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Why Business Credit Cards Are Your Ticket To Even More Free Travel


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Updated, January 28, 2020

How to apply for your first credit card

Who can apply for a business card
Why you absolutely need a business card

It may be easy to overlook business credit cards if you don’t have a large business, with lots of expenses and several employees. But you shouldn’t because they can be very valuable.

Why Business Credit Cards Are So Valuable

They Are Not Included In Chases' 5/24 Rule

In the world of Chase’s 5/24 rule, most are not included in your 5/24 number. There are exceptions: The business cards from Capital One and a few others do show up, so stay away these until you have all the Chase cards you can get within 5/24.

They Offer Incredible Sign-up Bonuses

Often, business credit cards have the best signup bonuses and also good category bonuses.

A popular one is the Ink Business Preferred® Credit Card .

The Spend on Business Cards Do Not Show Up In Your Credit Report

Large spends on business cards do not show up in your credit utilization, and so, will not negatively impact your credit score.

This can be confusing–the actual application of the card will ding your credit score in the short term because of the hard credit inquiry, but once the card is approved, any amount you spend on it is not included in your credit use, with some exceptions.

They Often Come With Great Protections

Many business cards come with great protections such as car rental collision coverage, extended warranties, and travel insurance.

Compare small business credit cards here

Who Can Apply For A Small Business Credit Card?

If you have a business, you can apply for a business card. Your business doesn’t have to be registered or licensed–and you don’t have to have an EIN. Side hustles totally count!

Here are some examples of common businesses but the list is endless:

  • House hack
  • Drive for Uber or Lyft
  • Babysit or dog sit
  • Deliver food or packages
  • Do freelance writing or design work
  • Work as a handyman/woman
  • Sell stuff on Etsy

Here’s what you do not need to have to be a small business owner:

  • Significant amounts of income
  • A registered business
  • An office
  • Employees
  • You do not even need an Employer Identification Number (EIN), although that does make applications a little less tricky.

Applying For Your First Business Credit Card

Just as with your personal credit application, a business card will be approved or declined based partly on your personal credit score.

Other factors would be your personal income and annual business income to date.

And just as with your personal credit card applications, you should be candid about your business revenue to date, even if it is not yet significant.

Every new business goes through a start-up stage, and many depend on a line of credit to keep the finances organized and separated from personal accounts.

With any type of side hustle, you shouldn’t feel weird applying for a business credit card. It’s every bit as normal as applying for a personal credit card.

When applying for the first business card, many people report the business as a sole proprietorship and use their Social Security number as the tax ID number on the application.

Some use an Employer Identification Number (EIN) from the IRS instead. It’s basically a tax ID for businesses, and all kinds of business can get one, even sole proprietorships. It can be done in less than 10 minutes online.

You can apply for an EIN here. It’s free and only takes a few minutes.

Anecdotally, we’ve heard that if you have a business with a track record, use the EIN. If you are just starting with a new business, use your Social Security Number.

Final Thoughts

Don’t think just because you don’t have a registered business that you can’t apply for a business credit card. Most people with side-hustles can, even if you don’t make a ton of money yet.

So, whether or not you own your own store, or just write a few freelance articles on weekends, a business card can go a long way in earning you travel rewards.

In the next lesson, we’re going to be talking about how to meet minimum spends on credit cards–and business cards have them too, if you want to earn a huge signup bonus.

If you found this course on travel rewards helpful, you may also enjoy this free illustrated guide, packed with many other ways to get more for your buck and win back your financial independence.

Course content originally produced by ChooseFI was edited/updated by CardRatings for this lesson.