig workers focus on short-term work or even one-time projects before moving on to the next assignment. They’re also more likely to advertise their services on marketplace platforms or apps.

Gig economy workers can include:

  • Ride-hailing service drivers.
  • Food-delivery drivers.
  • Landscapers.
  • Handymen.
  • Personal trainers.
  • Website content writers.
  • Web designers.
  • Construction workers.
  • Accountants.

Types of business credit cards for small-business owners

When you're ready to choose the right credit card for your business expenses, pay attention to your spending habits.

If you’re just starting your business or don’t have a lot of monthly expenses, a business credit card with no annual fee is a good place to start. You’ll find cash-back rewards business cards that offer a flat rate back on all your business-related expenses as well as cards that provide even higher rewards rates in select areas. This can include gas, restaurants, office supplies and travel.

As your business grows and your monthly expenses increase, you might want to check out the enhanced features and benefits that come with business cards that do charge an annual fee.

For example, some of the best American Express cards are geared toward businesses that spend thousands of dollars every month in general spending and travel. This includes the American Express® Business Gold Card and The Business Platinum Card® from American Express. You’ll pay a $295 annual fee for the Amex Business Gold Card (see rates and fees) or a $695 annual fee for the Amex Business Platinum Card (see rates and fees).

However, both come with impressive welcome offers as well as increased earning rates. When used responsibly, both can provide numerous benefits that can justify the annual fee.

Read more about the Amex Business Gold and Amex Business Platinum cards:

What credit score do you need for the Amex Business Gold Card?
Who is eligible for the Amex Business Platinum Card?
Maximize your earning with the Amex Business Gold
Card showdown: Amex Business Gold vs. Amex Business Platinum

Bottom line

There are a lot of advantages to having a business credit card. And now that you know who they're for, you can decide if one is right for you and your business. If a credit card is the smart choice for you, remember you get the most value by paying your bills on time and keeping your debt to a minimum. The less you pay in interest charges and other fees, the more rewarding it is to own a business credit card.

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

Featured image by Shutterstock
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
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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 1,400+ lounges, including Capital One Lounges and our 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 1,400+ lounges, including Capital One Lounges and our 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