How to Qualify for Business Credit Card Applications
You can earn lots of points and miles with personal credit cards, but if you qualify for business credit cards, you can grow your points and miles even faster. Here I will outline the benefits of opening business credit cards and guidance about how to apply.
Ease of accounting
If you own a small business, doing taxes can be extra challenging. Keeping your personal expenses separate from your business expenses through a business credit card can help make that process easier.
Business card perks
Many business credit cards have a different set of perks and category bonuses as compared to personal credit cards. One of my favorites is the Chase Ink Business Cash Credit card* that earns 5x on office supply stores, internet and cable up to $25,000/year and has no annual fee. *(friend referral)
Strategy to Stay Under Chase’s 5/24 count
If you are opening a new personal credit card every couple months, you will quickly become ineligible for more Chase credit cards. Following Chase’s 5/24 rule, new applications will be declined if you have opened 5 or more personal credit cards in the last 24 months.
Most business credit cards do not report to the credit bureaus and therefore do not show up on your credit history. (exceptions include some from Capital One, Discover and TD Bank) This can allow you to stay under Chase’s 5/24 count and continue earning sign-up bonuses.
What counts as a Business?
You do not need to have an LLC to open a business credit card. Some entrepreneural activities can simply be selling your children’s used clothes on Facebook Marketplace or Poshmark. Do you babysit or walk dogs? Do you sell baked goods or crafts on Etsy? Even if you are thinking of starting a business and have no annual business revenue you can qualify for business credit cards.
Without an LLC or Federal Employer Identification number (EIN), you would be applying as a Sole Proprietor and use you Social Security Number in the application.
Can I put personal expenses on my business card?
It is your choice as to what expenses you put on your business credit card. For accounting purposes, you may want to keep them separate, especially if you are making a profit above a certain threshold (seek professional accounting advice for this). If you were writing a travel blog, most expenses related to travel could be put on your business credit card.
Business Card Application tips
Above all, be honest on the credit card application. The application will ask for your monthly expenses and annual business revenue. If there is no revenue that is ok. The application will also ask about your household income.
How to apply as a Sole Proprietor
Here is a suggested way to fill out the business credit card application if you are a sole proprietor:
Legal Name of Business: Use your First and Last name, do not make up a different business name
Business Name on the Card: same as above, First and Last name
Does your business use another name? Doing Business As (DBA): no
Tax ID type: Use your SSN here
Business Financials: When started? Annual Revenue & Monthly expenses – give good estimates
Business Category and Type: Choose what is closest to your business
Overall, business credit cards can offer some great category spend options and keep you under Chase’s 5/24 count, so that you can continue to find amazing welcome offers.
