Update: One or more card offers in this post are no longer available. Check our Hot Deals for the latest offers.
Million Mile Secrets reader, Kris, commented:
I (and perhaps many others) would really appreciate if you could write about small business cards qualifications. I do some infrequent consulting, but the income from this is very minimal. What are my chances of getting a small business credit card?
Should I even try? Which bank has more flexible rules?
Excellent question, Kris!
I called American Express, Chase, and Citi, to ask about their small business credit card requirements.
I’ll share what I found out. And give you tips for getting a business credit card of your own!
What Qualifies As a Small Business?
If you’re a small business owner, opening a business credit card is a great way to keep your business expenses separate from personal expenses – and earn more miles and points!
It’s an easy way to keep track of what you’re spending on your business. And the good news is many bonus categories are tailored toward small business expenses!
If you earn income for performing a service, or selling goods, you could have a small business. And anything you do as an independent contractor may also count, especially if you get a 1099 form for it!
To qualify as a small business, you must be for-profit. And you might even be eligible if you haven’t realized a profit yet.
Revenue and Income Requirements
When you fill-out a small business credit card application, the most important thing to remember is to tell the truth.
This is so important, you should hear it twice. Don’t lie on a small business credit card application. It’s better to tell the truth and be denied than to lie and go through a financial review with a bank.
If you’re a start-up and haven’t earned any income yet, put that! If you know for sure you’ll earn a certain amount, you can estimate to the best of your knowledge.
Banks want your business to grow! And they want to grow along with you.
But when you start out, your small business credit application will be based on your personal credit. So if you wouldn’t qualify for a similar personal credit card, you probably won’t be approved for a business credit card.
When you apply for your 1st small business credit card, include your business revenue with your personal income. Because you will be personally backing the credit for your business.
For example, if our reader Kris has a small business that earns $3,000 a year, and makes $50,000 per year as a teacher, Kris should list $53,000 as the total income.
Small Business Cards to Consider
1. American Express
Link: Starwood Preferred Guest® Business Credit Card from American Express
I’ve written about how to fill out an American Express small business credit card application.
The AMEX representative I spoke with said many small business owners get an AMEX small business credit card before they even open their doors!
However, if you have no revenue, they’ll have to look at your credit history instead of your business income.
Two great AMEX small business credit cards to start with are the AMEX Starwood small business card and AMEX SimplyCash.
You’ll earn 2 Starwood points per $1 spent with the AMEX Starwood small business card at Starwood hotels, and 1 Starwood point per $1 spent on other purchases. These points are especially valuable for hotel stays and flights! Read my review of the Starwood small business card.
AMEX SimplyCash gives you 5% cash back at office supply stores in the US and on your US wireless phone bill. You’ll also get 3% cash back on the 1st $25,000 you spend on eligible purchases in 1 bonus category you choose like airfare, car rentals, grocery stores, or restaurants.
Link: Chase Ink Plus
The Chase representative I spoke with said Chase looks at your overall finances before approving a small business credit card, similar to how they approve personal cards. They consider a banking relationship to be an asset, so having another Chase card or a bank account might help.
In the past, Chase has been very friendly to small business owners with little or no revenue. However, recently Chase seems to be looking for established businesses with future growth plans. I recommend applying for the Chase Ink Plus or Chase Ink Cash cards.
The Chase Ink Plus earns 5X Chase Ultimate Rewards points per $1 you spend on purchases at office supply stores, and on your cable and internet bills. The Ink Plus enables you to transfer your Chase Ultimate Rewards points to airline and hotel partners. Or use them for airfare, car rentals, and hotel stays at the Chase Travel Portal.
Chase Ink Cash earns 5X Chase Ultimate Rewards points (5% cash back) on the 1st $25,000 spent in combined purchases at office supply stores and on cell phone, landline, internet, and cable TV services each card year. I also like that you get 2X points at restaurants with no annual fee.
To transfer the points you earn with Ink Cash to partner airlines & hotels, you’ll need the Ink Plus, Ink Bold, or Chase Sapphire Preferred.
The representative I spoke to at Citi said I’d have no problem getting a small business credit card with no revenue.
She did tell me I’d be personally liable for all charges on a small business credit card, and that I could apply using my personal credit profile and income.
A Citi banking relationship is helpful, but not required. The credit limit you’re assigned is based on your personal credit score, and how much income your small business generates.
The CitiBusiness AAdvantage World Mastercard earns 2X American Airlines miles per $1 spent on American Airlines and US Airways purchases. Plus you get 1 free checked bag for yourself and up to 4 companions on the same itinerary! You’ll also get priority boarding on American Airlines and US Airways flights.
Other Considerations When Applying
When you have a small business you own and operate by yourself, it’s considered a sole proprietorship.
You do NOT need an EIN (Employer Identification Number) to apply for a small business credit card. You can apply with your Social Security Number. Either will work.
It helps to have a relationship with the bank before you apply, like another credit card or a checking account. If you really want to keep your expenses separate, you might consider opening up a small business checking account with the bank, too.
If you have other credit cards with the bank, you can offer to move part of your personal card’s credit limit to the small business card if you’re having trouble getting approved.
If you are denied at 1st, don’t give up! You can always call and ask to be reconsidered for the card.
Keep in mind you will be asked questions about your business. Be truthful and upbeat, and explain why you want the card:
- To keep your business expenses separate
- To help grow your business
- Because you like the miles or points, and want to try a new card
- Because you have a relationship with the bank and you like their service
- You have a lot of business travel coming up and want to earn miles or points with the airline or hotel
- Or whatever reason is most important to you!
And remember, if you’re not approved right away, you can always wait a few months and try again.
When you apply for a small business credit card, and have little (or no!) revenue from your small business, the banks will consider your personal credit profile and history instead. And you might already qualify for a small business credit card!
You’ll be fully responsible for all the charges on the card. And it helps your approval chances if you have a pre-existing relationship with the bank such as a checking account or other credit cards with them before you apply.
Here’s my list of the best small business credit card for travel rewards. Some have bonus categories for purchases at office supply stores, shipping, phone & internet, and online advertising.
Thanks for your question, Kris, and good luck with your consulting business!