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Do I need a real business to qualify for a business credit card?

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Anonymous
Not applicable

Do I need a real business to qualify for a business credit card?

Is it possible for an individual starting as an independent contractor to qualify for a business credit card?  This would be for the purpose of seperating deductable business expenses.  

 

I'd have a route that I have to drive spending several days or even a whole week on the road.  Expenses would be gas, eating out and motels.  Normal travel would possibly take in several states.  No international travel and it would be mostly driving.  If I fly, it would be one person maybe once a year for the annual convention if at all.  

 

Anyhow I was wondering if anyone else in this situation used a business credit card.  I was looking at Cap1 Spark.  Would I need a business name?  On the other hand I just PC'd my Cap1 Platinum to a QS no AF and they gave me a $1,000 CLI so I now have a $2,300 CL.  I figure use my Amex BCE for gas.  I would have my Citi DC $2,000 CL for personal expenses.

 

I'd be looking at 1 card for the business expenses and no more new cards for the next year or so.

Message 1 of 6
5 REPLIES 5
Anonymous
Not applicable

Re: Do I need a real business to qualify for a business credit card?


@Anonymous wrote:

Is it possible for an individual starting as an independent contractor to qualify for a business credit card?  This would be for the purpose of seperating deductable business expenses.  

 

I'd have a route that I have to drive spending several days or even a whole week on the road.  Expenses would be gas, eating out and motels.  Normal travel would possibly take in several states.  No international travel and it would be mostly driving.  If I fly, it would be one person maybe once a year for the annual convention if at all.  

 

Anyhow I was wondering if anyone else in this situation used a business credit card.  I was looking at Cap1 Spark.  Would I need a business name?  On the other hand I just PC'd my Cap1 Platinum to a QS no AF and they gave me a $1,000 CLI so I now have a $2,300 CL.  I figure use my Amex BCE for gas.  I would have my Citi DC $2,000 CL for personal expenses.

 

I'd be looking at 1 card for the business expenses and no more new cards for the next year or so.


Your title is a little misleading in that it seems like you want to get a business card without having a business (or even intending to start a business). Instead, It sounds like you are about to start a small business, is that correct? If that is the case, yes. many banks will establish a business credit card even if your business has not yet started. I suggest reading other blogs such as Reddit and many of the travel websites for more details. 

 

For your situation:

-Apply as a Sole Proprietor

-Business name would simply be your name (do not add contracting, consulting, transport etc...just your name-and yes, on the card itself your name would appear twice, no big deal)

-Use your SSN wherever EIN or TIN is requested

-Be honest; if you are just starting out enter $0 for business income; the bank will give you a separate field to enter your personal income

-Be prepared to recon a denial in some cases. Again, just be honest when you call them (if you even have to) and explain that you are starting a business, what it entails and what you expect to earn.

-You are personally responsible for all charges made to the card

 

Essentially, most small business cards are personal guarantee (meaning you are responsible for all charges); and therefore, it is really like opening a personal card for yourself only with the pretense of using it for business. 

 

If you have good credit please stay away from Capital One Spark. Spark will report to your personal credit report and I believe that even for the Spark card, Capital One pulls all three bureaus. 

 

If you have an existing relationship with Amex, I would suggest that be your first business card. Simply Cash Plus and Blue Business Plus are good choices as is a regular charge card. Amex Open cards do not report to your personal credit report (unless you default) and if you are an existing cardmember, they will most likely do a soft pull inquiry when you apply. Just to head you off in case you wonder why I mention the latter points: being able to have a business credit card that does not report to your bureau helps with utilization as your business expenses can go higher on the card without it effecting you and who doesn't love avoiding a hard inquiry? 

 

I opened two Amex Open small business cards recently and thanks to my excellent credit and relationship with them, both applications were instant approvals with no hassle. The difference between you and I is that I do have a few years of business income. Even my Chase Ink was not too difficult to obtain save for an address verifiction process that took way too long. 

 

TL : DR go for an Amex Open small business card to take advantage of your existing relationship with them. Later, if you need a Visa or MasterCard business card try for Chase (Visa) or Citibusiness AAdvantage (MasterCard). 

Message 2 of 6
Zolomon
Regular Contributor

Re: Do I need a real business to qualify for a business credit card?

I was succesful in opening an Amex Blue Business Plus as a sole proprietor using "(Last Name) Consulting". I quoted my personal income as the business income. I think Amex just needs you to be liable for the card, so applying as a sole proprietor is the easiest way to get an Amex business card without an EIN. I'm not so sure with other creditors.

Personal cards:

Business cards:

Message 3 of 6
Loquat
Moderator Emeritus

Re: Do I need a real business to qualify for a business credit card?


@Zolomon wrote:

I was succesful in opening an Amex Blue Business Plus as a sole proprietor using "(Last Name) Consulting". I quoted my personal income as the business income. I think Amex just needs you to be liable for the card, so applying as a sole proprietor is the easiest way to get an Amex business card without an EIN. I'm not so sure with other creditors.


Be careful with this.  Amex may be a bit more laxed with their business cards but that isn't exactly the same with others.  Another problem is quoting personal income on a business application.  Business and personal are separate.  Don't ever misrepresent yourself or your business on a credit card application.  And as an additional FYI, advocating such isn't alllowed here.

Message 4 of 6
Anonymous
Not applicable

Re: Do I need a real business to qualify for a business credit card?

I second going with an AmEx since you already have one. No HP. The Blue business plus would be my first choice. It's a good rewards card. They just base it off your personal credit.

Message 5 of 6
Anonymous
Not applicable

Re: Do I need a real business to qualify for a business credit card?


@Zolomon wrote:

I was succesful in opening an Amex Blue Business Plus as a sole proprietor using "(Last Name) Consulting". I quoted my personal income as the business income. I think Amex just needs you to be liable for the card, so applying as a sole proprietor is the easiest way to get an Amex business card without an EIN. I'm not so sure with other creditors.


I would not do this as you could be considered fraudulently filling out a credit application.   I put down 2k of business income and get approved for business cards.  I think you can get approved by putting down 0 business income.  And the people that seem to not get instant approval are the people who put down a lot of business income.  

Message 6 of 6
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