Yesterday, we saw the 3 Ways You May Qualify For A Business Credit Card. Today we’ll walk through how to fill out a business credit card application.
In the comments on Use The 2-Browser Trick To Earn 150,000 Free AAdvantage Miles, Million Mile Secrets reader Larry (Thanks, Larry!) suggested to another commenter (I’m so lucky to have readers who like to share their knowledge!) :
“You might be able to apply for the 75,000 AAdvantage Bonus Miles – Visa Business card. They should let you have both a personal and a business card. Just be sure to use your name as the business name and use sole proprietor.”
What’s A Sole Proprietor?
A sole proprietor is a person who owns and runs a business him or herself.
In a sole proprietorship, the business and the individual are considered to be the same. However, being a sole proprietor carries risks since the business and the individual are considered the same and so you are personally liable for the business debts and for paying taxes on your business income.
When you apply for a business credit card as a sole proprietor, banks pull YOUR credit score, assess YOUR income, and use the information on YOUR application in order to make a decision to grant credit. That’s because, as a sole proprietor, you are liable for your business debts.
The good news is that if you’ve got a good credit history and adequate income, you may be approved for a business card as a sole proprietor!
Now, as a sole proprietor, your business may be in your name, “Becky Baker” or in a trade name (also called “Doing Business As” or DBA), for example “Custom Cookies”
Many states do not require sole proprietors to register for a business license if they are not using a trade name or DBA, but check with your state’s Secretary of State office.
How to fill out a business credit card application as a sole proprietor
The application has the usual section for personal information, but there is usually another section for business information.
Let’s review the information in the Business Information section of the Citi AAdvantage Business Visa credit card application form
1) Legal Name of Business: If you are a sole proprietor, your legal business name could be your own name, “Becky T Baker” or the name of your business (trade name or DBA), for example, “Custom Cookies.“
Now, you may be asked to verify your business name later on. To prepare for that possibility, it may be better to have the legal name of your business be the same name which appears on your utility bill or bank account statement.
2) Years in Business: For example, if you have been thinking of selling homemade cookies for the last year and have been buying ingredients to test different recipes enter “1.”
3) Name of Business for Card: This will be the name printed on the credit card. In her last application, Emily used the same name as the legal name of her business, which was her first and last name.
4) Is your business address the same as your home address?: If you’ve been selling cookies out of your house, enter “Yes.”
5) Business Phone Number: If the headquarters of “Becky T Baker” is in your kitchen, then enter your home telephone number.
6) Number of Employees: You have at least 1 employee (yourself) if you are a sole proprietor, so select the “1-5” option if you are the only employee of “Becky T Baker.”
7) Line of Business: For example, enter “Service” if you sell books or CDs, “Manufacturing” if you make cabinets, and “Farming/Agriculture” if you sell your home-grown tomatoes in the driveway!
8) Occupation: Enter “Becky T Baker’s” full time occupation.
9) Annual Revenue: Enter the total amount you receive annually for selling your home-made cookies.
It is very important to fill out all information in credit card applications truthfully. It is much better to say that you have no annual sales than to enter a fictitious amount. In her last business card application, Emily entered revenue of less than $100 and was still approved for the card.
Does your business have a Tax Identification Number?: Choose the option which says “No, my business is a sole proprietorship.”
Remember that a sole proprietorship is indistinguishable from the owner and the owner has to pay taxes for the business in his or her own personal income tax return.
Because you pay taxes for a sole proprietorship in your personal income tax returns, your Tax Identification Number is usually your Social Security Number!
After you submit your application, you may be asked to provide verification of your business.
This may be in the form of copies of your business bank account, utility bill, tax returns, business license etc. Citibank requested any 2 of the 4 documents above.
Since Emily applied for her business credit card in her own name, all she needed to do was to submit her utility bill and her business checking bank account statement. She was then approved for the credit card!
If you don’t have a business checking bank account, don’t worry. If needed, you can usually open a business checking bank account in less than 1 week at your local bank!
If you do have to call about your business credit card application, be prepared to answer questions about your business such as the length of operation, nature of business, etc. Be consistent, but truthful, in your answers!
Tips on how to get 225,000 AAdvantage bonus miles:
Now that you know how to apply for a business credit card, let’s review the strategy to get all 225,000 bonus AAdvantage miles!
In my original post on the 2-browser trick, I wrote:
“Here’s how to get all 3 cards and 225,000 AAdvantage miles:
- Apply for the Citi Personal Amex and Citi Personal Visa on the same day by using the 2 browser trick below. You will earn a total 150,000 miles for these 2 cards.
- After 65 days apply for the Citi Business Card and earn another 75,000 miles. If you apply earlier than 65 days your application will be automatically denied because Citibank likes to see 60+ (65 to be safe) days gap after a personal application and 90+ (95 to be safe) days after a business card application.”
Bottom Line: If you’ve applied for the 2 AAdvantage Personal credit cards (Visa & Amex) first, you should wait 65 days from the date of application to apply for the Citi Visa Business AAdvantage credit card with 75,000 bonus miles.
If you applied for the AAdvantage Business credit card first, you should apply for the 2 personal cards using the 2-browser trick after 95+ days from the date of application
I use this handy date calculator to add or subtract dates.
Have you been successful in getting all 3 Citi AAdvantage credit cards? Tell us how in the comments below!
This post does not constitute advice on ways to structure a business nor does it constitute tax advice. The sole purpose of this post is to illustrate how to apply for a business credit card as a sole proprietor. For advice on business structure and taxation specific to your situation, please contact a qualified lawyer or accountant.
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.