Can you get a business credit card without a business?
Key takeaways
- It is possible to get a business credit card without owning a business if you earn income independently, such as through freelance writing or driving for rideshare apps.
- On your business card application, you can usually list yourself as the sole proprietor in the business tax identification section — using your Social Security number instead of a tax ID number.
- Some card applications may require you to mail additional documents for approval, such as income information.
Business credit cards offer unique perks that aren’t always available with personal credit cards, including larger sign-up bonuses and specialized rewards categories. However, are you eligible for a business card if you work for yourself as an independent contractor, freelancer or if you have an occasional side hustle?
In most cases, the answer is “yes.” To be approved for a business credit card, you only need to earn some money independently. Here’s what you should know about applying for a business credit card when you don’t have a traditional business.
Who can get a business credit card without a business?
You might be more of an entrepreneur than you realize. Any venture that generates income can be viewed as a legitimate business for a business credit card.
A few examples of common nontraditional business ventures include:
- Running a dog-walking business in your neighborhood
- Buying and selling on eBay
- Working as a virtual assistant
- Driving for ridesharing apps like Uber or Lyft
- Owning and leasing rental properties
- Delivering food with app-based companies like DoorDash or Grubhub
- Tutoring kids in person or online
- Buying and selling antiques
- Independent consulting work
- Selling homemade items at markets or online (such as on Etsy or Facebook Marketplace)
- Working as an entertainer
- Freelance writing and editing
- Building websites
- Managing social media sites
In short, if you earn money from the work you do, you may qualify for a business credit card. You don’t need to have a registered LLC or corporation to apply for one. If you encounter a section on the credit card application asking for your “business tax identification number,” you can list yourself as the sole proprietor and enter your Social Security number instead of a tax ID number.
Business credit card requirements
If you have a registered business, including an LLC, you’ll apply for a new business credit card using your business information. This includes your Federal tax ID number, also known as an Employer Identification Number (EIN). If you operate your business without a formal business structure, you can simply apply as a sole proprietor using your Social Security number instead.
Prepare to submit the following information when applying for a business credit card*:
- The legal name of your business and the business name you want listed on the card (this may just be your name if you’re a sole proprietor)
- Your annual business income
- Monthly business expenses
- The age of your business since inception
- The industry of your business
- The business structure (LLC vs. corporation vs. sole proprietorship, for instance)
- Your role in the company
- How many employees you have (if any)
- Your business address, even if it’s your home address
- Your business phone number, even if it’s your personal phone
*Note that not all of this information may be required by the credit card issuer at the time of application.
Depending on the card, you may need to mail in supporting documents to prove you have a business. This may include information from the Internal Revenue Service confirming your EIN or income details. However, in most cases, you’ll receive an approval notice within a few seconds of applying online.
Can you get a business card without business income?
Yes, you can get a business card if your business hasn’t generated any income yet. Issuers understand that new businesses may not have income at the outset, so be honest if you’re just starting out and haven’t made any. That said, even if your income seems small — like when you’ve only sold a few hundred dollars worth of goods — you should include that income on your application.
Remember, getting approved for a business credit card may not be as difficult as it seems. Many activities can qualify as a small business. If you regularly provide services or sell items for profit and can prove that you have both sales and expenses, you may qualify for a business credit card. Small businesses can include anything from running an active Etsy store to driving for rideshare companies.
Top reasons to get a business credit card
There are a variety of reasons to obtain a business credit card for your business, including the following:
Can you use a business credit card for personal expenses?
Using a business credit card for personal expenditures isn’t illegal; however, doing so may violate the terms of your card agreement, which could result in penalties. These repercussions might include:
- Closure of your account: You’ll likely need to sign an agreement vowing not to use your business credit card for personal charges. The agreement may specify that if you violate these terms, the issuer can decide to cancel your card.
- Personal liability: Blending your personal and business finances may result in you assuming personal responsibility for any business debts in the event of legal complications. It could enable courts to overlook the separation between you and your business, potentially holding you personally accountable for your business’s obligations.
- Tax consequences: Typically, business credit cards come with elevated fees and interest rates compared to personal cards. However, these higher costs often include a benefit: most interest charges and fees from business transactions are tax-deductible, along with business-related expenses. In contrast, personal purchases do not have this tax-deductible advantage, which results in no financial return. Therefore, if you use your business credit card for personal expenses and carry a balance, it will likely lead to greater long-term costs.
- Effects on both business and personal credit scores: Using your business credit card for personal transactions in hopes of enhancing your consumer credit score might be enticing, but it’s unlikely to be helpful. Most business credit cards only report positive card activity to business credit bureaus, meaning any responsible habits with your business credit card are unlikely to be reflected in your consumer credit score. However, issuers do sometimes report negative business card activity to personal credit bureaus, so your personal credit score could be adversely affected.
- Limited consumer protections: Using a business credit card instead of a personal one could mean losing certain legal protections that you enjoy with a consumer card — including safeguards against sudden interest rate increases without prior notice, restrictions on raising interest rates for outstanding balances, limits on interest charges for timely paid debts and the prioritization of payments toward balances with the highest interest rates first.
If you mistakenly charge a personal expense to your business card, inform your accountant or bookkeeper and mark the transaction to exclude it from your business’s financial records.
What to look out for in a business credit card
Although business credit cards provide plenty of advantages, there are a few potential downsides. Often, the business credit cards with the most perks charge high annual fees. For example, The Business Platinum Card® from American Express comes with a hefty $695 annual fee. But if you’re unsure how often you’ll be charging purchases to your card or whether you’ll really use the perks, consider a business credit card with no annual fee.
Before applying for a card, consider the pros and cons of the best business credit cards so you can decide which best meets the needs of your unique business — whether your work involves road trips, creative work, e-commerce, air travel or something else.
Of course, every card you get must be managed properly, requiring time and attention. Regardless of the size of your business, it’s best to maintain a low balance so that fees don’t eat into your proceeds, and always pay your monthly bill on time to protect your business credit rating.
The bottom line
Business credit cards can offer business owners more perks and better rewards on business-related expenses. They also typically offer higher welcome bonuses and can help your business build its own credit score. Most importantly, using a business credit card for legitimate business expenses simplifies the process of separating your business and personal finances.
Although you need a legitimate business to gain approval, obtaining a business credit card may not be as difficult as it seems. Many small business ideas and side hustles allow you to qualify for a business credit card.
With so many benefits and perks, business credit cards can be just what you need to manage your costs while making your work life easier and more profitable. Whether your business is a casual, part-time gig or a full-time freelance profession, choosing the right business credit card will help you stay on track and get ahead.
Frequently asked questions about business credit cards
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