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As a sole proprietor, you may be wondering if you’re eligible for business credit cards that offer travel points or cash back rewards.
The answer is yes!
Sole proprietors are not excluded from taking advantage of these valuable perks.
In fact, using a business credit card can help you build your credit score, manage your expenses, and earn rewards that you can use to reinvest in your business or even take a much-needed vacation.
In this article, I will provide some tips on how to answer a business credit card application, so you can start earning travel points and cashback that you can redeem for the vacation of your dreams.
Join Our Free Travel Miles & Points Facebook Group
Why Apply For Business Credit Cards?
As a frugal traveler, I have been leveraging business credit card sign up bonuses to travel the world for a significant discount.
By and large, business credit cards provide generous welcome bonuses (usually between 50K to 150K points) that can be ultimately used to redeem for free flights and hotel stays.
Business cards have very minimal impact on your personal credit scores and are relatively easy to get approved for.
In this article, you will learn about business credit cards and get tips on how to fill out two business credit card applications, so you can confidently complete one yourself.
The examples provided in this blog post were application questions from the following banks:
- Chase Business Credit Card Application
- American Express Business Credit Card Application
I Do Not Have a Company or an EIN. Am I Eligible for a Business Credit Card?
If you are an owner of a company or a self-employed full-time contractor, applying for a business credit card should be a walk in the park for you already.
But for part-time side hustlers who occasionally moonlight, filling out a business credit card application can be incredibly unnerving.
I could just imagine how it could get quite daunting to provide information, such as your company’s name and EIN (Employment Identification Number) when you do not have them.
It also does not help that there is a common misconception that seasonal side hustlers are not classified as business owners, thereby automatically disqualifying them from business credit cards altogether.
Nothing Can Be Further From The Truth
Regardless of the revenue, anyone who earns a profit from any type of venture is considered a sole proprietor and, therefore, eligible to apply for business credit cards.
In this post, I aim to demystify the business credit card application process so you can confidently answer the form even if you are a sole proprietor and do not have an EIN (Employer Identification Number).
Above all, I would like to increase your odds of getting approved so you can inch closer to your next bucket-list vacation.
Side Hustlers are Eligible to Apply for Business Credit Cards
Anyone who currently has a side hustle or is merely thinking of a future side hustle may be eligible to apply for a business credit card.
That’s right; you may be eligible even if you are just at the initial stages of your business!
Simply put, your side hustle does not need to be completely off the ground yet – you can also qualify while in the process of conceptualizing it.
Generally speaking, though, having an existing side hustle, regardless of income, fundamentally makes you a more qualified candidate, but it is not a requirement. Hence, any start-up is eligible.
What Businesses Qualify As a Side Hustle?
Any Side Hustle is Considered a Business.
Initially, I myself was skeptical if I would qualify for a business credit card when I first applied over a decade ago.
I was only “selling” junk on eBay and Craiglist periodically, and the income I received from it was inconsistent and barely enough to pay for gas.
When I got approved for my first-ever business card, I was beyond thrilled.
Do you mean I can get travel points to book business class tickets by selling random stuff online? Absolutely!
List of Popular Side Hustles
- buying and selling online (Facebook marketplace, Amazon, Etsy, eBay, etc.)
- tutoring
- driving for Uber/Lyft
- tour guide
- being an Airbnb host
- caregiving
- babysitting
- dog-walking
- instacarting
- door dashing
- coaching/consulting
- any manual labor you do on the side – plumbing, electrician, mowing the lawn, etc.
- having your own blog/podcast/youtube channel
- having a rental property
- any freelance gig that yields a 1099 come tax time
- your side hustle!
In a nutshell, you don’t need to own a multi-million dollar company in order to qualify for a business card.
Nor would you need to have a physical office either – your business address can be your primary residence.
In fact, you also don’t need to work in your business full-time. It can be part-time or seasonal, or a few hours throughout the year.
Any side hustle will do, regardless of the nature and structure of your venture.
As long as you are engaged in some form of activity to earn a profit, you are eligible to apply for a business credit card.
Income And Credit Scores
How Much Income Do I Need When Applying for Business Credit Cards?
When I started my side hustles over a decade ago, the income I generated from them was nothing to write home about.
I endured many years of floundering ventures until I got to where I am now.
Even though my business endeavors were fumbling then, that did not impact my eligibility to get approved for business cards.
So, I continued applying and traveling for free despite having numerous downturns.
The point is that “income” is not the only factor banks will consider before approving.
Instead, banks will most likely focus on your entire financial history to determine your viability. Thus, it is a recommended practice to cultivate a stellar credit score.
How About My Credit Card Utilization Rate?
The banks will also certainly assess your credit utilization rate, which is simply the ratio of your debt to the total credit you have.
The following formula calculates this ratio: “What You Owe” divided by “Your Total Credit.”
The lower your credit utilization rate is, the higher the likelihood of approval.
At any rate, as long as you have a side hustle, you could potentially get approved regardless of your current earnings.
In fact, you don’t even need to have a steady revenue stream.
Of course, who doesn’t wish for consistency in our income sources?
But if you are concerned that not earning enough could adversely affect your application, it generally wouldn’t.
How Do I Answer a Business Credit Card Application as a Sole Proprietor?
There are two components to a Business Credit Card Application.
- Business Information Section
- Personal Information Section
Rule Of Thumb: Be Truthful
Below are the typical questions included in a business credit card application and my cheat sheet on how to answer them.
The example below will illustrate how to answer a Chase Business Credit Card application.
This post will also provide an example on how to answer an American Express Business Credit Card application later.
Business Section of a Business Credit Card Application (Chase)
| Question | Answer |
|---|---|
| Legal Business Structure | Sole Proprietorship |
| Business Legal Name | Your Full Name (e.g. Kris Abad) |
| Desired Business Name on Card | Your Full Name |
| Does Your Business Use Another Name, Like a Trade Name, Assumed Name or DBA (Doing Business As)? | No |
| Tax ID Type | Social Security Number (SSN) |
| Is Your Business’s Physical Address The Same As Your Personal Address? | Yes |
| Number of Employees (Enter the number of all additional employees, not including yourself. Enter “0” if you’re the only employee.) | 0 |
| Business Phone | Same as Personal |
| Business Established Date | Indicate the date when you started to conceptualize your business |
| Annual Business Revenue | Estimated Annual Profit of your Business ($1000 or higher). |
| Business Category | Choose One/Select the Category of Your Particular Side Hustle. If your side hustle is Facebook Marketplace, then I would select “Retail: Automotive, Clothing, Food, Gas, Health, Home Goods” |
| Business Type | Choose any items on the drop-down menu. (Examples: Clothing, Home, etc.) |
| Business Sub-Type | Select from the drop-down. |
| NAICS Code | Leave blank |
| Estimated Monthly Spend | $50+ |
Personal Section of a Business Credit Card Application (Chase)
| Question | Answer |
|---|---|
| Authorizing Officer Title | Owner |
| First & Last Name | First & Last Name |
| Date of Birth | Your Date of Birth |
| Primary Phone Number | Mobile Phone |
| Mother’s Maiden Name | Your Mother’s Maiden Name |
| Email Address | Email Address |
| Tax ID Type | Social Security Number |
| Address Type | Domestic |
| Total Gross Annual Income | Your Annual Gross From All Revenue Streams (Full Time Job, Side Hustles, etc.) |
Before applying, I recommend that you read the entire blog post so you can determine your eligibility and know how to troubleshoot when denied.
Am I a Good Candidate for a Business Credit Card?
Since I value frugality and not frivolously spending on unnecessary expenses, I do not recommend applying for business credit cards if you are having a challenging time executing the following:
- Pay the bill on or before the due date
- Pay the bill in full
The goal is to fly for almost free. So, paying finance charges inherently defeats the purpose of this strategy.
Therefore, if you currently have existing consumer debt, pay them off first before applying for business credit cards.
Alternatively, if you have difficulty adhering to paying your credit card balances altogether, month per month, then I strongly suggest bolstering your savings account first by employing these heavyweight saving strategies.
Once you possess this new frugality habit and have saved up a decent emergency fund, you are more than ready to sign up for business credit cards.
Remember, paying banks ridiculously high-interest charges is never a good idea.
What Are The Chances That I Will Get Approved?
NOTE: Due to the COVID19 pandemic, banks have reportedly become more stringent in approving business card applications. It is still possible to get approved though, particularly if you have a stellar credit history and consistent income from your current side hustle. This will likely change when the economy stabilizes again.
If this is your first business credit card application, there is an increased likelihood that you will not get instant approval. But, please do not worry, this is quite common.
Typically, banks require some time to evaluate your application and assess your financial history & credit score, especially if this is your first time applying for a business credit card.
At the end of the day, they will still be at the losing end if the consumer has a high risk of defaulting.
If you have a credit history that paints a picture of an individual who is financially responsible, then chances are, you will most likely receive an approval letter in the mail.
I cannot emphasize the importance of maintaining an immaculate credit score (740+).
Should you get a pending approval or a denial, it is not the end of the world. Almost always, it is possible to reverse the decision by calling the bank’s “Reconsideration Line”.
Alternatively, please reach out to us at the free Travel Miles and Points Facebook group, and we can walk you through the next steps on how we can possibly reverse the bank’s decision.
You can also contact me directly by filling out this credit card consultation form.
Update: While Chase and Citi may not approve new business credit card applicants right off the bat, American Express, on the other hand, seems to be relatively more lenient.
Recommended Business Credit Cards
Chase Business Credit Cards
Three Chase Business Cards are offering lucrative sign-up bonuses right now. Yet, I would only recommend the two no-annual-fee cards as their minimum spending requirements are more attainable.
The Chase Ink Business Cash Credit Card
| The Chase Ink Business Cash® Credit Card |
|---|
| Annual Fee: $0 |
| Intro Offer: Earn $750 Cashback (75,000 Chase Ultimate Rewards Points) after you spend $6,000 on purchases in the first three months from account opening. |
| Earn: 5% on the first $25,000 spent in combined purchases at office supply stores and on internet, cable, and phone services per cardmember year. |
| Earn: 2% on the first $25,000 spent in combined purchases at gas stations and restaurants within the cardmember year. |
| Earn: 1% per $1 on all other purchases, with no limit. |
The Chase Ink Business Unlimited Credit Card
| The Chase Ink Business Unlimited® Credit Card |
|---|
| Annual Fee: $0 |
| Intro Offer: Earn $750 cashback (75,000 Chase Ultimate Rewards Points) after you spend $6,000 on purchases in the first three months from account opening. |
| Earn: 1.5% cashback on all purchases |
The Chase Ink Cash® Credit Card and Chase Ink Unlimited® Credit Card are both advertised as cash-back cards.
Thankfully, there is a way to convert cashback from these cards into travel points (Chase Ultimate Rewards Points).
The post below will walk you through the steps on how to do this conversion.
Lastly, Chase also has co-branded credit cards, such as the United Explorer Business® Credit Card, The World of Hyatt Business Credit Card, and Southwest Business® Credit Card, that generate travel points.
Yet, I prefer the Chase Ink Business® Credit Cards as they generate flexible currencies, meaning they can be redeemed in various ways – for flights, hotels, and cashback.
Before you apply, let’s go over one crucial policy you must be familiar with regarding Chase. It is called the Chase 5/24 Rule.
Simply put, your chances of approval for a Chase Business Credit Card hinges on whether or not you are below 5/24.
Chase Bank’s 5/24 Rule
There is one important consideration when applying for Chase Cards, including the recommended Chase Ink Business Cards above.
Chase instantly rejects applications if you have applied and gotten approved for five personal credit cards in the past 24 months.
This policy is popularly called the 5/24 rule. This is an important rule to be familiar with when applying for Chase cards. Sometimes you will notice people referencing this rule when describing their relationship with Chase, e.g., “ I am 2/24”, “I am 4/24″, etc.
Sadly, if you are at or above 5/24, there is no way to get around this stringent regulation except to wait until you get below 5/24.
Even though your application is contingent upon your 5/24 status, business cards do not add to it, thankfully, since only personal cards affect your 5/24 standing.
American Express Business Credit Cards
How to Answer an American Express Business Credit Card Application
| Questions | Answers |
|---|---|
| Legal Business Name | Your Full Name (if Sole Proprietor) |
| Business Name on Card | Your Full Name (if Sole Proprietor) |
| Company DBA Name | None (Check Company does not have a DBA) |
| Business Address | Your Address |
| Business Phone Number | Your Phone Number |
| Industry Type | Choose One Retail Trade (if Facebook Marketplace) |
| Company Structure | Sole Proprietorship |
| Years in Business | At least one year (include the time you were conceptualizing the biz) |
| Number of Employees | One (1) if you are the only employee |
| Annual Business Revenue | At least $5,000 (estimated revenue for the next 12 months) |
| Federal Tax | Leave Blank for Sole Proprietors |
| Role in Company | Choose Any |
| Estimated Monthly Spend | At least $100 |
The Blue Business® Plus Credit Card from American Express
| The Blue Business® Plus Credit Card from American Express |
|---|
| Annual Fee: $0 |
| Foreign Transaction Fee: Yes |
| Earn: 15,000 American Express Membership Rewards® Points |
| Minimum Spend Requirement: $3,000 in eligible purchases on the Card within your first 3 months of Card Membership. Terms Apply. |
| Earn: 2X Membership Rewards® points on everyday business purchases regardless of category, up to $50,000 in spend per year (1x thereafter) |
American Express® Business Gold Card
| American Express® Business Gold Card |
|---|
| Annual Fee: $295 |
| Earn: 70,000++ after spending $10,000 on eligible purchases within the first 3 months of Card Membership. Terms Apply |
| Earn: 4X points in the 2 select categories where you spend the most each month on up to the first $150,000 in combined purchases from these 2 categories each calendar year. |
| Earn: 1x Membership Rewards® Points on all other purchases. |
The Business Platinum Card® from American Express
| The Business Platinum Card® from American Express |
|---|
| Annual Fee: $695 |
| Earn: 120,000 Membership Rewards® points after you spend $15,000 on eligible purchases with your Card within the first 3 months of Card Membership. |
| Earn: 5 Membership Rewards® Points on flights and prepaid hotels on amextravel.com |
| Earn: 120,000 Membership Rewards® points after you spend $15,000 on eligible purchases with your Card within the first three months of Card Membership. |
| Earn: 1x Membership Rewards® Points on all other purchases. |
How Do I Meet The Minimum Spend Requirement (MSR)?
What is MSR (“minimum spend requirement”)?
To receive the above cards’ bonus rewards, you must meet a certain minimum spending requirement within a specific time frame. Failing to complete these conditions will forfeit your reward.
So, how exactly can you meet this spending requirement if you have yet to get your business off the ground?
That’s a valid question!
Banks typically do not have a way of knowing which expenses are wholly for business or personal, and truthfully, sometimes, the boundaries between those two categories are blurred.
If you feel that you cannot meet the minimum spend requirement and are in danger of missing out on the bonus, the related post below lists the strategies to assist you in fulfilling the required spending.
What If I Do Not Have a Business? Start One!
Do not fret, you do have a couple of options.
As mentioned above, applying for a business card is possible if you are still in the beginning stages of planning for a business.
As with all businesses, we all need initial capital to fund our “start-up” expenses, and sometimes the fund source can come from a credit card. Banks are aware of this.
Whether you plan to start a podcast or a dog-walking side job (or any of the examples above) soon, consider applying for business credit cards, as the sign-up bonuses can be truly rewarding.
Pro-Tip: Selling Stuff at Facebook Marketplace is an easy side hustle anyone can start anytime!
It also goes without saying that if the COVID-19 pandemic taught us something, the future is fundamentally unpredictable.
No one can foresee if our business will be a roaring success or an unfortunate letdown. Neither the bank nor you can foretell that.
Thus, viability is not a determining factor in getting approved.
Alternatively, if you do not plan to have a business in the future, I recommend exploring personal travel credit cards.
Final Thoughts
I am a huge fan of lucrative credit card sign-up bonuses, so I try to take advantage of these offers whenever the opportunity arises.
Having a side hustle or a business does not only multiply your earning potential, it also exponentially increases the variety of cards you can apply for, consequently propelling you closer to your next dream vacation.
With that said, a gentle reminder to only apply for credit cards that you can comfortably pay once your statement comes around.
Paying those hefty credit card fees is antithetical to the frugality principles I espouse in this blog.
I hope the actionable tips outlined in this post can pave the way for you to acquire your first-ever business credit card. Feel free to reach out anytime for questions!
Good luck!
EDITORIAL DISCLOSURE – Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, hotel, airline, or other entity. The content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.
