Why apply for a small business credit card?
February 17, 2020
If you’re like me, you’ve probably seen amazing offers for cards like these and get really excited. Only to read the word ‘Business’ and dismiss it. You might say to yourself, “I don’t own a business.” This might be true in the legal sense. But it doesn’t mean you can’t get a business credit card. You don’t need a brick and mortar establishment or multiple employees. Being a business owner these days includes selling things on eBay or Craigslist, driving an Uber or Lyft, dog-walking, freelance graphic design, and anything that you can claim to make income. If you do any of these, you are technically a sole-proprietor. This can make you eligible for a business credit card.
How do you apply for one?
Business credit card applications are a bit different than personal cards. Different issuers ask different questions. They will ask basic questions about your business including:
- Legal Business Name – Use your name if you are a sole proprietor. Or use the ‘Doing Business As’ name you have chosen in your legal filings with the IRS. Do not make one up if you haven’t applied for it.
- Business Name on Card – This name will appear on the card under your name.
- Business Address – This can be your home address if you haven’t officially applied for your business.
- Tax ID Number – This can be your SSN if you haven’t applied for a TIN or an EIN (Employee Identification Number). Getting an EIN is really easy and can be done online (https://www.irs.gov/businesses/small-businesses-self-employed/how-to-apply-for-an-ein).
- Number of Employees – You are an employee so this should be at least 1.
- Years in Business – This can be ‘0’ if you just started.
- Annual Business Sales/Revenue – This can be projected Sales/Revenue if you’ve just started.
- Industry Information – This is just general information about what the business does.
Afterward, they will ask for some personal information that will look similar to a regular application. This will include Name, DoB, Phone Number, and Annual Income.
What happens if you don’t get approved?
Don’t be discouraged if you don’t get an immediate approval like most personal card applications. The application might be pending for further review. The issuer might want to verify a few details over the phone. If you do get denied, it’s worth calling their reconsideration line to discuss any particular reasons why it was denied. I have found that these agents are very reasonable. You can explain why you are applying and talk more about your business. Every situation is different so I would recommend just being honest and sincere about your application.
How to use your business card once it’s been approved and activated?
It’s encouraged to split your personal and business expenses to keep your books in order. But that being said, there is a grey area for what can be considered a business expense. For yours truly, the blog/website/consulting is my business. I write about food, travel, and consult on travel hacking. I can technically put all my expenses such as restaurants, flights, and even Amazon purchases on my business card if they relate to my business in any way.
Many of these cards have specific spending bonuses for certain categories such as online advertising, office supplies, and phone/internet services. So be sure to find the card that’s right for you and your business needs.
I’ve just recently got my first business card. As I take ErvTravels to the moon, I want to make sure I’m spending smart and doing it the right way. Business cards are great to add to your portfolio not only for their earning potential but also to diversify and organize your spending. Additionally, most business cards don’t show up on your personal credit report (great for Chase’s 5/24 rule). If you make any kind of money outside your normal day job, you should consider getting a business card to maximize your reward potential.