9 reasons to get a business credit card

Editor’s Note: This is a recurring post, regularly updated with new information.

Much credit card business offers great rewards and benefits like – and sometimes better – those offered by best personal credit card.

Business cards usually have big signup bonusincluded only spending bonus categories and offers a variety of other perks.

However, some people hesitate to accept business cards, even if they are eligible to apply for a business credit card. Don’t assume that not owning a formal business means you can’t have a business credit card. In fact, even if you are a freelancer Or just starting a side business, there are plenty of great reasons to get a business credit card and add it to your wallet.

You don’t need a big business to get business cards


This seems to lead many people to think that you need an incorporated business with its own tax or employee identification number, or even a brick-and-mortar store, to apply for a business credit card. That is not the case. In fact, you can Eligible for a business credit card without even knowing it.

While you should aim to use your business credit card for work-related expenses, each credit card issuer has a different threshold for what information someone needs to receive. small business card.

some, like American Expressvery flexible. Chase is generally the most difficult, often requires proof of your business, includes government EIN and business checking account information.

However, many Small business begins as a simple DBA (do business as), denotes a business name used by a person or entity other than the person or entity’s real name. So if you’re starting a small business on eBay and want to keep those finances separate from your personal expenses, it’s conceivable that you want a small business credit card. .

If you’re starting a small company as a sole proprietorship, you can provide your Social Security number when asked for an EIN, and that’s usually enough. In most cases, you don’t need any paperwork to set up a sole proprietorship; you become one by simply trading.

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Related: What name should I put on my business credit card application?

Business credit cards don’t sit on your personal statement

Business credit card applicants typically experience two to five points hit their personal credit score when they apply for a business credit card, as banks often use your personal credit report to gauge your creditworthiness. That’s because these cards are usually still personally guaranteed.

However, beyond this initial credit request, your business credit line is separate from your personal line of credit, so usage rates and other factors won’t affect your personal credit score. your multiplication.

That’s good news if you use a large balance through your business card, as it won’t damage your personal credit score. Just be careful, because if you default on a business credit cardthe issuer may go after you personally — because your personal credit guarantees those cards.

Another bonus is that you can apply for business cards from most issuers without affecting yours. Status 5/24 with Chase because the new account won’t show up on your personal credit report.

Keep expenses separate


It’s easy to calculate all your expenses, both personal and business, on the same credit card for convenience.

However, it is important to keep your personal expenses separate from your business expenses – especially as tax season approaches. Having a separate business credit card makes it easy to keep track of your expenses, and you’ll pay less in accounting fees if your accountant doesn’t have to sort out personal and business expenses (besides It’s easier to clear things up if you’ve been audited by the IRS).

Additionally, many business credit cards make it easy to export your transaction history to QuickBooks or other accounting software.

Related: Should you pay taxes by credit card?

Double Welcome Bonus

Signing up for a business credit card entitles you to a whole new set of welcome offers.

For example, you may have scored a welcome bonus on Chase Sapphire Priority Card or Chase Sapphire Reserve. So, to continue accumulating Ultimate Rewards points, you may want to consider Ink . Business Preferred Credit Card, is offering 100,000 bonus points after you spend $15,000 on purchases in the first three months after account opening. (with an annual fee of $95).

There is also a welcome offer on Business Platinum® Card from American Express — with an annual fee of $695 (see rates and fees) — now 120,000 bonus points after you spend $15,000 on qualifying purchases within the first three months of your card membership.

If you have earned a bonus on United Explorer cardyou can switch to . instead unified business card, which currently offers 75,000 bonus miles after you spend $5,000 on purchases in the first three months your account is open. Also, it has an annual referral fee of $0 for the first year, then $99.

The list goes on and on, so a good place to start is to look at the cards you currently carry and see if any of them have a business partner that might be a good choice for you. your budget and spending habits or not.

Maximize various bonus earning categories


While you’ll find many business cards with travel or dining bonus categories that overlap with personal credit cards, you’ll also find many separate categories that are clearly geared toward businesses, not consumers. use.

take American Express® Business Gold Card — with an annual fee of $295 (see rates and fees) — accumulate 4 points for each dollar in the two categories where you spend the most each month from the following list, on the first $150,000 in combined purchases each calendar year (then 1 point for per dollar):

  • Air tickets purchased from airlines.
  • The United States buys advertising in select media.
  • USA buy goods for shipping.
  • America buys goods at gas stations.
  • America buys goods at a restaurant.
  • The United States buys computer hardware, software, and cloud solutions from select technology providers.

There are also Ink Business Preferred cardEarn 3 points per dollar on your first $150,000 in combined purchases (then 1 point per dollar) on each account anniversary year in the following categories:

  • Travel, including airline tickets, hotels, rental cars, train tickets and taxis.
  • Purchase shipping.
  • Internet, cable TV and telephone services.
  • Promotional purchases are made with social media sites and search engines.

Many of these categories don’t overlap with personal business cards, making business cards great for maximizing your earnings.

business privileges

Business owners often have different needs than consumers. Many issuers offer some form of transaction or expense management on business credit cards to help keep you organized, and some even offer a free employee card that can help you get Faster rewards.

You’ll also find some great cards purchase protection And extended warrantyas mobile phone protectionso your business will not be financially responsible if you buy lost or damaged expensive products.

Add card

While many banks decide how many credit cards you can have based on your overall credit limit, some banks simply limited number of cards you may have open. For example, you can usually only have five credit cards with Amex at any given time.

However, the limit for cards like Amex trading platinum is separate, which means you can expand your company’s purchasing power and get some attractive referral offers at the same time.

Set up business credit history


This goes hand in hand with the fact that your business credit card’s credit limit is not on your personal statement.

While you hope to have a high personal FICO score when you apply for a business card in the first place, once that card is opened, its entire record will be separate from your personal credit. However, if your business is successful and you end up applying for financing (to buy equipment, real estate or other major expenses), banks will look at the business credit history. when determining your interest rate and the tighter your credit line is set, the better rates you are likely to get.

Related: 10 considerations for your small business credit card strategy

More spending power

Business credit cards often come with a higher line of credit than personal credit cards, which is how many small businesses get their start. Just keep in mind that some business cards require balances to be paid in full every month, or you’ll incur potentially high fees, which will likely reduce the value of the points or miles you accrue. Okay.

bottom line

While your business may be in its early days and you may think you don’t need a separate credit card for it, a business credit card can offer important benefits to your company, includes rewards you can use to travel for almost free, perks like expense management and credits to help you grow your business.

While you can get around in your personal life using a debit card or cash if you really want to, getting the right credit card for your small business is far more beneficial. .

For Amex Business Platinum rates and fees, click This.
For Amex Business Gold rates and fees, click This.

Additional reporting by Ryan Wilcox, Ed Pizzarello and Eric Rosen.


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