Signing up for credit cards through partner links earns us a commission. Terms apply to the offers listed on this page. Here’s our full Advertising Policy.
Andrew W: When I got my first few business credit cards, my life suddenly became much simpler as a business owner. It was easier to keep my business expenses separate, the intro bonuses helped me on business trips when I was tight on cash, I got peace of mind from the purchase protection benefits, and I got great rewards rates for my business expenses.
Many of my self-employed friends have told me they would love to get a business card for those same reasons, but don’t believe they qualify because their business is relatively new and makes very little income.
So they are shocked when I tell them that even as a new business with very little business income, it is possible to get approved for a business credit card! This is because many banks will consider your other sources of income as well.
In fact, my very first credit card was the Chase Ink Business Preferred. I had only been in business for 1 year, and was approved for the card with just $500 in annual business income, as a sole proprietor with just my social security number! Now I did have my regular full-time employment income which I’m sure played a significant role in my approval, but the fact that the business itself had only $500 in annual income was not an issue!
I’ll go through what qualifies as a business, what banks may consider when reviewing your application for a business credit card, and why it’s possible to get a business card even if you have a new business with no income.
What Qualifies as a Business?
If you do anything outside your regular day job for profit, you’ll qualify for a business credit card! Doing any type of yard work or maintenance, selling items on eBay, and tutoring are all activities that qualify you as a small business owner. In other words, you don’t have to be an executive at a large multi-million dollar corporation to qualify for a business card.
If you are a small business owner, you can take a look at some of the best business credit cards depending on your specific goals.
And while many business owners file a separate business license or formally incorporate their company, it’s not necessarily a requirement for a business credit card!
Now there are a few reports online of people who have been asked for proof of existence of the business when they applied for a business credit card. In many of these instances, they were able to satisfy the bank’s request by providing proof of a business EIN. You can obtain an EIN through the IRS website for free.
Why I Love Business Credit Cards
It may not seem like much to get a business credit card, but as a small business owner they really have made my life so much better, and it can do the same for you!
- Separate your business spending from personal spending, making it easier to find write-offs and deductions when it comes time to filing taxes
- Welcome bonuses can help fund travel-related items, like airfare, hotels, or car rentals. This comes in very handy especially for new startups that may be strapped for cash!
- Purchase protections and other perks, like cell phone and car rental insurance
- Rewards for your everyday purchases
When I first started my business, I was buying a lot of things! So it really helped soften the blow knowing I was getting a great rewards rate on my Chase Ink Business Preferred credit card:
- 3X Chase Ultimate Rewards points for every $1 spent on travel, shipping purchases, internet, cable and phone services, advertising purchases made with social media sites, and search engines (up to a maximum of $150,000 in combined purchases per account anniversary year)
- 1X Chase Ultimate Rewards points on all other purchases
- Up to $600 in cell phone insurance when you pay your cell phone bill with the card
- 25% bonus when you redeem points through the Chase Ultimate Rewards travel portal
- Primary auto rental insurance (CDW) when renting for business purposes, plus purchase and extended warranty protection
Those points are worth $800 in cash back or $1,000 in travel if you book airfare, hotels, or car rentals through the Chase travel portal! And you have the ability to get even more value out of those points by transferring the points to any of Chase’s travel partners.
So How Can You Get Approved With No Business Income?
I often get asked how it’s possible to get approved for a business card with very little business income. And while every bank has a different set of criteria, it’s because the business income is just one of several items they look at.
Many business credit cards are personally guaranteed. So the bank will look at both your personal and business income combined. They will also look at your personal credit history. So if you have a good credit score and other income besides your small business, you’ll have a better chance of being approved.
Banks can also consider your relationship with them. In my case, I’m sure it didn’t hurt to have had a 10+ year relationship with Chase already, and an excellent payment history on multiple personal credit cards with them.
Ultimately, the bank has the final say in whether you will be approved, and every lender has different approval criteria. So even though you may qualify at one bank, it doesn’t mean you’ll be eligible for a business card at another bank.
Many banks will look at both your personal and business income when deciding whether to approve you for a business credit card. So even if you have a new business with little to no income, it is possible to get approved for a business card if you have other sources of income and a good credit score.
And you don’t need to be an executive at a large corporation to qualify as a business owner. As long as you do anything outside your regular day job for-profit, you will be eligible for business credit cards.
If you are a small business owner, you can apply for the best business card for you.
Did you have success applying for a business credit card as a new business owner? Feel free to share with us in the comments below!