by Lyle Daly | Feb. 25, 2021
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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 get and benefit from a business credit card. Here's why business cards are still worth a look, even if you aren't a business owner.
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.
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 -- though those popular expenses tend to be the most common.
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 cell phone 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.
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.
Of course, 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.
If you want the biggest sign-up bonuses, you may need to check out business cards, as that's where some credit card companies place their best offers.
Chase is one prominent example. On the one hand, the Chase Sapphire Preferred® Card offers an impressive 60,000 bonus points after you spend $4,000 on purchases in three months. But if you're open to a business card, the Chase Ink Business Preferred℠ Credit Card offers 100,000 bonus points after you spend $15,000 on purchases in three months.
There's obviously a huge difference in how much you need to spend to get those bonuses. However, if you spend enough, that Chase business card will get you a lot more points.
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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