Building Your Personal Credit Card Strategy
Business Cards: You Probably Qualify + Why You Want Them
If you earn money through any sort of side hustle, you probably can qualify for a business card. That's because you can be considered a "sole proprietor" with a small business from the perspective of the bank.
Of course if you have an LLC or other small business, you can qualify, too!
We own and rent out a condominium and apply for business cards for our rental property business. When we travel, we sometimes rent out our house via Airbnb, so we have other business cards for that business.
I've talked to friends who sell (even sparingly) on eBay or Facebook Marketplace or craigslist and apply for cards for their resale businesses. One even applied by listing $100 annual income from her garage sale business and got approved. If you freelance or tutor or consult or babysit or drive for Uber you probably qualify, too.
Why do I bother even mentioning business cards? There are two big reasons: reducing the number of cards on your personal credit report and access to great offers.
Reducing Accounts on Your Personal Credit Report
Generally speaking, business cards don't affect your personal credit report. This helps keep your credit score higher if you want to apply for cards and cancel them after one year.
Because business cards generally don't show up on your personal credit report, they also make it easier to get approved for more cards from more banks.
If you're working on slowly applying for cards from Chase, you can also mix in business cards from Chase and other banks without affecting your 5/24 score.
Note, however, that if you are at or above 5/24, you will not be able to open a Chase business account.
Increased Offers
Having a small business will open the door to a lot more offers for you. Many banks have similar cards offered as personal and business cards. You can usually open both which means you can have double the number of offers to choose from!
If you have multiple businesses, you can sometimes even open the same card for different businesses.
FAQs on Business Cards
There are different business categories to choose from. Unless you have an EIN or have incorporated, usually you will select "Sole Proprietorship". This is true even if it is a rental property that you and your spouse rent out together.
If you don't have an EIN, you will put your Social Security number in the box that says EIN.
It's not uncommon for business cards to go under review and not be approved immediately. It may take up to two weeks to get an answer. If you get denied, or are tired of waiting for an answer, call the bank's reconsideration line to make your case.
While it isn't illegal to put personal expenses on a business credit, banks are required to ask you to use it for business expenses only due to regulations in the CARD Act. We don't know of anybody that has run into any issues putting personal expenses on a business card.
That said, if you are putting personal and business expenses on a card, you will need to track your actual business expenses for tax purposes.
Watch me walk through a real Chase business card application below — so you can see exactly what to expect when you apply for your first one.
