9 reasons to get a business credit card
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
Update: Some offers mentioned below are no longer available. View the current offers here.
Many of the credit cards currently on the market that are geared toward businesses carry rewards and benefits that are just as great — and sometimes better — than the personal credit cards that are out there, including huge sign-up bonuses, category spending bonuses and tons of other perks. However, many people seem hesitant to apply for them, or might not realize they’re eligible. Today, we’re going to look at the top reasons why you should consider adding a business credit card to your wallet.
You don’t need a large business to get one
This seems to trip up a lot of people who think that you need an incorporated business with its own tax ID number or employee identification number (EIN) in order to apply for a business credit card. While you should aim to use your business credit card for business-related expenses, each credit card company has a different threshold for what information it requires for someone to get a business card.
Some, like Amex, 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 out as simple DBAs (Doing Business As), which simply denotes a business name used by a person or entity that is 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 business credit card.
If you’re starting a small company as a sole proprietorship, you can just provide your Social Security number when asked for an EIN and usually that suffices. In most cases, you don’t need any paperwork to form a sole proprietorship, you simply become one by doing business.
Business credit cards don’t sit on your personal report
I want to start by clarifying that you do get a two- to five-point hit on your personal credit score when you apply for a business credit card, since banks use your personal credit report to assess your creditworthiness and these cards are still 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.
This is good if you run big balances on 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 those cards are guaranteed by your personal credit.
The other bonus is that you can apply from business card from most issuers without it affecting your 5/24 status with Chase, since the new account won’t show up on your personal credit report.
Keeping expenses separate
It’s easy to shove all of your expenses, both personal and business, onto the same credit card for convenience’s sake, but 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 an added bonus, many business credit cards make it easy to export your transaction history to Quickbooks or other accounting software.
Double-dip on welcome bonuses
If you already got the bonus on the Citi® / AAdvantage® Platinum Select® World Elite Mastercard®, you could also go after the CitiBusiness® / AAdvantage® Platinum Select® Mastercard®. If you’re in the market for new business credit cards, you can check out our list of top current offers.
The information for the Citi AAdvantage Platinum card and CitiBusiness AAdvantage Platinum card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Access different bonus categories
- 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 made from select technology providers
You also have the Ink Business Preferred Card, which offers 3x on your first $150,000 in combined purchases (then 1x) in the following categories:
- Travel, including airfare, hotels, rental cards, train tickets and taxis
- Shipping purchases
- Internet, cable and phone services
- Advertising purchases made with social media sites and search engines
Simply put, business owners have different needs than consumers do. Many banks 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 a number of cards with great purchase protection and return protection, so your business won’t be financially responsible if you buy expensive products that are lost or damaged.
Establishing a business credit history
More spending power
Business credit cards often come with higher lines of credit, which is how many small businesses get off the ground. Just remember, especially with business charge cards, you need to pay the bill off in full every month or else you’ll incur huge fees, which will likely negate the value of the points/miles accrued.
While you might think that your business is in the early days and you don’t need a credit card, business credit cards can provide important benefits to your company, including rewards for free travel, expense management and credit to grow your business. While you could get by in your personal life using a debit card or cash, leveraging the right credit card provides so many more benefits.
Featured photo by Kelly Sikkema/Unsplash.
Welcome to The Points Guy!
WELCOME OFFER: 60,000 Points
TPG'S BONUS VALUATION*: $1,200
CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
- Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 when you redeem through Chase Ultimate Rewards®. Plus earn up to $50 in statement credits towards grocery store purchases.
- 2X points on dining at restaurants including eligible delivery services, takeout and dining out and travel & 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for travel through Chase Ultimate Rewards®. For example, 60,000 points are worth $750 toward travel.
- With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash's subscription service. Activate by 12/31/21.
- Earn 2x total points on up to $1,000 in grocery store purchases per month from November 1, 2020 to April 30, 2021. Includes eligible pick-up and delivery services.