HomeBusinessCan You Get A Business Credit Card Without A Business?

Can You Get A Business Credit Card Without A Business?

Key takeaways

  • It’s attainable to get a enterprise bank card with out proudly owning a enterprise in case you earn cash independently, equivalent to by means of freelance writing or driving for rideshare apps.
  • Usually, on your online business card software, you possibly can checklist your self as the only real proprietor within the enterprise tax identification quantity part. Additional, you possibly can checklist your Social Safety Quantity quite than a tax ID quantity.
  • Some card functions could require you to mail in extra paperwork for approval, equivalent to revenue data.

Enterprise bank cards supply some distinctive perks you possibly can’t all the time get with private bank cards, together with greater sign-up bonuses and specialised rewards classes. However are you eligible in case you work for your self as an unbiased contractor or freelancer, or if in case you have an occasional facet hustle?

Generally, the reply is sure. To be accredited for a enterprise bank card you simply have to be incomes some cash independently. Right here’s what you should learn about making use of for a enterprise bank card while you don’t have a conventional enterprise:

Qualifying work for a enterprise bank card

Chances are you’ll be extra of an entrepreneur than you suppose. Any income-producing endeavor may be thought of a legit enterprise for a enterprise bank card. Just some examples of frequent nontraditional ventures embody:

  • Operating a dog-walking enterprise in your neighborhood
  • Shopping for and promoting on eBay
  • Working as a digital assistant
  • Driving for ridesharing apps like Uber or Lyft
  • Proudly owning and leasing rental properties
  • Delivering meals with app-based firms like DoorDash or Grubhub
  • Tutoring children in particular person or on-line
  • Shopping for and promoting antiques
  • Impartial consulting work
  • Promoting selfmade gadgets at markets or on-line (equivalent to on Etsy or Fb Market)
  • Working as an entertainer
  • Freelance writing and enhancing
  • Constructing web sites
  • Managing social media websites

Briefly, in case you earn cash from the work you do, you could possibly qualify for a enterprise bank card. You don’t need to have a registered LLC or company to use for a enterprise bank card. If, on the bank card software, you come throughout a bit asking in your “enterprise tax identification quantity,” you possibly can checklist your self as the only real proprietor and enter your Social Safety Quantity as a substitute of a tax ID quantity.

Enterprise bank card necessities

When you have a registered enterprise, together with an LLC, you’ll apply utilizing your online business data, together with your Federal Tax ID quantity, additionally referred to as an Employer Identification Quantity (EIN). When you run your online business with out a formal enterprise setup, you possibly can merely apply as a sole proprietor along with your Social Safety Quantity as a substitute.

Both manner, put together to submit the next data*:

  • The authorized identify of your online business and the enterprise identify you need listed on the cardboard (this may increasingly simply be your identify in case you’re a sole proprietor)
  • Your annual enterprise revenue
  • Month-to-month enterprise bills
  • The age of your online business since inception
  • The business your online business is in
  • The enterprise construction (LLC vs. company vs. sole proprietorship, for example)
  • Your function within the firm
  • What number of workers you’ve gotten (if any)
  • Your small business deal with, even when it’s your house deal with
  • Your small business telephone quantity, even when it’s your private telephone

*Notice that not all of this data could also be required by the bank card issuer on the time of software.

Relying on the cardboard, you’ll have to mail in supporting paperwork to show you’ve gotten a enterprise. This will embody data from the Inner Income Service that proves your Tax ID quantity or revenue data. In most circumstances, although, you’ll obtain discover of approval inside a number of seconds of making use of on-line.

Why get a enterprise bank card as a substitute of a private bank card?

There are a selection of causes to acquire a enterprise bank card for your online business, together with the next:

Rewards on enterprise bills

Chances are high you’ve gotten some business-related bills you could possibly be incomes journey rewards or money again on. For instance, as a rideshare or supply driver, you might have to cowl your personal gasoline, in addition to pay for the upkeep and repairs in your automobile. When you’re promoting crafts or paintings, you’ll most likely have to buy provides.

No matter your prices are, you possibly can earn money, factors or miles if the cardboard has a rewards program. If the account provides a sign-up bonus to new cardholders, you could possibly earn extra rewards by assembly a minimal spending requirement inside the first few months of account opening.

Maintain private and enterprise spending separate

Sustaining separate enterprise and private bank cards may help you stay organized. Not solely will you’ve gotten a greater deal with in your spending, however having your whole bills on the enterprise bank card will assist when you need to reconcile your books and pay your taxes.

Construct your online business credit score rating

Whereas your private credit score rating is taken into account while you apply for a enterprise bank card, you create a enterprise credit score historical past when your credit score issuer furnishes information to the three main business credit score bureaus — Dun & Bradstreet, Equifax and Experian.

By holding your accounts in good standing, your online business credit score rating will enhance over time, rising your eligibility for different enterprise credit score merchandise sooner or later.

Enterprise perks

Most of the high enterprise bank cards supply specialised perks, equivalent to cellphone insurance coverage and money credit for business-related services and products. It pays to get the best card in your enterprise.

Can you utilize a enterprise bank card for private bills?

Utilizing a enterprise bank card for private expenditures isn’t towards the legislation; nonetheless, doing so could violate the phrases in your card settlement, which might end in penalties. These repercussions may contain:

  • Closure of your account. You’ll seemingly need to signal an settlement vowing to not use your online business bank card for private expenses. The settlement could stipulate that in case you violate these phrases, the issuer can select to cancel your card.
  • Private legal responsibility. Mixing your private and enterprise funds could end in you assuming private accountability for any enterprise money owed within the occasion of authorized issues. It might allow courts to ignore the separation between you and your online business, probably holding you personally accountable for your online business’s obligations.
  • Tax penalties. Usually, enterprise bank cards entail elevated charges and rates of interest in comparison with private playing cards. However these larger prices usually include a profit: most curiosity expenses and charges accrued from enterprise transactions are tax-deductible, alongside the business-related bills. Conversely, private purchases lack this tax-deductible benefit, leading to no monetary return. So, in case you make the most of your online business bank card for private bills and carry a stability, it would seemingly incur larger long-term prices.
  • Results on each enterprise and private credit score scores. Utilizing your online business bank card for private transactions in hopes of enhancing your client credit score rating may be engaging, nevertheless it’s unlikely to be useful. Most enterprise bank cards solely report constructive card exercise to enterprise credit score bureaus, that means any accountable habits with your online business bank card is unlikely to mirror in your client credit score rating. Nevertheless, issuers do typically report detrimental enterprise card exercise to non-public credit score bureaus, so your private credit score rating may very well be adversely affected.
  • Restricted client protections. Utilizing a enterprise bank card as a substitute of a private one might end result within the lack of particular authorized protections you take pleasure in while you use a client card, together with safeguards towards sudden rate of interest hikes with out prior discover; prohibition of rate of interest will increase on excellent balances; prohibition of curiosity expenses on well timed paid money owed; and allocation of funds towards balances with the very best rates of interest first.

Must you mistakenly cost a private expense to your online business card, notify your accountant or bookkeeper and mark the transaction to exclude it from your online business’s monetary data.

What to look out for in a enterprise bank card

Though enterprise bank cards present loads of benefits, there are a number of potential downsides. Typically, the enterprise bank cards with probably the most perks cost excessive annual charges. For instance, The Enterprise Platinum Card® from American Categorical comes with a hefty $695 annual payment. However in case you’re uncertain how usually you’ll be charging purchases to your card, or whether or not you’ll actually use the perks, think about a enterprise bank card with no annual payment.

Earlier than making use of for a card, think about the professionals and cons of a number of of one of the best enterprise bank cards, so you possibly can determine which greatest meets the wants of your distinctive enterprise, whether or not your work includes highway journeys, inventive work, e-commerce, air journey or one thing else.

In fact, each card you get should be dealt with correctly, and administration takes time and a spotlight. Whatever the dimension of your online business, it’s greatest to keep up a low stability so charges don’t eat into your proceeds, and all the time pay your month-to-month invoice on time to guard your online business credit standing.

The underside line

With so many advantages and perks, enterprise bank cards may be simply what you should handle your prices whereas making your work life simpler and extra worthwhile. No matter your online business is — from an off-the-cuff, part-time gig to a full-time freelance career — the best enterprise bank card will make it easier to keep on observe and get forward.


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