Getting your First Business Credit Card

A few weeks ago I applied for the Chase Ink Cash Business Credit Card and after waiting a few days I called Chase (888-338-2586) to check the application status. I was happy to hear it was approved. Now I am on my way to earning 50,000 Chase Ultimate Reward Points which can be transferred to many airlines or hotels since I have the Chase Sapphire Reserve card.

The card earns 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable and phone services each account anniversary year. It also earns 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year and 1% back on everything else. There is no annual fee.

As you may already know, many banks including Chase will reject your application for a new card if you have already applied for and received 5 cards (including authorized users) in the last 24 months. This is referred to as the 5/24 rule. The great thing about a business Credit card is it does not count toward this number. You still have to be under 5 when you apply for the first one, but once you have a business credit line it is separate from your personal credit.

Do you Qualify?

Many people do not think they would qualify for a business credit card, but the truth is anyone who does a little on the side does. That means if you sell things online, mow lawns, etc. you technically have a business. That does not mean you will be automatically approved for a business credit card, but if you have decent credit you probably will be.

Applying

When you apply for your first Business credit card, just be honest on the application about how much your business makes, expects to make, or if you have not made any money just put that. Businesses still have expenses even if they have not made a cent and banks know this. I would err on the side of underestimating your business income in case they want you to prove it. Under the description choose the category that best fits your business. If you have a sole proprietorship you will put your name for the name of the business and use your SSN instead of a EIN. If the card issuer suspects you are not being honest or if you are applying for a harder to get card like the Chase Ink Preferred Card they may ask for more information. This happened to a friend of mine and also to me when I applied for the Alaska Airlines Visa Business Card. Bank of America asked for proof of a registered business and also a copy of my taxes. Since I have a sole proprietorship I was not able to provide an EIN and gave up. With Chase it may have helped that I have a checking account with them and several cards, so I had no trouble.

Summary

If you are feeling unsure about applying for a business card be assured there is no reason you won't be approved for one as long as you are honest and have reasonable credit. The main benefit is that once you have a Business Credit line you will be able to get more credit card bonuses without going above your personal 5/24 rule. You can also get two of the same credit cards this way (personal and  business versions) and really rack up some bonus points.

Mike