How Individuals Can Apply for a Business Credit Card

Did you know that most individuals are eligible to sign up for business credit cards?

An individual who is doing any additional income earning business is running something that the IRS legally recognizes as a small business. It’s called a sole proprietorship. With a Sole Proprietorship, the individual name is also the business name. Instead of having a business tax number, you would simply have your social security number.

Your first task is to see if you’ve made a single dollar or plan to make a single dollar this tax year outside of your regular job for which you receive a W-2.

This can include even simple things like:

Selling items online
Coaching
Tutoring

In fact, I suggest if you don’t do it, you should start. Go invest $20 in inventory to sell on Ebay. After you’ve listed the product, you officially have your own sole proprietorship!

If you have a sole proprietorship, you can legally get a business credit card in your own name.

Here are some tips when signing up for a business credit card:

Tell the truth. List the actual sales if it ask for business sales. In your case, it might be $0. That’s fine. If you’ve just started doing a little business, then list 0 years for the time you’ve been running it. Never lie on a card application (or any application, for that matter).
Put your own name as the name of the business. Don’t add any formal sounding names (unless you actually have a company registered in something besides your personal name). They may ask for proof of a registered business, and you’d better hope you have some if you use a different name than your own.
Your business type is a sole proprietorship and you would be considered the owner.

This is a simple bit of knowledge that can double your credit card sign up bonuses because you can get one personal card and one business card.

People seem to run into issues with American Express and Citi when they try to present false information regarding a business that does not exist. If they think something is fishy, they will ask for verification. If you’ve told the truth, that won’t be an issue. The fact that some people have had so many problems with it causes a lot of people to walk away from business credit cards.

Instead, I suggest an alternative option.

Form your own business (LLC). These days, you can form your own business with ease.

The process will likely only take less than an hour of your time if you use a service like MyCorporation.com. It can cost anywhere from $135-$200. I paid $135 when I incorporated a business last year.

The biggest advantage of going through the process of legally applying for an LLC is that you’ll also be more likely to receive targeted business credit card offers. In a previous post, I mentioned in passing that I received a targeted 75,000 bonus American Express Rewards offer for my business. The value of those points is much more than the cost of forming the business.

While it’s not something you must do, it helps some people feel better about applying for a business credit card knowing they actually have a legal registered business.

Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are author’s alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.

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