Am I Eligible For a Business Credit Card?
There’s a myth out there that you have to operate a big company with multiple employees in order to be eligible for business credit cards. This is NOT true. If you run a small business, do freelance or contract work, or earn ongoing self-employment income, you may qualify for a business card. Here’s who can qualify, what’s required, and what to consider before applying.
Once people learn the basics about free travel, they start thinking of how they might maximize their situation. One of the easiest ways to maximize points is to get a small business credit card.
Why?
Business cards have some of the highest signup bonuses and some have great ongoing benefits as well. Many banks, airlines, and hotels have a business card version of the personal card that you may already have. By getting just one business card, you can get a BIG bump to your points and miles total.
Starting off with business credit cards that allow you to merge your points into one account can be the most beneficial. So if you already have a personal Chase Ultimate Rewards® credit card, such as the Chase Sapphire Preferred® Card, then getting a business credit card (or two) within the Ultimate Rewards ecosystem can allow you to earn and increase your points balance quickly. A strong starting point is a no-annual-fee business card that earns transferable points, like the Chase Ink Business Unlimited® Credit Card or the Chase Ink Business Cash® Credit Card. You can choose the one that best fits how your business actually spends.
Eligibility Rules for the Chase Ink Business Unlimited and Chase Ink Business Cash: Chase has introduced rules for the no-annual-fee Chase Ink Business Unlimited® Credit Card and Chase Ink Business Cash® Credit Card, making welcome bonus eligibility a bit less predictable. The bonus may not be available if you have previously received a bonus on either the Ink Business Cash OR the Ink Business Unlimited, but the good news is that you should get a message to let you know if you’re not eligible before a hard credit check.
Eligibility Rules for the Ink Business Preferred® Credit Card, Sapphire Reserve for Business℠, and Ink Business Premier® Credit Card: The new cardmember bonus may not be available to you if you have previously had this card. Chase may also consider factors pertinent to your business in determining your bonus eligibility.
Looking for instructions on how to apply for a business credit card? Skip down to step-by-step application instructions and a video walkthrough.
What Qualifies as a Business?
First of all, let’s define what a business is in terms of being eligible for a business credit card. A business can be any occupation, profession, or trade that earns income. So, if you have employees and make a large amount of business income, you are obviously eligible. But even a smaller operation that regularly earns income can count as a business.
If you are thinking, I work for someone else so I can’t get a business card, here is a question to ask yourself: do you regularly earn income from work you do on your own, outside of your main job?
Examples of what counts as a small business:
- Photography
- Coaching
- Freelancing
- Consulting
- Yoga Instructor
- Blogging
- Tutoring
Coach, teach, or consult? That can count as a business.
The Facts about Small Business Credit Card Eligibility
a) Your business does not need to be your primary income generator. Plenty of legitimate businesses are run part-time alongside a regular job.
b) You do NOT need employees to be designated a business.
c) You don’t need to formally register your business with your state to be considered a sole proprietor and apply for a business card. Anyone earning a profit from a business activity, even a side gig, counts as a sole proprietor, and sole proprietors aren’t required to file any paperwork. When you fill out the application, just use your own name and Social Security number as the Tax ID.
Note on EINs: An EIN (Employer Identification Number) is basically a Social Security number for a business. It’s a separate, optional step for registering a business. But as a sole proprietor, you don’t need one to apply for a business card; your SSN works fine. However, it may help your approval odds to have an EIN, and you can get one for free directly from the IRS through this website.
Is it OK to use business cards for personal expenses? I’m not a lawyer, but to my knowledge there aren’t any specific laws that prohibit putting personal expenses on a business credit card. However, the terms and conditions on most business cards state that the card should only be used for business purposes.
In practice, I’ve had a lot of business cards and have never once been asked whether an expense was personal or business. That said, it’s important to know that certain consumer protections don’t apply to business credit cards, which could make a difference in a dispute. If it makes you uneasy, don’t use a business card for personal spending. And I’m not an accountant, but if you do, make sure you have a solid system in place to flag those transactions for your bookkeeper or CPA so they can properly categorize everything.
There are many great reasons to get a business card for business purposes, such as keeping expenses separate, building up a business credit history, and getting extra protection on items purchased, depending on the card.
Make and sell your own products? That’s a business.
Reasons to get a business credit card for free travel:
1) BIG Bonuses
In many cases, a bank’s business signup bonus is higher than the bank’s personal card signup bonus. On average, businesses spend far more than individuals, so while the minimum spending requirement may be higher (ex. $6,000 – $8,000 in 3-6 months for many cards), the bonuses are better too. For example, most personal cards have bonuses ranging from 50,000-60,000 points. Business bonuses can be 70,000 – 100,000 points. Our favorites are the Chase Ink Business Cash and the Chase Ink Business Unlimited.
2) Spending Multipliers
Some business cards have much better multipliers (e.g. 2X, 3X, or even 5X points for certain purchase categories). For example, the Chase Ink Business Cash offers 5X points at office supply stores and on internet, cable, and phone services (up to the first $25,000 spent in combined purchases each account anniversary year).
3) Let your personal card applications take a rest.
With the 5/24 rule (read here how to Check Your 5/24 Status INSTANTLY), there may be times where you want to take a hiatus from personal applications. Getting a business card can allow you to continue to earn signup bonuses without impacting your 5/24 number. Note: Chase will not approve you for their business cards unless you are under 5/24.
How to hit required spending for bonuses
Many people like the idea of getting a business card and a great signup bonus, but they can’t make the minimum spending to hit the bonus. Especially if your business is newer or run part-time, your monthly business spending may be modest.
If the signup bonus requires $4,000+ in spending, that can feel difficult to achieve. Some cards have a disclaimer that you must only use a business card for business expenses. However, many business owners choose to combine personal and business spending in order to hit the bonus. With that approach, it is a matter of keeping track of your accounting for personal and business expenses when the statement comes.
In summary, far more people are eligible for a business credit card than they may think. With that said, some of the best cards may require a higher level of business income and a business credit card specialist may want to ask more specifics about your income and expenses before you get approved.
Ready to get a business credit card?
If a business card is a good fit for your situation, the Chase Ink Business cards are definitely worth a look. They offer welcome bonuses worth hundreds of dollars in cash or travel, and the points can be combined with your Chase Sapphire Preferred® Card or Chase Sapphire Reserve®. Check out the video below or click through for a step-by-step guide on How to Apply for a Business Card.
Video Walkthrough on how to apply
How to improve your chances of success
The following tips can help with approval, but none are guaranteed:
- Use an EIN instead of your SSN when entering your Business Tax ID on the application.
- Do not call if your application goes to pending.
- Call if your application is denied.
Do not call if your application goes to pending
When applications go to pending, people frequently find that they get approved without calling. When people do call, they often get tough analysts who deny the application.
The approval process goes through up to 3 “gates”:
- Instant Approval (this is rare with Ink business cards)
- Automatic Approval, sent by mail (may take several weeks)
- Analyst Phone Approval
If you’re not instantly approved, then calling bypasses gate 2 and may reduce your overall chance of approval. Instead, I recommend waiting to get a letter in the mail. Hopefully it will say “congratulations”.
Of course, if you are contacted for more information then you absolutely should talk to them on the phone. In some cases they may simply need more information about you or your business before your application can go through the next review stage.
Call if you are denied (and call again)
If your application is outright denied (either instantly or by mail), then call the reconsideration line (numbers are here). There are many cases where analysts have overturned denials over the phone.
The analyst will likely ask a lot of questions. Make sure your answers match your application. Also, if you already have multiple business cards, make sure to let the analyst know that you don’t need more credit. Tell them that you are willing to move available credit from another card or two. Be prepared to answer financial questions about your business, why you want the card and how you expect to use it. There is absolutely nothing wrong with saying that you were attracted “by the spending bonus and by the 5X spend categories” (for example).
If the analyst doesn’t approve your application, call again. Many people have had luck simply calling a few times until they reached an analyst willing to take a chance on their business.
Want to know even more? Check out our Free PDF Guide for Small Business Owners.
Have any questions, or need card recommendations on the best business card that could get you $500-1,000 in cash or free travel? Don’t hesitate to ask. Drop us a line: letstalk at travelfreely.com.
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Reader interactions
2 Replies to “Am I Eligible For a Business Credit Card?”
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This is totally eye opening for me Zac. For years, I figured only bigger enterprises would be eligible for a business credit card. Definitely changed my view bro. I am eligible likely, and am happy to know this 😉 Thanks for sharing 🙂
Ryan
Thanks, Ryan. It can be so helpful for many small businesses and those who have a small side business. For those struggling to make a profit, it can be a nice little bonus too! Same goes for nonprofits who could save some money every year on airfare or other expenses.