5 Reasons to Check Out Business Credit Cards Even If You Don't Own a Business
Business credit cards are packed with valuable features. If you're shopping for a new credit card, it's smart to consider both your personal and business card options.
Most consumers don't pay much attention to business credit cards because they assume these cards are only for business owners. If you don’t own a business, there may not seem to be any reason to consider this type of card.
Even though that sounds logical, it's not the case. You could still open and benefit from a business credit card. Here's why business cards are worth a look, even if you aren't a business owner.
1. You don't need a business to get a business credit card
You may be surprised to learn you don't need to have a traditional business to be eligible for a business credit card. You can qualify if you have any source of income outside a regular job. You could open a business credit card if you're a freelancer or self-employed. You could get one with a small side hustle, or even if you just sell things online every now and then.
You can even get approved if you're starting a business and it doesn't have revenue yet. Let's say you're planning to launch a store on Shopify. You could apply for a business card before you've even made a sale. Business credit card applications always require your personal income information, and card issuers can use that to approve you.
There are so many ways to get a business card. You shouldn't rule one out just because you don't have a registered business.
2. Business credit cards offer different types of bonus categories
Many of the best rewards credit cards offer bonus categories where you can earn extra points or cash back. There are cards that earn more on gas and groceries. There are credit cards for dining purchases. And there are cards with other bonus categories, such as travel or streaming services.
Business cards are aimed at business owners. As such, they often have entirely different bonus categories. For example, you could get a business card that earns more back on cellphone and internet service, on shipping purchases, or at office supply stores.
By getting a business card, you can start earning bonus rewards in different areas. This will be especially helpful if you have atypical spending habits.
3. You could qualify for a higher credit limit
Business owners generally have more expenses than ordinary consumers. Credit card companies understand this, so they'll sometimes issue higher credit limits on business credit cards.
We should note that income affects credit card applications, whether you're applying for a personal or a business card. But if you want a high credit limit, you have a better chance of getting one with a business card.
Just remember that no matter how high your card's credit limit, it's important to follow a budget and avoid overspending to stay out of credit card debt.
4. You'll have more opportunities for sign-up bonuses
Sign-up bonuses are one of the best credit card benefits. These bonuses usually require that you spend a certain amount within a set timeframe. If you do, you earn a large amount of rewards points or cash back.
Both consumer and business credit cards offer sign-up bonuses. When you're open to either type of card, it gives you far more bonus opportunities. This is especially helpful if you've already exhausted the bonuses on consumer credit cards.
Let's say you want to earn more Chase Ultimate Rewards points, but you already have one of the Chase Sapphire cards. You can't qualify for another one of those, but there's another option. Go with the Ink Business Preferred® Credit Card, which offers a big sign-up bonus. Although it's a sizable spending requirement, it gives you a way to collect a big chunk of Chase points.
5. Most business credit cards don't affect your credit utilization
One of the most important factors in determining your credit score is your credit utilization ratio. This is the ratio of your credit card balances compared to your credit limits. The lower your credit utilization, the better it is for your credit score.
Most credit card companies don't report balances for business cards to the credit bureaus. That means your business card's balance won't go on your credit report or affect your credit utilization. Even if you have a high balance on a business card, it likely won't hurt your credit.
Keep in mind that a select few card issuers do report business card balances. To confirm whether or not your card issuer does, you can call and ask. And again, it's still important to avoid overspending and credit card debt.
A business credit card can be an excellent addition to your wallet. When you look at the top credit cards, don't forget to see what kind of perks business cards offer as well.
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