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This is the seventh post in a monthlong series that started here. Each post will take about two minutes to read and may include an action item that takes the reader another two minutes to complete. I am writing this for an audience of people who know nothing about frequent flier miles, and my goal is that by the end, you know enough to fly for free anywhere you want to go. Previously Amazon Payments, Gift Cards, Bluebird, and Kiva.
Applying for business credit cards is a great way to double your credit card rewards if you have a business. In two days, I will recommend the best current credit card sign up bonuses. Some of them are business cards, so you should understand who is eligible for business cards.
The last two days focused on figuring out how much you currently spend on credit cards and how to increase that number without increasing the total amount of money you spend.
If some of that spending is for your business, you should consider a business credit card.
Why should you consider business cards? How much extra free first class can they get you?
If you have an IRS-issued EIN (Employer Identification Number), you are ahead of the game, and the magical world of business credit cards is open to you.
If not you can apply for business cards with your social security number as a sole proprietorship.
Do you qualify for a business card?
Myth #1: A business must have employees.
Your business can be a sole proprietorship, meaning only you work on the business. That’s how MileValue started–just me–and I have received several business cards for MileValue.
Myth #2: A business must be profitable.
Businesses are set up to earn profit, but they aren’t profitable all the time. One time when almost no business is profitable is when it is just starting. That’s a time when you have to put money into the business before you can start making money from it.
A new business–even if it’s not making money yet–is still a business, and you can still get a business card.
Examples of Businesses You May Currently Be Running
Million Mile Secrets has a lengthy list of types of business you may be running that you wouldn’t necessarily have thought to open a business credit card for.
If you are currently involved in one of these activities or something similar, you may find a business card helpful for running your nascent business. After all, business cards are a convenient way to track all the expenses of the business in one place, making it easy to compare that to your revenues to see whether the business is profitable.
Getting a Business Card is as easy as 1-2-3.
- Select the right business card for you.
- Apply for the business card online.
- Call the bank to answer a few questions.
1. Select the right business card for you.
I’ll have more on the best current cards in a few days.
2. Apply for the business card online.
If my application isn’t instantly approved, I call the banks’ business reconsideration lines.
When the agent answers, I say, “Hi! I just applied for the [card.] I wanted to call and see if you needed any more information.”
At this point, the agent will find the application and ask you a few questions about your business relating to what it is; how long you’ve run it; and what its revenues, profits, and costs are. Answer these questions truthfully and politely, and you should have a decision within a few minutes.
If the rep asks why you want the card, you should answer honestly about your reasons, which probably have to do with tracking expenses and earning rewards for business activities.
If you have a relationship with the bank, you may want to highlight it on the call. Having a checking count or mortgage with the bank may make them more likely to approve you since they want to continue their relationship with you.
If you don’t think the call is going well, Daraius recommends politely hanging up and calling back. I did that recently with a personal card and was approved on my second call.
Here are the numbers I use:
American Express 866-314-0237
Barclay’s 866-408-4064
Chase 800-453-9719
Citi 800-695-5171
US Bank 800-947-1444
Caveats
If you apply for a business card, there are a few things you should know. First, there is a personal credit pull on your credit report. But after the pull, the card does not sit on your credit report, but on a separate one for the business.
Second, many consumer protections like purchase protection and rental insurance don’t exist with business cards.
Third, many business cards are charge cards that need to be paid in full each month. This shouldn’t be a problem because you should be paying all your rewards cards in full each month since their interest rates will quickly cost more than their miles are worth.
If none of that has scared you off, you can now roughly double the possible credit cards you can apply for because many personal cards have an equivalent or comparable business card. With all the extra miles, I’ll see you at the front of the plane next month.
Just getting started in the world of points and miles? The Chase Sapphire Preferred is the best card for you to start with.
With a bonus of 60,000 points after $4,000 spend in the first 3 months, 5x points on travel booked through the Chase Travel Portal and 3x points on restaurants, streaming services, and online groceries (excluding Target, Walmart, and wholesale clubs), this card truly cannot be beat for getting started!
Editorial Disclaimer: The editorial content is not provided or commissioned by the credit card issuers. Opinions expressed here are the author’s alone, not those of the credit card issuers, and have not been reviewed, approved or otherwise endorsed by the credit card issuers.
The comments section below is 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 questions are answered.
What are the ramifications/caveats to be aware of as it relates to the IRS? If I put a lot of spend on a business card, are there any tax implications that might end up hurting, helping, or otherwise affecting my standing with the IRS down the road? Do the banks report this info to the IRS?
My understanding is that miles from credit cards are considered a rebate not income.
Thanks for the reply. I was actually asking about actual spend. If I tell Chase that I have a sole proprietorship, does that mean I need to file taxes with the IRS for the “business” the card is issued to? In other words, if I tell Chase I buy and sell stuff on ebay in order to receive the card, does that activity and related spend to operate the “business” become taxable to the IRS?
My business is residential rental real estate. Chase asked me quite a few questions before they approved my Southwest business card. I’ve seen other blog comments suggesting that a rental business triggers more questions than many other types of businesses.
@UAPhil, same experience here. In fact, I am considering saying that my business is slightly different (house rehab, or something) next time just to see if it easier.
[…] This is the eighth post in a monthlong series that started here. Each post will take about two minutes to read and may include an action item that takes the reader another two minutes to complete. I am writing this for an audience of people who know nothing about frequent flier miles, and my goal is that by the end, you know enough to fly for free anywhere you want to go. Previously Why I Open Business Credit Cards. […]