Do you need a business to get a business credit card?

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All credit cards generally fall into one of two categories: personal and business. Almost all of us carry around multiple personal credit cards from issuers like American Express, Discover, Capital One, Chase, and more. We use them to take advantage of welcome offers, earn cash back and points, and enjoy additional benefits like purchase protection, free checked baggage, and access to airport lounges.

Most of these credit card companies, the ones that we use almost everyday for our personal purchases, also offer business credit cards. Which begs the question, what makes a business credit card different from a personal credit card, and who is actually eligible to have one? While you might think that business credit cards are reserved for well established companies, they are actually a lot more accessible to all of us that earn income outside of our work for an employer.

Do you freelance as a writer, photographer, or social media expert? Are you building an online store through Amazon or eBay? Do you provide any goods or services that you get paid for directly? If you earn earn reportable income, meaning income that you will need to report the IRS when you file your taxes, you have a business. You do not need to have a LLC, a Partnership, or a Corporation to qualify as a business. Many of us are considered a Sole Proprietorship, which is a type of business that is owned and operated by one person and in which there is no legal distinction between the owner and the business entity. If that sounds like you, you could qualify for a business credit card.

Business credit cards open up different rewards and benefits than personal credit cards because they are focused on just that: business. You'll qualify for welcome offers that earn you statement credits for your shipping costs, earn cash back or points on your business expenses, and enjoy benefits like access to WeWork coworking locations. There are business credit cards for a variety of needs such as cards focused on travel, popular expenses, or cash flow. One obvious but sometimes overlooked reason that people opt for a business credit card is that it keeps your personal and business expenses separate.

The applications for these cards will always have a business focused section that will ask you questions to learn more about your business. They will generally ask for the type of business that you operate and your TIN, or tax identification number. If you have a more substantial entity like an LLC, you should have an EIN, or Employer Identification Number. But, if you are a Sole Proprietor (and most of us are), you would enter in your Social Security Number. Credit card companies may ask for more information or documents to verify your business, like a 1099-MISC (the form freelancers generally use to report income). It is still a credit card application, so the credit card company will most likely run a hard inquiry on your personal credit score and credit report and use that as a determining factor in approving or declining you for the card.

There are a vast number of business credit cards that are designed for the small business so make sure to take the time to do your research and find the one that fits your business best.

Joe Wituschek