Business credit cards include certain benefits that personal credit cards sometimes do not. A business credit card can open up a whole world of economic possibilities for a person to grow independently.
If you are interested in applying for a business credit card, you are probably asking yourself this question: Would it be possible to get one without having a business? In short, the answer is “it depends.” Here’s why.
Applying for a card without a business depends on several things
In most banks, the bar for measuring a “business” is not that high; it is not a mandatory requirement that you run a corporation. Many self-employment activities qualify you to apply for one without any problems.
Essentially, any way you generate your income as a freelancer is considered a business. Even when you don’t start generating profits, there are many options for applying for a business credit card.
Undoubtedly, the first requirement is that you have a stable credit history and that, from then on, you can continue with the card. Although some banks will ask you to be a registered business owner, this is not always the case.
How to apply for one when you do not have a business?
In the case that you do not own a registered business, there is a possibility that, depending on the bank, you can apply for one anyway. It all depends on how you go about the application process.
In this case, when filling out the application, you will have to input your data as the sole owner using your social security number as your business identification number. Banks recommend this to freelancers looking for the opportunity to grow financially with these cards.
In the case of business contact information, there is no problem with using your home phone number and address. You can also explain what kind of business you do, how long you have been doing it, and how much income you have been generating if any.
Advantages of a business card over a personal card
There are several key differences between having a business credit card and a personal credit card. Most of these, are in terms of the credit possibilities offered by both and the possibilities it gives for you to grow financially.
Separate your work credit history from your personal credit history
With a business credit card, you create a gap between your personal and business expenses. Allowing you to facilitate the payment of taxes and the division of business and personal expenses at the end of the year.
One of the biggest benefits is that, as a business, you can access higher bank credits. At the same time, this allows you to expand your range of expenses without leaving your credit history at the limit.
You are responsible only for business expenses
Your personal history will not be affected if your company does not pay its credit debt. As such, the company must pay the debt; as an entrepreneur, your personal accounts are absolved.
Banks offer their business customers benefits such as travel insurance, increased collateral, anti-scam security, and even higher cashback percentages.
Build your business credit history
In case you are a new entrepreneur and for your personal benefit as well, you will need to build a credit history for banks to trust you. A business card is ideal to start building this history, which will make you eligible for more benefits.
Possibility of getting cards for your employees
Most banks allow companies to apply for credit cards for some of their employees. Employee business cards can be managed by both the owner and the employees themselves to manage greater control of expenses.
Which business card should you apply for?
Each bank has different business card options, each with its characteristics to approach the potential applicant. They all offer different benefits that seek to support businesses’ emergence and economic maintenance.
For this reason, as in any economic aspect, it is important to be guided and prepared. Choose the one that best suits your business and your needs.
There are business cards focused on purchases, traveling or starting a company, and delegating payments to your employees. Each has its own benefits, points, and commission percentages to consider when applying for it.
So we could say that choosing a business card is something subjective. It is directly related to what your company needs and what the bank of your choice offers.
Crail, Chauncey. “8 Things To Know Before You Get A Business Credit Card – Forbes Advisor.” Forbes Advisor, Forbes, https://www.forbes.com/advisor/credit-cards/things-to-know-before-you-get-a-business-credit-card/.