How to Get a Business Credit Card If You Don’t Have a Business

You may have seen some great business credit card offers and immediately skipped over them because you thought, “I don’t own a business.” But you might actually qualify for a business credit card without realizing it.

You don't necessarily need an LLC, employees, an office, or even a formal business name. Many people who make money independently can legitimately apply for a business credit card as a sole proprietor.

The definition of a business can be much broader than most people think. If you sell items on eBay, Etsy, or Facebook Marketplace, do freelance work, drive for a delivery service, mow lawns, clean houses, take photographs, tutor, pet sit, make crafts, run a website, or do other work with the intention of making money, you may have legitimate business activity.

You don't necessarily have to be making a lot of money, either. Every business has to start somewhere. A new side business may only make a small amount during its first year. The important thing is that the business is legitimate and that everything you put on a credit card application is truthful. You should never invent a business or exaggerate your revenue just to qualify for a credit card.

You May Already Be a Sole Proprietor

A sole proprietorship is one of the simplest ways to operate a business. You generally don't have to create a corporation just to be a sole proprietor, and you may not need to form an LLC before applying for a business credit card.

For example, imagine you make custom shirts at home and occasionally sell them online or to friends. You don't have employees, an office, or an LLC, and maybe you only make a few thousand dollars a year. That's still real business activity.

When applying for a business credit card, you may be able to select sole proprietorship as your business structure. If you operate under your own name, your business name may simply be your legal name. Depending on the issuer and application, a sole proprietor may also be able to use a Social Security number instead of an Employer Identification Number (EIN).

The exact application requirements vary from one credit card company to another, so read each question carefully.

What If Your Business Doesn't Make Much Money?

This is one of the areas that makes people hesitant to apply. They may have a legitimate side business but only make $1,000 or $2,000 a year from it.

That's okay. Don't turn $2,000 into $20,000 on the application because you think it will improve your chances of being approved. Put down accurate information.

Also, remember that business revenue and personal income aren't necessarily the same thing. An application may ask how much revenue your business generates and separately ask about your personal or total income. Answer the questions based on exactly what the issuer is requesting.

Why Get a Business Credit Card?

For travelers, one of the biggest reasons to consider business credit cards is that they open up another group of potential welcome bonuses.

If you've already earned bonuses from several personal travel cards, business cards can give you additional opportunities to earn airline miles, hotel points, or flexible travel rewards. Some business cards also earn extra rewards on common business expenses such as advertising, internet and phone service, shipping, or office supplies.

They can also make bookkeeping easier. Putting your legitimate business expenses on a separate card gives you a much cleaner record of what you spent on the business.

However, there is one important warning. Business credit card welcome bonuses can sometimes require a lot of spending. You might see a great offer but discover that you need to spend several thousand dollars within the first few months to earn it.

Don't spend money you weren't already planning to spend just to earn a credit card bonus.

If a card requires $8,000 in purchases and you only have $3,000 in legitimate planned expenses, it's probably not the right card for you. Wait for an offer that matches your normal spending.

That's an important part of the IDoLetsGo philosophy. The goal isn't to spend more money so you can travel. The goal is to take money you're already going to spend and earn as much travel value from it as possible.

What About Your Personal Credit?

A business credit card doesn't necessarily mean your personal credit is completely out of the picture. Many issuers will evaluate your personal credit when you apply, particularly if you're a sole proprietor or have a small or relatively new business.

You may also personally guarantee the account, meaning you're responsible for paying the balance if the business doesn't.

Credit reporting practices can vary between issuers, so don't assume that simply having the word “business” on the card means it can never affect your personal credit.

You Don't Need to Create a Business Just for a Credit Card

If you're already doing legitimate work on the side, you may not need to do anything special before considering a business card. You may already qualify to apply as a sole proprietor.

You also shouldn't feel like you need to rush out and create an LLC just to get a credit card. An LLC can make sense for many businesses, but deciding whether to form one involves legal, tax, and liability considerations that go well beyond credit card rewards.

The main point is simple: you don't necessarily need what most people picture when they hear the word “business.”

You don't need an office building. You don't need employees. You don't necessarily need an LLC. You don't have to be making hundreds of thousands of dollars.

If you're legitimately selling products, freelancing, doing gig work, or operating a side hustle with the intention of making money, you may already have business activity that allows you to apply for a business credit card as a sole proprietor.

Business cards can be another great way to earn points and miles toward your next vacation, especially after you've already explored personal travel cards. Just make sure the business is legitimate, everything on your application is accurate, and the spending requirement fits expenses you were already planning to make.

Never spend more money to earn free travel. Use the money you were already going to spend to make your travel cheaper.

You can compare travel credit cards and current offers at IDoLetsGo.com/cards.

Credit card requirements and approval standards vary by issuer. This article is for general informational purposes and does not guarantee approval.