I’ve mentioned before that you can sign-up for both a personal card and a business card when issuers offer both. There are several reasons that you should take advantage of a business card, but first and foremost is that a business card is a separate card that comes with its own credit limit and, more importantly, its own sign-up bonus. You can often get twice the points by opening both a personal and a business card.
Here’s everything you need to know:
Having a Business
- You might already have a fully operational business. If so, good for you, you’re on your way.
- If you don’t have a business, good news! You might have one without realizing it! Do you sell on eBay? If you do, you can have an eBay sales business. If you don’t, toss something up on eBay and you’ve got a business going.
Applying for a Business Card with Your Business
Type of Business
- Typically when you fill out the business credit card application you will apply as a sole proprietorship and provide your Social Security Number instead of a Federal Tax ID.
- Some of the credit card companies may ask for a DBA, or “doing business as” form that you can get for $10 at your county court house.
- Usually, the applications won’t ask for any sort of tax filings or business tax filings or incorporations or anything like that. If, however, the credit card company asks you to provide incorporation documents, tax filings, company bank statements or company utility bills, then it’s up to you to make the decision to incorporate and continue with these cards or not. If you want to go down the incorporation route, you can register a company through The Company Corporation.
Always Tell the Truth
- When you fill out the application you MUST tell the truth. Don’t lie. Ever. If it’s a brand new business and there aren’t any sales, you must state that the business has no revenue if asked.
Your Business Name
- If you’ve got a pre-established business, the name you put down on the card application will obviously be the name of the business. This is also the case if you register your business.
- If, however, you haven’t filed anything and you’re applying as a sole proprietor, the name of your business should be your name. That’s it. You don’t need to add “Limited” or “Company” or “Inc.” or anything else. It should just be your name.
- If you’re filling out the application as a sole proprietor, your position should be owner.
- If the application asks for business income, tell the truth. If the company makes no money, put down $0. If it asks for gross family income, put down your annual household income.
- Even though this isn’t a personal card, when applying for a business card you’re personal credit report will be checked.
- However, balances carried on a business card typically won’t show on your personal credit report. I don’t usually recommend carrying a balance, but if that’s something you do, this may be a perk.
Applying for Both
- You can apply for both a personal card and its business equivalent at the same time. They will probably deny one of them but you can then just call them back and tell them, “Hey, I have a business and I also have personal needs. I want to be able to separate my spending between business and personal.” They will usually say, “Oh, thank you” and approve them. One of the things that people are so afraid of is getting a denial—the only thing that hurts your credit is the inquiry, which will ding it by two to five points. And that’s one of the great things about applying for both cards together: some companies will only do one inquiry for both applications.