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Anyone Can Apply For a Business Credit Card

by Ryan Guina

A lot of people don’t know this, but anyone can apply for a business credit card, even if they don’t own a “business.” All you have to do is use select “sole proprietor” as your business type, use your name as the business name, and use your Social Security Number as the tax ID number.

Who can be a sole proprietor? Anyone can claim to be a sole proprietor, which is the most basic type of business recognized by the IRS. According to the IRS, “A sole proprietor is someone who owns an unincorporated business by himself or herself.” This means that anything you do can be considered a business. This can include selling things on Ebay, holding garage sales, babysitting, freelance work, consulting, coaching, or anything else.

Even though a sole proprietorship is a legal business, there are no formal requirements such as paperwork or registration fees for starting a sole proprietorship. The only qualification to be a sole proprietor is to claim you are a sole proprietor. It’s as easy as that.

Note: It’s important to understand that with a sole proprietorship, there is no legal separation between you and your business. Your business and personal debts are considered the same.

Why business cards can be good for individuals

If you apply for a business credit card as a sole proprietor, you can use it for personal use as well. Some business credit cards are actually better than a card offered by the same company and branded with the same name.

Here are some of the reasons business credit cards can be good for individuals:

Better rewards and bonuses. Credit card companies know that most businesses charge more every month than individual customers and are often more profitable. This means the competition is fierce and credit card companies will do what it takes to recruit new customers. This works in your favor as they often have better cash back and rewards programs, and sign up bonuses to attract new customers.

Higher credit limits. Many business credit cards offer higher credit limits compared cards issued to individuals, because businesses often take in and spend more money than individuals. Why is a higher credit limit good for an individual? Because your credit score is determined using a formula that includes credit utilization (how much of your available credit you use). A higher credit limit can raise your credit score.

Balance transfers and 0% introductory offers. A lot of people use balance transfer offers to take advantage of credit card arbitrage (paying 0% interest on money borrowed from credit card companies). This can be a profitable enterprise. Others like to take advantage of 0% introductory offers so they can go out and charge some startup costs and pay them off over time without paying interest. When used correctly, these actions can either make or save you a lot of money.

Anyone can sign up for a business credit card

I applied for my first business credit card as a sole proprietorship, soon after starting this site. I later formed an LLC to make it easier to separate my expenses and I later signed up for another business credit card under my LLC. I currently use the The AmEx Gold Card and a Discover Business Card.


Published or updated April 6, 2012.
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{ 31 comments… read them below or add one }

1 Meg

Very true; I have a business credit card and it was not at all difficult to get. You basically just have to plug in a company name.

However it would be smart to actually “own” that company name which would be known as a “DBA” or “doing business as” name before you go around using it.

You can go down to the courthouse and pay $15 (in TX at least) and reserve any available business name as yours for a period of 10 years or so. Then with the piece of paper they give you you can also open business checking accounts and do anything else any business can do.

On a related note: I started getting offers in the mail for business letterhead, business cards, even shirts and other merchendise to put my business name/logo on after I got my business credit card. Any person can order and receive that stuff too! Realizing that made me realize I need to be more wary of every “business” despite their professional uniforms/cards/letterhead.

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2 Jesse

I really wish I had done this to start with. Ive over the years built up about 40k worth of points on my visa and its basically worth nothing. Their rewards are awful.

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3 Ryan

LOL. I got the mail offers for letterhead, pens and other paraphernalia as well. One company went so far as to send me a sample pen with the name of my LLC on it and a package to order more of them. The pen is nice, but I don’t really advertise my company. I only formed it to separate my business expenses for this and other sites. Good idea for them though! :)

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4 Ryan

Tough break, Jesse! I always go for the cash back! :)

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5 Dividend Growth Investor

Cash Back is king. I am wondering however if there’s any credit cards that give good points ( more than 1 point for every dollar spent) that could convert into real cash ( a check sent to my door in my name).
I use Chase Rewards and they apply the rewards directly to my balance. Which is nice, although I want to simply get cash for whatever reasons..

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6 Ryan

There are some cards that you can convert points to cash, but the conversions are always different depending on the card company. That’s one reason I prefer cash; I always know the conversion rate. ;)

There are some rewards cards that do pay cash and don’t apply your rewards to your balance.

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7 RCJackson

Hello! Sorry to be a stickler, but the IRS doesn’t allow “anything” to be a business.

It’s really important that it is NOT a hobby and you are engaged in the transactions for the purpose of profit and a form of self-support (not just extra cash on the side) by incurring consistent time and expense into marketing and organizing the business.

Haha, what a downer, right?

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8 MoneyEnergy

thanks for pointing this out, I did not know this. But yeah, I would definitely want to know more about the different types of businesses before doing this personally, just for my own sake. Especially with taxes. If you’re a sole proprietor, do you do two sets of taxes, etc.

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9 Ryan

MoneyEnergy,

Sole proprietors only do one set of taxes. As a sole proprietor, there is no distinction between the money earned in your business and your regular income. This is not always the case for other business types.

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10 Dividend Growth Investor

I remember vaguely from my tax class that in order to be considered as a business for IRS purposes, you have to earn a profit for at least two out of the past five years. The thing is that if you are losing money on this “business” IRS could contest that this is actually a hobby and you lose a preferential tax treatment.

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11 Ryan

That’s true if you are taxing your income as a business, but my understanding of a sole proprietorship is that there is no separation of business and personal income. But I’m not a tax pro, so be sure to talk to one before filing taxes. :)

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12 Ryan

Next Millionaire,

Some business cards have annual fees, so that is something you want to look out for. That is actually why I signed up for the Discover Business Card. It has a great cash back program, gave me a $100 sign up bonus, and doesn’t have any annual fees. It’s a very good business card.

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13 Livia

what credit cards can i apply for using business credit only?

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14 Ryan

Hello Livia,

To answer your question, the two business credit cards I linked to in the article are great cards to choose from. Here is a list of the Best Business Credit Cards.

Other good business credit cards can be found in this article – Best Gas Rewards Cards.

All of the cards in this e-mail come with cash or point rewards systems which will earn you additional cash back on items like gas, office supplies, cell phone service, restaurants, and more.

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15 TJ

I’m a bit skeptical. With most crdit cards, they will show instnat approval, however with the business one, they said they would send me a decision via mail in 14 days. Maybe they’re more selective now than when this blog was written?

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16 Ryan

TJ, yes, the business credit card market and the credit card market in general have changed in the last year and a half since this was written. Credit was much easier to receive a couple years ago. However, don’t let that discourage you. There are many good options to choose from. Check out this article: Best Credit Cards: Cash Back and Rewards Points.

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17 TJ

Wish I knew that before I applied! Hope if it gets declined it doesn’t negatively affect my credit score.

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18 Ryan

TJ, it shouldn’t affect your score much if you aren’t approved. It’s usually a couple points at most, and the effect goes away as time passes. I wouldn’t be concerned.

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19 badamex

I got a SimplyCash business card a little over a year ago partly based on this article. I recently saw an ad where they changed the terms and there is now a $50 annual fee after the first year if you don’t spend at least $20,000.

I emailed Amex and they said I am subject to the new fee rule and not grandfathered in. Can you suggest how to get out of this?

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20 Ryan

badamex, I’m not sure what can be done other than to contact AmEX and ask them to switch you to a business card that doesn’t have any associated fees (I’ve done this before, they are usually good about doing it over the phone). If you don’t want to stick with AmEX then check out this list of Best Business Credit Cards. The Ink Cash(SM) Business Card has a great rewards program, no annual fee, and is accepted in more locations than American Express cards.

As for the annual fees and changing terms, most of that stemmed from the Credit Card Act of 2009, which changed how credit card companies could do business. Many companies took that as an opportunity to change terms and raise fees before the changes went into effect. It’s unfortunate, but there was no way to predict it. A lot of consumers are upset with some of the changes, and many consumers are happy with other changes. If you an’t make it work with AmEx, then I would find a new card. Best of luck.

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21 20 and Engaged

I think I’m going to hold off on applying for a business credit card until I turn the business into an LLC.

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22 CJ

I have a question. I am currently in a sales position with a company that produces revenues in excess of $40 million annually. Our sales force is small and the company does not offer business cards to the sales team. My monthly business expenses total around $5,000 and come out of my pocket and are later reimbursed by the company. I have been using my personal credit card for this. I want to separate these transactions from my personal card. I’m looking for a card with low/no fees , a moderate limit ($10,000ish), and flexibility in repayment – as my ability to pay off balances is dependent on how quickly the company reimburses me. I have limited credit history, and therefore a credit score that hasn’t grown much yet. Would I be able to apply for a business card, even though the business expenses aren’t technically my own?

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23 Ryan

CJ, anyone can apply for a business credit card – you would just use your SSN where the application calls for your business identification number. If you need a flexible payment schedule, then take a look at The Plum Card(R) from American Express OPEN, which gives a discount when the balance is paid within 10 days, and gives cardholders up to 2 months to pay back the charge without interest if they pay at least 10% on the statement date.

That said, I strongly recommend speaking with your company about having them issue you a corporate credit card – a company of that size shouldn’t expect their employees to pay for expenses out of pocket and file for reimbursement. At least not on such a large scale.

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24 chris

if you dont make enough to file taxes, would having a business card give you any new obligations for either tax or applying for social services, such as food stamps?

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25 Ryan Guina

It could give you new tax obligations if you have a separate business tax ID number (Employer Identification Number, or EIN). But it shouldn’t affect your ability to apply for social services.

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26 chris

ok thanks ryan, i cancelled it anyways, it was annoying me that the store clerks asked me for a PO number and just felt weird having it, everyone looks at me funny =p i didnt find the cash back to be any better than my amex blue cash everyday or the southwest miles. southwest is 2 percent back currently and the annual fee pays for itself and actually gives you a dollar. the amex gives 3 percent on groceries and 2 perecent on gas and dept stores like macys etc, and 1 percent on everything else including walmart etc

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27 chris

also i did read that business cards have less purchase protection for individuals. my credit limit was the same though as my other cards when i had it. simmons first platinum at 7.25 interest rate is a great keeper card if you ever carry any debt beyond those 0 percent interest card time periods tooo

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28 Shawn

It was the bank who approached to me first and issued me a business credit card for personal use because I didn’t have a business at all. But later they hiked my interest rate up and insisted that my debt is commercial debt but I think it should be personal debt because it was for personal use and I gave them my SS ect to warrant the card use. Does my argument make sense?

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29 josh

I am very interested in getting the Chase Ink cards, but in their credit agreement it specifically says the card is for business use only, and not for personal use. How is everyone getting around this provision? Is there some grey area or special case because you are a Sole Proprietor?

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30 Ryan Guina

You can get this card as a sole proprietor. They just run your SSN instead of a business EIN (employer Identification Number). I’m speaking from experience – there was an issue with my business address because I had moved and my business address wasn’t up to date in the system they were using, so they ran it as a sole proprietor and there were no issues opening the account. Overall, I’ve been very happy with it. I can only speak for my personal experience though.

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31 Josh

Well, I have no doubt I can open the account. My question is about usage of the card for personal purchases. It seems the credit agreement is that purchases will be for business only. I was just wondering if anyone knew about exceptions for this, or if people just weren’t aware?

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