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Whether you’ve just gotten started or you’ve applied for your First Five Credit Cards, it would be wise to consider “business” credit cards.
If you’ve ever thought about applying for one only to deem yourself ineligible, it’s time to rethink your approach and take a closer look at these powerful pieces of plastic. You may be eligible for more rewards than you thought!
What is a Business Credit Card?
Simply, it is a credit card that is intended to be used by business owners for company-related expenses rather than personal use. They are available to large and small businesses alike, and can be a useful tool for separating expenses, providing employees with charging capabilities, and building a business’ credit portfolio for future lending needs.
Why Are Business Credit Cards Useful?
Other than the aforementioned reasons of building a business credit profile, the advantages of utilizing business credit cards are that they offer similar award bonuses as personal cards–sometimes even better. For example, here are current offers for the personal and business versions of the Chase Sapphire Preferred and Ink Business Preferred cards:
Learn more about this card.
Learn more about this card.
Clearly, the business card is offering more points (with a bit of extra spend) and can be a great way to earn points. What’s more, there is nothing preventing you from getting both the personal and business version of this card and earning 180,000 Ultimate Rewards points. Even better, your spouse can do the same and the two of you can earn 360,000 Ultimate Rewards points for $38,000 spend (plus an additional 38,000 points, for a total of 398,000, due to earning 1 mile/point on those $38,000 spent – more if spending in a bonused category). That’s enough for two round-trip award tickets from the U.S. to anywhere in the world with points to spare. Although the Business Preferred has a high spend threshold, you could also do the same with the Ink Business Cash or Ink Business Unlimited as well with similar results.
You, too, could fly in masked luxury with points earned from business credit cards!
Other advantages of business credit cards are that they tend to have larger credit limits (in expectation of large business purchases) as well as the occasional unique bonus category. The Chase Ink Business Preferred, as mentioned previously, is one such card that offers 3x Ultimate Rewards points per dollar spent (up to $150,000) on travel, shipping purchases, Internet, cable and phone services, and advertising purchases made with social media sites.
A final advantage of business credit cards is that they generally do not count towards Chase’s “5/24” rule. This means that if you have opened four personal cards and two business cards in the last 24 months, you are most likely still considered to be under Chase’s threshold and should be able to open another personal card with them.
Am I Eligible For a Business Credit Card?
While it’s true that you need to have a business in order to apply for a business credit card, the definition of what constitutes a business is extremely broad. It does not need to be an LLC or Corporation (Inc.) in order to qualify – most people operate some kind of a business as a Sole Proprietor without even realizing it. Here are some examples of odd jobs and side hustles that constitute a business:
- Freelance writing
- Selling stuff on eBay
- Consulting (ever help your parents’ friends set up a computer?)
- Rental properties
- Babysitting
- Tutoring
- Yard work – mowing lawns, shoveling snow, etc.
- Blogging ->
These are just a few of many examples that could substantiate the need for a business credit card. Again, almost any time you’re exchanging goods or services for money you’re making a business transaction.
Filling out a Business Credit Card Application
The first thing you notice when filling out a business card application is that it asks for specific information pertaining to the business. In general, card issuers will ask for the type of business entity, the business’ mailing address is, the business’ annual revenue, and a Tax ID number. If you are not an established LLC or Corporation (most businesses are not), then you are a Sole Proprietor and will answer all these queries with your personal information. For example:
- Business Type: Sole Proprietor
- Business Mailing Address: Your address
- Legal Business Name: Your Name
- Tax ID Number: Your Social Security Number
- Business Revenue/Sales: $0 (not all businesses make money their first year, but if you have positive revenue put it here!)
Other fields will be required as well but are self-explanatory. After completing the “Business Information” section, you will be asked about your personal information. Fill this out exactly as you would on a personal credit card application, then click submit.
Our Favorite Business Credit Cards
Chase Ink Business Preferred
Features:
- Welcome Bonus: 100,000 Chase Ultimate Rewards points after $15,000 spend in 3 months
- 3x UR points on the first $150,000 spent on travel, shipping purchases, Internet, cable and phone services, and on advertising purchases made with social media sites (1 UR/$ otherwise).
- Cell phone protection (up to $600 per claim). You must pay the bill with your card to be eligible.
- Primary rental car insurance
- $95 Annual Fee
Why it’s great:
If you’re under “5/24”, then this is a card you should have in your wallet. With its generous welcome bonus, fantastic 3x earning categories, and the ability to pool Ultimate Rewards points with other Chase cards (Freedom, Sapphire Preferred, etc.), this card is a no-brainer. It’s also one of the few credit cards that offers cell phone insurance – especially for only having a $95 annual fee. Learn More.
The Business Platinum Card from American Express
Features:
- Welcome Bonus: 100,000 Membership Rewards Points after $15k spend in first 3 months
- 5x Membership Rewards points on flights and prepaid hotels at AmexTravel.com
- 1.5x Membership Rewards points on eligible purchases of $5,000 or more
- $200 yearly statement credit for airline incidental fees
- Up to $200 a year in statement credits for Dell purchases
- $100 Global Entry fee reimbursement
- Lounge membership (Priority Pass, Amex Centurion, Delta Skyclub, Airspace)
- $595 Annual Fee
Why it’s great:
The Business Platinum is in the realm of “ultra premium” cards that come with a hefty annual fee. However, the combination of a nice welcome bonus plus lounge membership, statement credits, and other benefits usually outweigh the cost – at least for the first year. This is a powerful card to have in your wallet which can pad your pile of Membership Rewards points while not adding to your “5/24” total. Learn More.
Final Thoughts
If you ever thought you weren’t eligible to open business credit cards, think again. The definition of a business is generous and nearly anything you do to provide goods or services is likely qualified. You’d be remiss to pass up the opportunities these cards provide.
Not only are they useful for separating expenses and building credit, they provide another avenue to earn massive amounts of points and benefits. Similar to personal cards, the options are expansive and cover every level from no-fee to ultra-premium. What’s more, business cards generally do not count towards your “5/24” status with Chase so you can more easily stay below the threshold to take advantage of their offerings. Time to dust off that old eBay account and get selling!
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I considered applying for a business card but would have trouble meeting the spending requirements using only business expenses on my rental(15k). Would you suggest putting personal spending on this card to meet the minimum spend?
I would
Yes, this can be done. Just make sure you are able to differentiate between personal and business expenses for tax purposes (if audited) and it won’t be an issue.
Coincidently I am looking at opening a business credit card. The problem I have is that, as far as I can tell they don’t show up on my credit report so I am not sure when was the last time I opened the Ink card, it was some 4 years ago… And you can only get the bonus on the Ink only every 48 months. I keep track of my credit card applications but I used to not record whether they were business or personal… Would I have to just call Chase and find out? Would they be OK with this? Otherwise, I will have to wait a few months after which I am sure I will be outside of the 48 months. Thanks
@kindoflost – your business and personal credit reports are different, as are the bonus restrictions between Sapphire and Ink cards (even though they both earn UR points). Here’s what you need to know:
– You can only get a Sapphire bonus (Preferred or Reserve) every 48 months – doesn’t matter which card, you’re restricted to one.
– You can get an Ink card and it’s associated bonus every 24 months (can get each card every 24 months if you want – an Ink Cash, Ink Preferred, etc.)
– All Chase cards are SUBJECT to 5/24 (e.g. you need to be under 5/24 to get them), but the Ink cards (or any business card that is not reported on your personal report, which is most) does not add to your 5/24 total.
So to answer your question – you can open any Ink card right now, even if it’s the same one you opened nearly 4 years ago, as the timing between Ink and Sapphire cards are totally separate (and different).
Hope that helps!
The page did not show your post until after I posted my other reply…
Thanks!
No problem!
Well it looks like I mixed up the CitiBusiness (which does have a 48-months rule) with the Chase Ink (which does not)
Regards