Is it Possible to Obtain a Corporate Credit Card Without Having an Established Business?
Getting a Business Credit Card for Your Side Hustle: A Guide
For freelancers, part-time entrepreneurs, and gig workers, the world of business credit cards can seem daunting. But fear not, for obtaining a business credit card for your side hustle is within reach. Here's a simplified guide to help you navigate the process.
Firstly, it's important to understand that approval for a business credit card is typically based on your personal credit and financial history, not the financials of your business. However, you must demonstrate that you earn income from a qualifying business activity, such as driving for Uber or food delivery, even if it's part-time or freelance work.
When it comes to selecting the business structure, choosing a sole proprietor is a suitable option if you don't have employees and haven't filed paperwork to establish a legal business structure. Using your own name as the business name and personal contact info is usually acceptable.
Key qualifications and considerations include a good credit score (usually above 670), personal income, and business income. Lenders will check your credit score and history because business credit cards often require a personal guarantee. Higher income can enhance approval odds, but even small or part-time business income may qualify.
You'll need to provide personal info (name, Social Security Number, address), business info (name—which can be your own—business industry, business type, revenue, tax ID), and agree to a personal guarantee in most cases.
Business credit cards can be used to build your business credit history and simplify business tax filing. They can also offer bigger sign-up bonuses and higher credit limits than personal cards in many cases. For instance, the Capital One Spark Cash Plus currently offers a significant sign-up bonus.
If you're looking for a card without a personal guarantee or credit check, options like corporate cards (e.g., Brex) exist, but these often require more formal business structure or revenue.
In short, you don't need a fully established or registered business to get a business credit card for a side hustle, but you need to prove you have business income from independent work, meet creditworthiness criteria, and provide necessary personal and business details on your application.
NerdWallet curates lists on the best business cards for different reward types, including best cash-back business cards, best travel business credit cards, and best gas business credit cards. Remember, using a business credit card for personal expenses is possible, but mixing business and personal expenses could lead to extra time spent sorting through statements during tax time and potentially jeopardizing limited liability protections for businesses with such protections.
Examples of businesses that can qualify for a business credit card include dog sitting, reselling items on e-commerce sites, babysitting, tutoring, occasional freelancing, giving music lessons, driving for rideshare companies, and delivery services.
Small-business credit cards offer benefits such as high rewards in specific categories, expense-tracking tools, and the ability to get additional cards for people who work with you.
So, whether you're a casual entrepreneur or a part-time freelancer, a business credit card can be a valuable tool for managing expenses, building credit, and simplifying tax filings. Happy hustling!
- For those who are freelancers, part-time entrepreneurs, or gig workers, obtaining a business credit card for your side hustle relies heavily on your personal credit score and financial history.
- When applying for a business credit card, you must provide personal information, such as your name, Social Security Number, and address, as well as business information like the name of your business, business industry, type, revenue, and tax ID.
- Small-business credit cards can offer expense-tracking tools, high rewards in specific categories, and the ability to get additional cards for people who work with you, making them valuable tools for managing expenses and building credit.
- Personal advice on making the most of business credit cards suggests avoiding using them for personal expenses to prevent potential jeopardizing of limited liability protections for businesses and to minimize extra time spent sorting through statements during tax time.
- Comparing different business credit card options from various finance apps or personal-finance websites like NerdWallet can provide important insights on the best business cards for cash-back, travel, or gas rewards to fit your specific needs and side hustle.
