3 Ways You May Qualify For A Business Credit Card

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A reader who asked not to be named emailed me the following question:

“Do you have advice on how I can get the Citibank VISA business card?”

I’ve received a few other emails asking the virtually the same question, so I thought I’d make it the subject of today and tomorrow’s posts.

What is a business?

Before we go any further, let’s review the definition of a business from Wikipedia:

A business (also known as enterprise or firm) is an organization designed to provide goods, services, or both to consumers.  Businesses are predominant in capitalist economies, in which most of them are privately owned and formed to earn profit to increase the wealth of their owners

Note the key elements in the definition:

  • Designed to provide goods and services
  • Privately Owned
  • Formed to earn profit

Also note that while businesses are formed to earn profit (why would you form a business to make a loss?), it doesn’t necessarily mean that they are currently profitable.

The word “organization” in the definition above refers to the ownership structure of the business which could be a 1-person sole proprietorship or a joint-stock corporation with thousands of shareholders.

Adam Smith wrote:

The propensity to truck, barter and exchange one thing for another is common to all men, and to be found in no other race of animals.

We may just not realize that many of our daily activities could be considered businesses!

3 ways which may qualify you for a business credit card:

1) Existing Business

You own an existing business.  For example, you are John Smith and you own Acme Plumbing.

Well, that’s easy then, isn’t it?  Just fill out the application form with your business information and hit submit!

2) Business Start-Up

In my experience, you don’t need to have an existing business to apply for a business credit card as a business start-up.

You could be contemplating starting a business venture and are applying for a business credit card to help keep your business expenses separate from your personal expenses.

Starting up a business is a very legitimate reason to want a business credit card!

I updated the post to mention that I learned about this method of getting a business credit card by talking to a Chase telephone representative.  I was explaining to the representative that Emily applied for the business credit card in order to to buy crafts and make paper bookmarks to sell on Etsy.com.

“Oh!” said the representative.  “You’re in a business start-up venture.  Here’s what we can do…”

Here are some potential start-up situations which you may have experienced:

  • Are you thinking of selling your stamp or watch collection?
  • Are you thinking of selling books on e-bay or Amazon.com?
  • Are you thinking of having regular yard sales and need to buy refreshments & candy for the visitors?
  • Are you on holiday in Turkey and thinking that you could sell that cool souvenir to your friends back in the US?
  • Are you thinking of selling your delicious homemade cookies as a side hobby?

So take a few minutes to think about your situation.  You just may find that you have a business start-up situation in your life that you never knew about!

Remember, in my experience, to get a business credit card as a start-up, all you need is the intent of starting a business.

Now start-up business are very risky to lenders (only 1 in 2 survive more than 5 years), so banks are usually stricter in approving business credit cards for start-up businesses.  Also, the banks will usually assign a very low credit line to business credit cards which are for start-ups.

3) You’re already in business but don’t know it!

I’ve observed  that many of us may be involved in business activities, but not know it.  That may be because our business activities produce a loss instead of a profit, and we usually associate businesses with profits!

For example:

  • If you sell used books or CDs on ebay or Amazon.com you may be in business.
  • If you have yard sales every 2 months, you may be in business.
  • If you buy trinkets while on holiday in the hope of selling them for a profit, you may be in business.

Remember, you don’t need to be an incorporated company to engage in business activities.  And don’t lie in the application!

In tomorrow’s post we’ll walk through how to fill up an application form for a business credit card.

If you liked this  post, why don’t you  sign-up to receive free blog posts in your email or in a  RSS reader …because that way you’ll never miss out on any tips and secrets!

What types of business activities have you been involved in, but have not considered to be a true business?  Tell us about them in the comments!

Disclosure: I don’t get any referral bonus or payback from Citibank for this post or for the links to the Citi AAdvantage credit cards.  In the spirit of full disclosure, I do own negligible amounts of Citigroup stock.

These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

145 responses to “3 Ways You May Qualify For A Business Credit Card

  1. Daraius –

    I would add to the 2nd category – or perhaps create a separate 4th category – that professionals who are licensed (Architects, Engineers, etc.) can also apply for business credit cards with the intention of providing consulting services to prospective clients. Since they are licensed by a state to perform professional services this is a great way to apply for a business card!

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  4. Hi Daraius

    I was trying to fill up the AMEX Business – Simply Cash card. Most field are ok but there is a compulsory FEID field.

    I dont have an existing registered business BUT based on the guidelines above I thought I would put the small sales etc I do on craigslist and ebay as part of my business.

    So what do we do on the application for FEID – It says it is a compulsory field ?

    This is not there on the Citi Application for a business card.

    Please let me know


  5. @Abdul – Your social security is your FEID number if you’re a sole proprietor.

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  7. What are the tax implications when applying as a sole proprietorship?

    For example, I understand that sole proprietorships are responsible for IRS tax for 1040, schedule C.

    However, it’s easy to consider a scenario where there is fairly high revenue, but no PROFIT … .Consider a business of selling old family/friend items on eBay. (1) The net sales minus eBay fees is less than original purchase price. Or (2) the net profit from the family/friend is less than the eBay/Paypal fees.

    Would a schedule C be required then?

  8. @Tom – Best to ask your accountant about that.

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  20. Do any of the card companies look at or share information with the IRS. A sales tax license may be required for what many of us would do as a business.

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  23. Hello. In reference to a startup company, is it ok to put down “0” for revenue for companies such as construction?

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  25. @mommafrica – It is if that’s the truth.

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  29. Hi Daraius. I applied for the Chase INK CASH card in November 2012 and was denied. My credit score is in the 760’s, I already had a personal checking account and Freedom card. I have no debt, pay bills off in full every month. This was my first attempt at a business credit card. I stated income was in the $2000 and the business was 6 months old.

    I would like to take a crack at the INK PLUS for the 70K UR points but don’t know if I qualify. My business is now 2 years old and I want to do it full time vs casually when I have free time. I applied, and was approved for the Sapphire Preferred card in November 2013 and my cash balance with Chase is higher compared to 2012.

    What are you thoughts on my chances?
    If they do deny me again, am I able to request that they shift credit line from my personal Sapphire Preferred to the INK PLUS?

  30. @Emily – I can’t comment specifically, but you’ve waited 1.5 years, so it could make sense to try again! Good luck!

  31. @Daraius. Success and I was instantly approved on the spot for the 70K UR Plus card. I stated zero as income. My banker was kind enough to rush me the card. I called to activate it this morning and one of the security questions they asked was if I could provide them the credit card number from another institution. I did not feel comfortable with this question so they gave me the option to wait for a call. I took that option and waited all day but no call. I go back to the same branch i applied for the card and the banker cant assist me because now my card is in pending review? What the heck? They tell me I now have to wait up to 48hours for an answer. I never had to encounter such difficulties activating a new card. This is a new one.

  32. UPDATE: Looks like all is clear. It turns out the representative who I initially spoke to activate my card must have been having a bad day. She flagged my account as potential FRAUD ALERT when I questioned her reason for providing a credit card number from a different institution. Her reason was, “Its just the process”. She told me that was the only way to activate my card or wait for a call. To tell a customer to wait for a call is fine but what she did was bump it to the fraud department. This was such low brow move. I had no idea until I received a call from CHASE fraud department! I explained to them the situation and they apologized and said they were just doing their job once an alert was placed on my account. I hope that representative gets a taste of bad karma.

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  34. I’m looking to get the 70k ink plus BUSINESS card so that I can transfer points on my personal account from chase freedom to the new business ink card for travel partner transfers. Is that possible?

    In other words, when I open up a new BUSINESS account, will it show up in my personal account, thereby allowing UR point transfers from my PERSONAL freedom to BUSINESS ink?


  35. @Emily – Thanks for the update!

    @Ed – Yes, that’s possible. It won’t show up in your personal account, but you can use the combine Ultimate Points feature to transfer points.

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  39. Just in case anyone needs to fill out a form 1040, I found a blank form here http://goo.gl/hnjEMM. This site PDFfiller also has some tutorials how to fill it out and a few related tax forms that you might find useful.

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  44. Would you recommend getting a business credit card even though your business is just an idea on a piece of paper? Would you recommend using a business credit card to finance such a large purchase? I am planning to open up a business within the next few months possibly a restaurant.

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