This post has been a long time coming. If you've been playing the points game, you likely already know about the power of business cards; but if you're just starting to dabble in points travel - you're probably thinking business cards don't apply to me, and that's where you may be wrong, and want to read on.
Below are some things to know about obtaining a business credit card and their importance of sustainability in opening credit cards for points travel, but let's start with the most obvious reason why people get business cards, if they don't have a "real business" and that is...
Why to Pursue Business Credit Cards
Strategy!!!
This goes back to that critical rule: Chase 5/24. Remember how I said that Chase won't approve you for a new credit card of any kind (personal, business, co-branded, Chase exclusive) if you have opened 5 or more credit cards in the past 24 months?
Well, it just so happens that business credit cards don't count in this 5/24 rule. Why? Because while you will have a credit pull to open a business credit card, once opened, business credit cards generally do not show on your personal credit report. Business credit cards are associated with a business and not an individual person.
Therefore, opening business cards for sign up bonuses and not having it count against your 5/24 is a major strategy to allow you to open more cards and maximize your point earn. Using business cards as part of our household strategy and referring one another to business cards, allowed my partner and I to earn hundreds of thousands of points!
In addition your points earned from your business cards are easily combinable with your points from personal cards (American Express combines these automatically for you).
You don't need a registered business to open a business card
What?! That's right, while registered businesses certainly can open business cards using their Employer Identification Number (EIN), which is a unique nine-digit number that the Internal Revenue Service (IRS) assigns to business entities operating in the United States (sort of like a social security number for a business); individuals actually can open a business credit card as a Sole Proprietor, utilizing your social security number instead of an EIN.
Okay, so what does that mean?
It means that if you do anything outside of your W2 job with the intent to make money, then you can qualify that as a business to open a business credit card under sole proprietor. Drive for Uber or Instacart? Business. Babysit or walk dogs? Business. Sell your used items on Marketplace or locally? Business.
Not to be confused with EIN above, but these types of sole proprietor businesses should report income of $400 or more to the IRS, but the business itself isn't taxed separately from its owner.
(I'm going to out on a limb and guess that many of may already be "running" a "business" and not even
know or report those earnings)
Okay, ready to fill out a business card application? Here's how!
Here are step by step instructions for Chase; but all banks are generally similar.
1. Authorizing Officer: Select "Owner" from the dropdown
2. Fill out your Personal Details.
3. For Identification: fill out the information requested. Ensure that the Tax-ID is selected as Social Security Number and enter your SSN.
4. Fill out your home address.
5. Provide your contact information.
6. Authorize the SS check.
7. Provide your gross annual household income (reminder: this is not only for yourself, but also includes the income of anyone living in the same household).
Here's where things get more "business-y".
8. Legal Business Structure: select "sole proprietorship"
9. Legal business name and name on card: This should be your legal name. That's it, nothing else.
10. Select "No" for DBA.
11. Input "0" for Number of employees
12. Under Business Tax ID, from the dropdown menu, select Social Security Number and input.
13. Select "yes" your business address is the same as your personal address.
14. Provide your personal phone number.
15. Business Financials: input your anticipate annual revenue (how much many you guess you make in a year). Honestly, I know people who have put $500 and gotten approved. There's no verification or uploads required to prove this number.
Similarly, for estimated monthly spend - there is no one tracking your spend on a business card nor is it monitored by the IRS. When we are working to hit the minimum spend on a business card, we put all of our life charges on that card, so my estimated monthly spend is usually a few grand.
16. Business Classification: This is really the last step of the business card application, and maybe the most daunting for some. There is a drop down window to select from. While you may not see your exact business model, select whatever you find is closest.
(For me, I resell a lot of items on various Facebook groups. I select Retail: Books, Music, Sports, Hobbies, Health, Fashion, Gas, Misc, for my category).
17. Once you select a business category, a new box will pop up for Business Type.
(Again, since I sell used items, for my business type, I select Used Merchandise Stores, which leads to a Sub-Type and I select Used Merchandise Retailers).
18. Employee Card: I do not add any employees (ie my husband). I keep that at 0.
And that's it! Then you submit your application and cross your fingers!
A Few Things To Note
Credit Limits: Especially with Chase, Business card credit limits can be infamously low, especially if you're applying with a business that only anticipates to make a few hundred bucks a year. Don't be discouraged by this, especially when trying to hit a minimum spend requirement that is higher than your credit limit. Simply spend, pay off, and spend more to get to that limit (It is NOT recommended to call immediately and request that the bank higher your credit limit).
Business Card Options: Like personal credit cards, there are a variety of business cards with various benefits and differences. In addition, the right business card for the right minimum spend can be a great way to take advantage of upcoming large costs or projects you have (for example, if you're getting a new deck and going to be spending thousands on it, consider getting a business card with a higher minimum spend (and therefore higher sign up bonus), than you could usually afford with you every day spends like groceries, insurance, utilities, and childcare. I did this with American Express Gold Business, when I realized how much we would owe on our federal taxes). I will go in to detail on some of these card options in a separate post.
Accessing Your Business Account: For Chase, you WILL need to create separate business log in credentials from your personal account. However, you can then call Chase and have your personal and business accounts linked. That way, in the future, when you log in, you can view both your personal and business accounts simply by using your business login credentials.
That's all folks!
Looking for more information on points/miles? You can find all of my points talk posts linked here
Curious what cards I (and/or my husband) have, and why? Read here!
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