How to Qualify and Apply for a Business Credit Card in 2020

This post contains links to products from our advertisers, and we may be compensated when you click on these links. Our recommendations and advice are ours alone, and have not been reviewed by any issuers listed. Terms apply to offers listed on this page. Read our editorial standards.

It’s entirely possible that you could qualify for a business credit card even if you don’t run a thriving enterprise.

You may even be operating a small business in your life without ever having considered it as such. Any sort of for-profit business activities count as a business — even on a very small scale — can likely qualify you for a business credit card. And if so, it can make sense to sign up for and use a business credit card to keep your expenses separate and maximize your purchases.

Do you qualify for a business credit card?

If you get a 1099 instead of a W-2 for work that you do, such as driving for Uber and Lyft or freelancing part-time, you are conducting business activities that would likely qualify you for a business card.

However, conducting business activities isn’t limited to people who receive a 1099. Own a rental property? Sell stuff on eBay or Etsy? These activities generate taxable income and are also business activities, meaning there’s a good reason to keep your finances separate with business banking services like a credit card.

Don’t forget nonprofits

There are tons of small nonprofits that handle money, from youth softball teams to bowling leagues to flower clubs. A lot of these are run informally, but could use business banking services including a credit card. You don’t even have to federally register your non-profit organization. A lot of states have low-cost, low-overhead ways to register a non-profit organization, and this is sufficient to establish a business banking identity.

How to establish a tax identity

The foundation of obtaining a business credit card is establishing a separate tax identity for your business activity. Fortunately, this does not have to be complicated. Instead, all you need is a free tax ID number called an “EIN” from the IRS. You can sign up for an EIN for free on the IRS website. 

The EIN is required for filing payroll taxes if you hire people, or if you issue 1099s to other people. You may never do that, but banks track and manage business accounts using this number along with your social security number.

You’ll generally need an EIN in order to apply for a business credit card if you have a more formal business, but if you’re a sole proprietor — meaning you have a side gig like selling items online — you can apply for a business card using just your Social Security.

Don’t worry too much about income requirements

If you have a single rental property or a small side business like selling stuff on Etsy, it may not be generating a ton of income. That’s fine — banks evaluate your credit risk based on the total picture of your income and assets, because you will be personally guaranteeing the business credit card (and on that point, consider carefully whether this is a good idea if anyone else is involved in the business activity).

I have a rental property that generates $6,000 per year in income, and that was sufficient to qualify for a business credit card because the bank evaluated its risk based on my personal income and guarantee.

Signing up for a business credit card vs. a consumer card

Business credit cards often have very sweet incentives to sign up, but they can also be harder to get than personal credit cards.

When you sign up for a business credit card, you’re dealing with the commercial banking division of the bank. They operate differently, and the process with many banks tends to be more involved and take longer than getting approved for a personal credit card.

It’s not uncommon for banks to ask for additional documentation, and an in-person branch visit may even be required. Banks do take a higher risk with commercial lending than with personal lending, so they’ll want to get to know you and the business activity that you’re conducting before approving you for an account.

Business cards (usually) aren’t reported on your personal credit report

This may be a good or a bad thing, depending upon your perspective. Business credit cards don’t usually impact your personal credit report. That means business credit card spending will not help you build personal credit (because these products aren’t intended to be used for personal spending).

This also means that if your business gets behind on payments, it won’t show up on your personal credit — unless the business defaults entirely and the account is sent to collections. At that point, the debt becomes “yours” because you personally guaranteed it.

Note that some banks (such as Barclays, Capital One, and Discover) tend to report small business cards to consumer credit bureaus — meaning these cards can appear on your personal credit report.

Business cards are for business spending

Any spending you do on your business credit card should be related to the business — both for tax reasons and to stay in line with the bank’s terms and conditions. That being said, a lot of spending you’re doing personally today might more properly be categorized as business spending.

For example, if you drive for Uber, many automotive-related expenses such as gasoline, insurance, and repairs may be considered business expenses. Talk with your tax advisor to see where your business should be charging expenses.

Another thing to keep in mind is that when you take money out of the business, it doesn’t have to be in the form of a check. The business could pay you in an equivalent cash value, such as gift cards purchased with the business’ credit card.

Top business credit cards

If you’re now confident that you operate a small business, you’ve had the epiphany that dozens more credit cards offering valuable sign-up bonuses and ongoing benefits are available to you.

If you’re after a quick list of the best options for you, here are a few top picks to consider. You can see more in our guide on the best small-business credit cards.

Business credit cards aren’t an easy slam dunk, but they’re more possible to get than you may think. Given that, why not double up on welcome bonuses? When you’re flying up front in first class on an award flight booked with points from a card like the Ink Business Preferred® Credit Card, the effort will be have been worth it.

Caroline Lupini

Freelance reporter