Business credit cards offer a whole set of exciting discounts like bigger sign-up bonuses, more rewards, and other benefits not available with regular personal credit cards. However, most people assume that a business credit card is strictly for large companies with high revenue numbers and hundreds of employees.
The truth is that you can get a small business credit card even if you’re a small startup or don't own a registered business. In this guide, we’ll explore the benefits of having a business card, how to get a business card without a business, and tips for using a business credit card responsibly.
Is it legal to get a business credit card without a business?
You're eligible for a business credit card, even if you’re not a registered business owner. The primary criterion for a business credit card is making money independently. Any income-producing endeavor you do—either as a primary job or a side hustle—qualifies you for a business credit card.
Here are a few examples of entrepreneurial activities that make you eligible for a business card:
- Freelancing as a virtual assistant, copywriter, editor, designer, accountant, social media manager, website developer, etc.
- Delivering food via app-based platforms like GrubHub or DoorDash
- Driving for ridesharing apps like Lyft or Uber
- Buying and selling on eBay
- Running a dog-walking business
- Tutoring kids online or in person
- Conducting skill development classes for adults online or in person
- Selling homemade items at local farmer's markets or online
- Sole proprietorships of any kind
That said, it’s highly recommended to register your business as a separate entity to earn specific tax breaks and qualify for other benefits your state offers.
Can you get a business credit card without any income?
You can still get a business credit card before you’ve started a business or generated any income. In that case, you’ll just need to choose a card that asks for your Social Security number and doesn’t have any business income requirements.
Usually, cards that don’t rely on a business credit score or revenue requirements will ask you to put up a personal guarantee, holding you personally liable for any debts incurred on the card.
How to apply for a business credit card without a business
The business credit card application process is relatively straightforward. Once you’ve determined your eligibility for a particular credit card, you can apply online. You'll likely find out whether you've been approved within a few minutes or days of applying.
Step 1.
Find the credit card you want to apply for. The best credit card for you will have relevant perks for your business, whether that’s travel rewards, discounts on office supplies, or universal cashback.
Once you’ve chosen a card offer, navigate to the online application.
Step 2.
Provide your personal information, including your name, address, contact number, email, date of birth, and Social Security number. Most credit card applications require you to provide the total gross income of your business. This is an estimate of what you expect your business to earn annually before deductions and taxes.
Step 3.
Provide information about your business. If you own a registered business like an LLC or partnership firm, you can apply using the Employer Identification Number (EIN). However, if you've started recently and have not yet registered your business, you can apply as a sole proprietor. Then, you must provide your Social Security number instead of your EIN. In this case, the provider will check your personal credit score.
Either way, be prepared to submit the following information:
- Expected annual business revenue (an estimate of what you think your business will make in a year)
- Type of business
- Number of years of operation
- Your role in the company
- Number of employees (if you have any)
- Your business address (if you don't have a formal office or store, you can provide your home address)
- Business phone number (this can be your personal phone if you don't have a separate business phone number)
Step 4.
You can also apply for employee business cards as part of the application. If you're using business cards for your employees, you must provide names and contact details for each card.
Step 5.
Once you've filled out the online application and submitted all required documentation, you can expect to receive a response within a few minutes. You can see either one of these three potential outcomes:
- Approval
- Denial
- Further review is required
If you receive the third outcome, you can contact the credit card issuer to discuss your application further. Similarly, even if your application is denied, you can connect with the credit card company to discuss the reason for the denial and provide further proof to reverse it.
DEFINITION
Can you apply for a business credit card without a tax ID?
If your business doesn't have its own Tax Identification Number (TIN), you can use your personal Social Security Number (SSN) to apply for a business credit card. However, you will need one form of tax ID—either personal or business—to complete the application.
Benefits of getting a business credit card instead of a personal card
Here are a few reasons why applying for a business credit card might make sense for your side hustle:
- Keep your business and personal finances separate: A business credit card helps you track and manage your business finances separately. This simplifies bookkeeping, financial reporting, and tax preparation.
- Improve cash flow: With a business credit card, you can access a revolving line of credit, helping you make necessary business purchases. This is especially helpful for businesses with seasonal fluctuations or that offer services or products to customers on credit.
- Build credit and improve credibility: Using your business credit card responsibly helps to enhance your credibility and build your business credit history. Timely payments and low credit utilization positively impact your business credit score, making it easier to secure investor funding or negotiate favorable terms with suppliers and vendors.
- Enjoy rewards and perks: Business credit cards offer reward programs tailored specifically for business expenses. You can enjoy cashback and discounts on business-related expenses like airline ticket booking, hotel accommodations, etc. These rewards points help you save money on your business expenses.
- Maintain accurate expense tracking: Business credit cards provide monthly statements of your business spending. This helps you track employee expenses and prepare accurate financial reports for tax filings.
- Protect yourself from frauds and scams: Business credit cards offer state-of-the-art fraud protection features. You can set it up to prevent unauthorized transactions by adding two-factor authentications that provide an extra security layer.
- Simplify vendor payments: You can set up recurring and automatic bill payments or integrate them with your accounting automation software, simplifying your costs and reducing your time on administrative tasks.
Discover Ramp's corporate card for modern finance
Can you get a business credit card in your personal name?
Yes, you can get a business credit card in your personal name. If you’re a sole proprietor or freelancer, your name will act as your business name. Or, if your business isn’t registered yet, you can use your personal name instead.
Just note that if you register your card using your SSN number and your personal name, your credit card company will likely be reporting to the personal credit bureaus. If your goal is to build business credit, the best business credit card for you will be one that requires a registered business and EIN number. That way, using your card will allow you to build business credit.
Is it illegal to open a business credit card for personal use?
While it isn’t illegal to open a business credit card for personal use, it isn’t the best idea. Making personal transactions is usually against the terms and conditions of business credit card agreements, and doing so can lead to your card being canceled. Similarly, using a company card for personal use could be considered embezzlement, even if it is your own business. Any misappropriation of funds can lead to trouble so it is best and safest to separate your finances.
Best business credit cards for new businesses
If you haven’t registered your business yet or are just starting out, there are a few credit cards that could be a good fit. Here’s a look at some credit cards that work well for new entrepreneurs and freelancers, and are relatively easy to get for new businesses:
Chase Ink Business Unlimited® Credit Card
- Credit score requirement: Good to excellent credit.
- APY: 0% introductory APR for 12 months on purchases.
- Annual fee: $0
The Ink Business Unlimited® credit card from Chase offers 1.5% cash back on all purchases without categorization. It also includes a cash bonus for new cardholders who meet a specified spending threshold in the initial three months. This card is designed to provide simplicity in rewards accumulation, offering a uniform cash back rate across all types of expenditures. The absence of an annual fee and the introductory APR period make it a practical choice for managing various business expenses.
U.S. Bank Business Triple Cash Rewards Visa®
- Credit score requirement: Good to excellent credit.
- APY: 0% introductory APR on balance transfers for 12 billing cycles.
- Annual fee: $0
The U.S. Bank Business Triple Cash Rewards Visa® provides 3% cash back on eligible purchases at gas stations, office supply stores, and cell phone service providers, and 1% cash back on all other eligible purchases. It features a cash bonus offer and imposes no limits on the total rewards that can be earned. This card is tailored for businesses with frequent expenditures in specific categories like fuel and office supplies, offering higher cash back rates in these areas.
Bank of America® Business Advantage Unlimited Cash Rewards Mastercard® Credit Card
- Credit score requirement: Good to excellent credit.
- APY: 0% introductory APR for 9 billing cycles on purchases.
- Annual fee: $0.
The Bank of America® Business Advantage Unlimited Cash Rewards Mastercard® credit card offers 1.5% cash back on all purchases. It also includes a cash rewards bonus for cardholders who reach a specified spending amount within the first 60 days of account opening. The card provides an opportunity for additional cash back for customers who have a banking relationship with Bank of America. With no annual fee and an introductory APR period, this card is aimed at simplifying cash back earnings across all purchase types.
Tips for using a business credit card responsibly and building business credit
Once you own a business credit card, you need to ensure that you're utilizing it in the best way. Using the card responsibly and building your business’s credit score should be priority. Here are a few tips to help you use a business card responsibly and build your credit rating:
- Use it only for business expenses. Resist the temptation to swipe your business credit card for personal expenses. This separation makes it easy to track and manage your business expenses.
- Set a budget and stick to it. Having a budget stops you from maxing out the credit limit on the card, and this helps avoid overspending and ensures that you can comfortably repay the balance on your card every month.
- Pay on time and in full. The easiest way to avoid late payment penalties and interest charges is to pay the total balance on time every month. By doing so, you can maintain a positive credit history, avoid debt, and build your business credibility over time.
- Track your spending. Regularly monitoring your credit card bills and statements helps you identify any unauthorized charges and closely monitor your business spending.
- Maximize rewards and benefits. Understand the rewards program and take advantage of the discounts and benefits to increase your savings and reduce expenses. That said, be cautious not to overspend to earn rewards. This is where having a budget helps.
- Keep your credit utilization ratio low. The credit utilization ratio refers to the percentage of your credit balance compared to the total available credit limit. Aim to keep it below 30% to improve your credit score. For example, if the available credit limit is $10,000, keep the outstanding balance below $3,000.
- Use expense tracking and management tools like Ramp. With Ramp, you can make your business spending smarter. Our expense management software and corporate expense cards help you save time by providing an easy and efficient way to track your business expenses, simplify vendor payments, set employee spending limits, and more.
Building your business credit score is important because it directly impacts your ability to secure financing, establish trust with suppliers/vendors, and manage cash flow effectively. A strong business credit score allows you to access loans with lower interest rates, reducing the cost of borrowing and increasing financial flexibility. It also enhances your business's credibility with potential partners and clients. A good credit score can also help protect your personal credit by separating your business finances from personal finances.
With these tips, you can optimize your business credit card usage, build business credit, and reap the benefits of responsible financial management.
Corporate cards for your business as it grows
Once your company is up and running, consider transitioning to a corporate card. Ramp's corporate cards are available to companies with a balance of at least $50,000 in the bank and don’t require a credit check—making them a great choice for newer businesses.
Our corporate cards have no annual fees and include automated expense management software that isn’t available with a standard credit card. As your business grows, a card like Ramp helps you save money while you scale. Card features include custom spending limits, duplicate expense detection, and AI-powered spending insights.
