Reader question: Do I need a business to get a business credit card?

Mar 24, 2020

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Editor’s note: This post has been updated for clarity and accuracy.

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 what is required to qualify for 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.

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Qualifying for a business credit card

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 different than you might expect. 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.

Photo by Hero Images / Getty Images
(Photo by Hero Images/Getty Images)

Banks sometimes ask for supporting documentation to prove that you have your own small business or earn income outside of an employer. So it’s extremely important that you tell the truth when applying for a business card.

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 (unless you default on payments, of course).

Related: 9 reasons to get a business credit card

Which business cards to apply for

If you’re thinking about signing up for your own business credit card, take a look at our list of the best 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 several factors when signing up for cards. Be sure you do your due diligence and research before applying for a credit card.

The Ink Business Preferred Credit Card is currently offering one of the best sign-up bonuses around: 100,000 bonus points after you spend $15,000 on purchases in the first 3 months. The Ink Business Preferred card also offers solid bonuses on purchases including shipping, internet and online advertising — categories that many personal cards don’t offer bonus points on.

The Ink Business Cash℠ Credit Card is another great business card. It currently features a $500 sign-up bonus after $3,000 spent in the first three months, with no annual fee. If you have a card that earns Ultimate Rewards points, like the Chase Sapphire Preferred, then you can convert that $500 sign-up bonus to 50,000 points. That provides much more flexibility in terms of redeeming the sign-up bonus for rewards.

The information for the Ink Business Cash and Ink Business Preferred has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Thanks for the question, Mohammed. If you’re a TPG reader who’d like us to answer a question of your own, tweet us at @thepointsguy, message us on Facebook or email us.

Featured photo courtesy of Shutterstock.

Additional reporting by Jason Stauffer.

Chase Sapphire Preferred® Card

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.

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More Things to Know
  • Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
  • 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 60,000 points are worth $750 toward travel
  • Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash's subscription service. Activate by 12/31/21.
  • Earn 5X points on Lyft rides through March 2022. That’s 3X points in addition to the 2X points you already earn on travel.
Intro APR on Purchases
N/A
Regular APR
15.99%-22.99% Variable
Annual Fee
$95
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit
Excellent/Good

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

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.