Your Side Hustle Might Unlock an Unknown Financial Perk

Make your side hustle extra rewarding.

We take on side hustles for a lot of reasons. At best, it's because we've turned a passion into a source of profit. At the other end, it's out of necessity due to bills or, more recently, inflation.

Whatever the reason, a good side hustle can have a lot of benefits. Some of them are obvious -- like, you know, extra money. Some of them are less obvious.

For example, there's a big perk of running your own side hustle that many people overlook: small business credit cards. And taking advantage of this perk can unlock a whole world of rewards and bonuses that would otherwise be out of reach.

Your side hustle is a business

No matter how big or small your side business may be, it's still a business. Sell thrift finds on eBay? That's a business. Tutor the neighborhood kids in basket weaving? Also a business. Drive for Uber on the weekends? You're a contractor with, yes, a business.

For a typical side hustle, you're a sole proprietor. This means you include your business income as part of your personal income. However, in the eyes of the credit card issuers (and the IRS), you still own a business. And that qualifies you to apply for a business credit card.

Separated finances are happy finances

There are a few reasons why you might want to get a business credit card for your side hustle. The first -- and, arguably, most important -- is that it helps with your accounting.

Even as a sole proprietor, you need to keep track of your business expenses. And it helps a lot if you keep them separate from your personal expenses (especially at tax time). By using a business credit card for your business expenses, it makes it much easier to track and identify purchases made for your business versus those made for yourself.

Cash back and points and miles, oh my

As important as it is, however, easier accounting isn't the only reason to apply for a business card. There's also the rewards.

Business credit cards work just like personal cards in many ways, including the ability to earn rewards on your purchases. You can find cash back business cards. You can get business cards that earn points. You can even get some pretty awesome business cards with travel rewards.

What's more, business credit cards tend to have bonus rewards categories that personal cards don't cover. If you drop a pretty penny on advertising purchases every quarter, the right business card can help you maximize those rewards.

And let us not overlook the bonuses. If you're someone who likes to collect sign-up bonuses, you could easily run out of personal cards to collect after a year or two. Access to business card bonuses can mean twice the options for earning big bundles of cash back, points, and miles.

Keep an eye on the fine print

While business cards operate almost exactly like personal cards -- you make purchases and pay your card bills just like you would any other card -- there are a few minor differences.

For one thing, business credit cards aren't automatically covered by the same legal protections as personal cards. Take fraud protection, for example. By law, your liability for fraudulent card purchases is limited to $50 on personal cards. Business cards aren't covered by the same law.

That being said, issuers extend most, if not all, personal card protections to their business card offerings even though they're not legally required to do so. Just in case, though, be sure to read the terms and conditions carefully.

Another thing to keep in mind is that business credit cards require a personal guarantee. This means that you'll have to agree to take personal responsibility for the card -- and its balances -- when you apply. If anything happens to your side hustle, you'll still be on the hook for any debt on your business credit card.

If you decide to get a business credit card for your side hustle, it's important to treat it the same way you would a personal card. Pay your bill on time every month, keep your balances low, and spend responsibly. As long as you follow the rules of good credit card use, you can turn this side hustle perk into a big benefit.