Reader question: Do I need a business to get a business credit card?
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Editor’s note: This post has been updated for clarity and accuracy. It was originally published on April 3, 2018.
This is a Reader Question submitted to TPG Senior Points & Miles Contributor Ethan Steinberg.
There are all sorts of travel credit cards (hotel cards, airline cards, etc.) and most fall into one of two categories — personal or business. Nearly anyone can apply for a personal credit card, but TPG reader Mohammad wants to know if he can get a business credit card:
I want to open the Chase Ink 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
A business credit card makes a whole new set of sign-up bonuses and category bonuses possible. 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 Ink Business Preferred℠ Credit Card is currently offering one of the best sign-up bonuses around — you’ll receive 80,000 points after spending $5,000 on purchases in the first three months. The Ink Business Preferred card also offers solid bonuses on purchases including shipping, internet and online advertising — areas that many personal cards don’t cover. The Ink Business Cash℠ Credit Card is another great business card. It currently features a $500 sign-up bonus (in the form of 50,000 Ultimate Rewards points) after $3,000 in spend in the first three months, with 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 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 number.
However, it’s extremely important that you tell the truth when applying for a business card. Banks 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 of 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 different sign-up bonuses, travel credits, airport lounge access and other perks.
As always it’s important to consider other factors when signing up for cards — make sure you do your due diligence and research before applying for a credit card.
Featured photo courtesy of Shutterstock.
Additional reporting by Jason Stauffer.
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.
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
- 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®
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