Do I Need a Business 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.
“Reader Questions” are now answered twice a week by TPG Associate Editor Brendan Dorsey.
There are a whole lot of credit cards out there, and most fall into one of two categories — personal or business. While nearly anyone can apply for a personal credit card, TPG reader Mohammad wants to know if he can get a business credit card…
I want to open the Chase Ink and the Amex SPG business credit card, however I don’t really have a business open, but I have sold some old stuff on Ebay in the past. Legally, is it possible for me to open a business card?TPG Reader Mohammad
Applying for a business credit card opens up a whole new set of sign-up bonuses and category bonuses to consider. It’s also a great way to keep your business and personal expenses separate, and can give small businesses the spending power they need to grow.
The Chase Ink Preferred is currently offering one of the best sign-up bonuses around, where you’ll receive 80,000 points after spending $5,000 in the first three months. It also offers solid bonuses on purchases like shipping, internet and online advertising — all areas that many personal cards don’t cover. The Ink Business Cash Credit Card is another great business card, currently featuring a $500 sign-up bonus (in the form of 50,000 Ultimate Rewards points) after $3,000 in spend in the first 3 months and no annual fee.
So, does Mohammad have to own an actual business to open a business credit card? Well, yes, you do need a business to open a business credit card. But it’s important to define what exactly is a “business?”
The qualifications for having a business may be lower than you think. Do you sell items on Amazon, eBay or Craigslist? Do you teach music or sports? Ever act as a freelance writer or photographer? If you sell any goods or services, that could qualify you as a business owner.
But if you’re in one of these businesses, how do you go about explaining that on a credit card application? Well, you don’t have to have a registered business like an LLC or a corporation to apply. In fact, when applying for a business credit card, there will be a section asking what kind of business you own, and also requesting your business tax identification number. If you’re just in business on your own, you can choose to answer that you’re a sole proprietor, and in most cases you can enter your social security number as your tax ID/EIN.
That being said, it’s extremely important that you tell the truth when applying for a business card, so do not lie on a business credit card application. Banks can sometimes ask for supporting documentation to prove that you have your own small business or earn income outside of an employer.
Applying for a business card will also result in a hard pull on your credit report, and banks will look at your personal credit score when considering you for a business card. But once you have a business card, that line of credit will be separate from your personal one, so actions on a business account generally won’t affect your personal score (that’s unless you default on payments, of course).
If you’re thinking about signing-up for your own business credit card, take a look at our list for the best small business credit cards. You’ll find there are some cards that closely mimic the matching personal versions, and other products that are completely different, offering varying sign-up bonuses, travel credits, lounge access and other perks.
As always it’s important to consider other factors when signing up for credit cards — make sure you do your due diligence and research before applying. These articles can help get you started:
- 5 Things To Understand About Credit Before Applying For Cards
- 3 Key Considerations for Improving Your Credit Score
- Debunking Credit Card Myths: Does Applying For A Card Permanently Impact My Credit Score
- Avoiding Late Payments and Other Silly Credit Card Mistakes
Photo by Justin Sullivan/Getty Images.
WELCOME OFFER: 80,000 Points
TPG'S BONUS VALUATION: $1,600
CARD HIGHLIGHTS: 3 points per dollar on the first $150,000 in combined spending on travel, shipping purchases, internet, cable and phone services, and advertising purchases made with social media sites and search engines.
- Earn 80,000 bonus points after you spend $5,000 on purchases in the first 3 months from account opening. That's $1,000 toward travel when you redeem through Chase Ultimate Rewards®
- Earn 3 points per $1 on the first $150,000 spent on travel and select business categories each account anniversary year
- Earn 1 point per $1 on all other purchases–with no limit to the amount you can earn
- Points are worth 25% more when you redeem for travel through Chase Ultimate Rewards
- Redeem points for travel, cash back, gift cards and more – your points don't expire as long as your account is open
- No foreign transaction fees
- Employee cards at no additional cost
- $95 Annual Fee