Can You Get a Business Credit Card Without a Business?

Business credit cards offer some unique perks you can’t always get with personal credit cards, including bigger sign-up bonuses and specialized rewards categories. But are you eligible for a business card if you work for yourself as an independent contractor, freelancer or if you have an occasional side hustle?

In most cases the answer is yes. To get approved for a business credit card, you simply need to earn some money independently. Here’s what you need to know about applying for a business credit card when you don’t have a traditional business.

Qualifying work for a business credit card

You may be more of an entrepreneur than you think. Any income-producing endeavor can be considered a legitimate business for a business credit card. Just a few examples of common non-traditional business ventures include:

• Running a dog walking business in your neighborhood
• Buy and sell on eBay
• Working as a virtual assistant
• Driving for ridesharing apps like Uber or Lyft
• Own and rent rental properties
• Food delivery with app-based companies like DoorDash or Grubhub
• Teaching children in person or online
• Buying and selling antiques
• Independent consultancy work
• Selling homemade goods at markets or online (such as on Etsy or Facebook Marketplace)
• Works as an entertainer
• Freelance writing and editing
• Construction of websites
• Social media management

Simply put, if you make money from the work you do, you may qualify for a business credit card. You do not need to have a registered LLC or corporation to apply for a business credit card. If you come across a section on the credit card application that asks for your “business tax ID number,” you can list yourself as a sole proprietor and enter your Social Security number instead of a tax ID number.

Requirements for business credit cards

If you have a registered business, including an LLC, you must apply for a new business credit card using your business information. This includes using your federal tax identification number, also called an Employer Identification Number (EIN). If you run your business without a formal business setup, you can simply apply as a sole proprietor with your CPR number instead.

Either way, prepare to submit the following information*:

• The legal name of your business and the business name you want on the card (this can only be your name if you are a sole proprietor)
• Your annual business income
• Monthly business expenses
• Age of your business since inception
• The industry your company is in
• The business structure (eg, LLC vs. corporation vs. sole proprietorship)
• Your role in the company
• How many employees do you have (if any)
• Your business address, even if it is your home address
• Your business phone number, even if it’s your personal phone

*Note that not all of this information is required by the credit card issuer at the time of application.

Depending on the card, you may need to send documentation to prove you have a business. This may include information from the Internal Revenue Service that proves your tax identification number or income information. However, in most cases you will receive notification of approval within a few seconds of applying online.

Can you get a business card without business income?

Yes, you can get a business card if your business has not yet generated any revenue. Issuers understand that new businesses may not have business income yet, so be honest if you’re just starting out and haven’t generated income. That said, even if your income seems small—you’ve only sold a few hundred dollars worth of goods, for example—you should list that income on your application.

Remember, getting approved for a business credit card may not be as difficult as it seems. Many activities can be considered a small business. If you regularly perform services or sell goods at a profit and can prove that you have both sales and expenses, you may qualify for a business credit card. Small businesses can include anything from running an active Etsy shop to driving for rideshare companies.

Why get a business credit card instead of a personal credit card?

There are a number of different reasons to get a business credit card for your business, including the following:

Rewards on business expenses

Chances are you have some business-related expenses that you could earn travel rewards or cash back on. For example, as a carpool or delivery driver, you may have to cover your own gas as well as pay for maintenance and repairs on your vehicle. If you’re selling crafts or art, you’ll probably need to buy supplies.

Whatever your costs are, you can earn cash, points or miles if the card has a rewards program. If the account offers a sign-up bonus for new cardholders, you may be able to earn additional rewards by meeting a minimum spend requirement within the first few months of account opening.

Keep personal and business expenses separate

Maintaining separate business and personal credit cards can help you stay organized. Not only will you have better control over your spending, but having all your expenses on the company credit card will help you when you need to reconcile your books and pay your taxes.

Build your business credit score

While your personal credit score is taken into account when you apply for a business credit card, you create a business credit history when your credit issuer provides data to the three major commercial credit bureaus – Dun & Bradstreet, Equifax and Experian.

By keeping your accounts in good standing, your business credit score will improve over time, increasing your eligibility for other business credit products in the future.

Business benefits

Many of the best business credit cards offer specialized perks, such as cell phone insurance and cash credits for business-related products and services. It pays to get the right card for your business.

Can you use a business credit card for personal expenses?

Using a business credit card for personal expenses is not against the law; However, doing so may violate the terms of your card agreement, which could result in fines. These consequences may include:

• Closing your account: You will likely have to sign an agreement not to use your business credit card for personal charges. The agreement may stipulate that if you violate these terms, the issuer may choose to cancel your card.
• Personal responsibility: Mixing your personal and business finances can result in you taking on personal responsibility for any business debts in the event of legal complications. It can allow the courts to disregard the separation between you and your business, potentially holding you personally liable for your business’ obligations.
• Tax consequences: Business credit cards typically carry increased fees and interest compared to personal cards. But these higher costs often come with a benefit: Most interest expenses and fees incurred from business transactions are tax deductible along with the business-related expenses. Conversely, personal purchases lack this tax-deductible benefit, resulting in no financial return. So if you use your business credit card for personal expenses and carry a balance, it will likely incur higher long-term costs.
• Effects on both business and personal credit scores: Using your business credit card for personal transactions in hopes of improving your consumer credit score may be tempting, but it’s unlikely to be helpful. Most business credit cards only report positive card activity to business credit bureaus, meaning any responsible habits with your business credit card are unlikely to reflect in your consumer credit score. However, issuers sometimes report negative business card activity to personal credit bureaus, so your personal credit score can be adversely affected.
• Limited consumer protection: Using a business credit card instead of a personal one may result in the loss of specific legal protections you enjoy when using a consumer card – including protection against sudden interest rate increases without prior notice, prohibition of interest rate increases on outstanding balances, prohibition of sudden interest rate increases without prior notice. interest on debts paid on time and allocating payments to balances with the highest interest first.

If you mistakenly charge a personal expense to your business card, notify your accountant or bookkeeper and flag the transaction to exclude it from your company’s financial records.

What to look out for on a business credit card

Although business credit cards offer plenty of benefits, there are a few potential drawbacks. Often, the business credit cards with the most perks charge high annual fees. For example, The Business Platinum Card® from American Express comes with a hefty annual fee of $695. But if you’re unsure how often you’ll charge your card for purchases or whether you’ll really use the perks, consider a business credit card with no annual fee.

Before applying for a card, consider the pros and cons of several of the best business credit cards so you can decide which best meets the needs of your unique business — whether your work involves road trips, creative work, e-commerce, airline travel or something else.

Of course, every card you are dealt must be handled properly, and management takes time and attention. Regardless of the size of your business, it’s best to maintain a low balance so fees don’t eat into your profits and always pay your monthly bill on time to protect your business credit rating.

Bottom line

Business credit cards can offer business owners more perks and better rewards on business-related expenses. They also tend to offer higher welcome bonuses and can help your business build its own credit score. Most importantly, using a business credit card for legitimate business expenses makes it easier for you to separate your business and personal finances.

Although you must have a legitimate business to be approved, getting a business credit card may not be as difficult as it seems. Many small business ideas and side hustles allow you to qualify for a business credit card.

With so many benefits and perks, business credit cards can be just what you need to manage your costs while making your work life easier and more profitable. Whether your business is a casual, part-time gig or a full-time freelance business, choosing the right business credit card will help you stay on track and get ahead.