Think You Can’t Qualify for a Small Business Credit Card? Think Again

If you have a side hustle, you may not think of yourself as a small business owner. But most people who earn money outside of an employer are considered independent contractors — essentially, you’re a small business with one employee.

And as a small business owner, you may qualify for a small business credit card that could help you earn rewards.

What jobs qualify for a business credit card?

When you make money that’s not from an employer, you are a small business owner.

This can cover a wide variety of money-making activities, including dog walking, babysitting and selling things online. You can also apply for a business credit card as a freelancer, or by engaging in gig work such as driving for a car service and delivering meals or groceries. As a freelance writer, I qualified for small business credit cards, even when I was only “moonlighting” as a part-time writer. 

Professionals with their own practice, including doctors, lawyers, accountants and psychologists, can also qualify for small business credit cards, even if they’re only self-employed part time or they work from home. 

What you need to qualify for a business credit card

Many people assume that you need to be incorporated to apply for a business credit card, but you don’t need a corporation, business license or LLC. If you are a sole proprietor or gig worker and file taxes as “self-employed” on your tax forms, you can qualify for a business credit card. 

You will just need to supply some basic information about your business name, address, the type of business and your expected revenue. 

The issuer will also check your personal credit, as most business cards require a guarantor, or someone who will be responsible to pay the card off in the event the business doesn’t or can’t. So having better personal credit will increase your likelihood of being approved.

What to look for in a business card

After you decide to get a small business credit card, the next step is choosing one that’s right for you. 

Welcome bonus

Many small business credit cards offer generous welcome bonuses, which can be worth thousands of dollars. These bonuses could be in points, miles or cash back. 

Most cards will require you to spend a certain amount before receiving the bonus, so you’ll want to make sure that you can meet this requirement with your regular spending. If you overspend in order to reach a bonus, it’ll cut into the value you’d get from it.

Remember that it’s always better to keep your personal and business spending separate. Doing so can help small business owners with their accounting and tax preparation. 

There’s also the argument that using the same credit cards for personal and business expenses can create personal liability out of business matters. In legal speak, combining expenses can “pierce the corporate veil” and potentially make it possible for an attorney to pursue your personal assets if you were to lose a business-related lawsuit.

Rewards for spending

Think about the kinds of purchases you make the most. Look for these in a credit card’s bonus categories. For example, many small business cards offer bonus rewards for common business purchases such as advertising, office supplies, telecommunications and travel. 

Expense tracking and reporting features

Although you might think only larger businesses use these kinds of features, you might also find reporting and tracking tools helpful for your accounting and tax preparation. Consider what features would be most helpful for you as a business owner. 

Interest rates and fees

While there are some small business credit cards that don’t charge an annual fee, paying a fee can be worth it if the rewards and benefits are valuable enough to you. If you’ll be using your card to finance purchases, choose a card with the lowest possible standard interest rate, or one that features an introductory 0% APR.

Tips for getting the most from your business card

When you receive your card, make sure that you understand the requirements to earn your welcome bonus. You’ll also want to review the guide to benefits to learn about any travel insurance and purchase protection policies. 

If you can, avoid carrying a balance from month to month so that interest charges won’t eat into any of the rewards you earn. The easiest way to do this is to set up the autopay feature on your card to pay off the full balance each month — make sure you have enough in your bank account to cover the amount. 

Finally, check out your card’s expense tracking features, as these can save you a lot of time when you’re doing your books and preparing your taxes. 

My favorite small business credit cards

• Ink Business Preferred® Credit Card.  This small business card charges $95 annually but has one of the most valuable welcome bonus offers available. New applicants can earn 120,000 bonus points after spending $8,000 within three months of account opening. That’s worth $1,200 as cash back or $1,500 toward reservations booked through Chase Travel℠. 
• Southwest® Rapid Rewards® Performance Business Credit Card. I love this small business card because it offers you 80,000 points after you spend $5,000 on purchases in the first three months with an additional 40,000 points when you spend $15,000 in nine months (and these points count toward your Companion Pass). Benefits include four upgraded boardings a year (when available) and up to 365 in-flight Wi-Fi credits per year. You also get up to $100 in credits toward the application fee for Global Entry or TSA PreCheck. It has a $199 annual fee.
• Ink Business Cash® Credit Card. For gig workers who may not be in the market for a premium travel rewards card, there are plenty of low-fee and no-annual-fee rewards cards to choose from. For example, the Chase Ink Cash earns good rewards for business and travel expenses without charging an annual fee.

How to apply

Applying for a small business card is very similar to applying for a personal card. In fact, you need little more to apply for a small business credit card than you do for a personal card.

You’ll need:

• Your business name and address (but you can use your home address if you don’t have a separate place of business). 
• Your corporation, S-corp or LLC. You can even apply as an unincorporated sole proprietor, which is to say that you work by yourself. 
• Your expected annual revenue from your business. 
• Your expected monthly spending on your card.

If your business is new, don’t worry. Credit card issuers want new business owners to apply for cards, so it’s OK to provide your best estimate of your income and expenses.