Can You Get A Business Credit Card Without A Business?
Key takeaways
- It’s doable to get a enterprise bank card with out proudly owning a enterprise in the event you earn cash independently, similar to by way of freelance writing or driving for rideshare apps.
- Usually, on your enterprise card software, you possibly can checklist your self as the only proprietor within the enterprise tax identification quantity part. Additional, you possibly can checklist your Social Safety Quantity relatively than a tax ID quantity.
- Some card functions might require you to mail in further paperwork for approval, similar to revenue data.
Enterprise bank cards supply some distinctive perks you possibly can’t all the time get with private bank cards, together with larger sign-up bonuses and specialised rewards classes. However are you eligible in the event you work for your self as an impartial contractor or freelancer, or when you’ve got an occasional facet hustle?
Most often, the reply is sure. To be authorized for a enterprise bank card you simply have to be incomes some cash independently. Right here’s what that you must find out about making use of for a enterprise bank card whenever you don’t have a conventional enterprise:
Qualifying work for a enterprise bank card
You could be extra of an entrepreneur than you assume. Any income-producing endeavor will be thought of a reputable enterprise for a enterprise bank card. Only a few examples of frequent nontraditional ventures embrace:
- Working a dog-walking enterprise in your neighborhood
- Shopping for and promoting on eBay
- Working as a digital assistant
- Driving for ridesharing apps like Uber or Lyft
- Proudly owning and leasing rental properties
- Delivering meals with app-based corporations like DoorDash or Grubhub
- Tutoring youngsters in particular person or on-line
- Shopping for and promoting antiques
- Impartial consulting work
- Promoting home made gadgets at markets or on-line (similar to on Etsy or Fb Market)
- Working as an entertainer
- Freelance writing and enhancing
- Constructing web sites
- Managing social media websites
Briefly, in the event you earn cash from the work you do, you could possibly qualify for a enterprise bank card. You don’t should have a registered LLC or company to use for a enterprise bank card. If, on the bank card software, you come throughout a piece asking to your “enterprise tax identification quantity,” you possibly can checklist your self as the only proprietor and enter your Social Safety Quantity as an alternative of a tax ID quantity.
Enterprise bank card necessities
When you’ve got a registered enterprise, together with an LLC, you’ll apply utilizing your enterprise data, together with your Federal Tax ID quantity, additionally referred to as an Employer Identification Quantity (EIN). Should you run your enterprise and not using a formal enterprise setup, you possibly can merely apply as a sole proprietor together with your Social Safety Quantity as an alternative.
Both approach, put together to submit the next data*:
- The authorized identify of your enterprise and the enterprise identify you need listed on the cardboard (this will likely simply be your identify in the event you’re a sole proprietor)
- Your annual enterprise revenue
- Month-to-month enterprise bills
- The age of your enterprise since inception
- The trade your enterprise is in
- The enterprise construction (LLC vs. company vs. sole proprietorship, as an example)
- Your function within the firm
- What number of workers you might have (if any)
- Your online business tackle, even when it’s your private home tackle
- Your online business cellphone quantity, even when it’s your private cellphone
*Notice that not all of this data could also be required by the bank card issuer on the time of software.
Relying on the cardboard, you’ll have to mail in supporting paperwork to show you might have a enterprise. This will embrace data from the Inside Income Service that proves your Tax ID quantity or revenue data. In most circumstances, although, you’ll obtain discover of approval inside a number of seconds of making use of on-line.
Why get a enterprise bank card as an alternative of a private bank card?
There are a number of causes to acquire a enterprise bank card for your enterprise, together with the next:
Rewards on enterprise bills
Likelihood is you might have some business-related bills you possibly can be incomes journey rewards or money again on. For instance, as a rideshare or supply driver, chances are you’ll must cowl your individual fuel, in addition to pay for the upkeep and repairs in your car. Should you’re promoting crafts or paintings, you’ll most likely must buy provides.
No matter your prices are, you possibly can earn money, factors or miles if the cardboard has a rewards program. If the account provides a sign-up bonus to new cardholders, you could possibly earn further rewards by assembly a minimal spending requirement throughout the first few months of account opening.
Preserve private and enterprise spending separate
Sustaining separate enterprise and private bank cards will help you stay organized. Not solely will you might have a greater deal with in your spending, however having all your bills on the enterprise bank card will assist when you need to reconcile your books and pay your taxes.
Construct your enterprise credit score rating
Whereas your private credit score rating is taken into account whenever you apply for a enterprise bank card, you create a enterprise credit score historical past when your credit score issuer furnishes knowledge to the three main business credit score bureaus — Dun & Bradstreet, Equifax and Experian.
By conserving your accounts in good standing, your enterprise credit score rating will enhance over time, growing your eligibility for different enterprise credit score merchandise sooner or later.
Enterprise perks
Lots of the high enterprise bank cards supply specialised perks, similar to cellphone insurance coverage and money credit for business-related services. It pays to get the correct card to your enterprise.
Can you utilize a enterprise bank card for private bills?
Utilizing a enterprise bank card for private expenditures isn’t towards the regulation; nevertheless, doing so might violate the phrases in your card settlement, which may end in penalties. These repercussions may contain:
- Closure of your account. You’ll probably should signal an settlement vowing to not use your enterprise bank card for private expenses. The settlement might stipulate that in the event you violate these phrases, the issuer can select to cancel your card.
- Private legal responsibility. Mixing your private and enterprise funds might end in you assuming private duty for any enterprise money owed within the occasion of authorized issues. It may allow courts to ignore the separation between you and your enterprise, doubtlessly holding you personally accountable for your enterprise’s obligations.
- Tax penalties. Usually, enterprise bank cards entail elevated charges and rates of interest in comparison with private playing cards. However these greater prices usually include a profit: most curiosity expenses and charges accrued from enterprise transactions are tax-deductible, alongside the business-related bills. Conversely, private purchases lack this tax-deductible benefit, leading to no monetary return. So, in the event you make the most of your enterprise bank card for private bills and carry a stability, it’ll probably incur larger long-term prices.
- Results on each enterprise and private credit score scores. Utilizing your enterprise bank card for private transactions in hopes of enhancing your client credit score rating could be attractive, however it’s unlikely to be useful. Most enterprise bank cards solely report optimistic card exercise to enterprise credit score bureaus, which means any accountable habits with your enterprise bank card is unlikely to replicate in your client credit score rating. Nevertheless, issuers do typically report unfavorable enterprise card exercise to private credit score bureaus, so your private credit score rating could possibly be adversely affected.
- Restricted client protections. Utilizing a enterprise bank card as an alternative of a private one may outcome within the lack of particular authorized protections you get pleasure from whenever you use a client card, together with safeguards towards sudden rate of interest hikes with out prior discover; prohibition of rate of interest will increase on excellent balances; prohibition of curiosity expenses on well timed paid money owed; and allocation of funds towards balances with the best rates of interest first.
Must you mistakenly cost a private expense to your enterprise card, notify your accountant or bookkeeper and mark the transaction to exclude it from your enterprise’s monetary data.
What to look out for in a enterprise bank card
Though enterprise bank cards present loads of benefits, there are a number of potential downsides. Typically, the enterprise bank cards with probably the most perks cost excessive annual charges. For instance, The Enterprise Platinum Card® from American Categorical comes with a hefty $695 annual charge. However in the event you’re uncertain how usually you’ll be charging purchases to your card, or whether or not you’ll actually use the perks, think about a enterprise bank card with no annual charge.
Earlier than making use of for a card, think about the professionals and cons of a number of of the most effective enterprise bank cards, so you possibly can resolve which finest meets the wants of your distinctive enterprise, whether or not your work entails street journeys, inventive work, e-commerce, air journey or one thing else.
In fact, each card you get have to be dealt with correctly, and administration takes time and a focus. Whatever the dimension of your enterprise, it’s finest to take care of a low stability so charges don’t eat into your proceeds, and all the time pay your month-to-month invoice on time to guard your enterprise credit standing.
The underside line
With so many advantages and perks, enterprise bank cards will be simply what that you must handle your prices whereas making your work life simpler and extra worthwhile. No matter your enterprise is — from an off-the-cuff, part-time gig to a full-time freelance occupation — the correct enterprise bank card will make it easier to keep on observe and get forward.