Who qualifies for a business credit card?

If you are trying to make a profit by selling goods or services, you have a business. It doesn’t matter if you’re pet sitting, working as a freelancer or running a retail store with several employees.

And since you qualify as a small-business owner, you are eligible for a business credit card.

How do business credit cards work?

Business credit cards can help small-business owners track expenses, manage day-to-day operations and separate their business and personal spending.

They are a form of revolving credit, which is ideal for new business owners who lack the capital to maintain proper inventory or cover seasonal or unexpected expenses. And most business credit cards can offer employee cards with individual spending limits.

Compared to personal credit cards, business credit cards usually offer higher credit limits and perks tailored to small businesses. For example, they enable small-business owners to build business credit while taking advantage of increased travel and other rewards which they can use to offset business expenses.

Related: 9 reasons to get a business credit card

Who can apply for a business credit card?

Whether you operate a sole proprietorship, partnership, corporation or a Limited Liability Company (LLC), you can apply for a business credit card. And you don’t need to have an existing business credit history before you can apply – credit card issuers will look at your personal credit history and credit score.

In case you’re still unsure as to whether you qualify for a business credit card, here’s a closer look at some common businesses that you might own as a self-employed person.

Related: How many business credit cards should you have?

Self-employed business owners

Being self-employed means that you work for yourself instead of working for an employer. You set your own hours and pay yourself from the profits of your business. Self-employed business owners may provide goods and services to the general public or to a specific client.

Jobs often performed by self-employed business owners can include:

• Online sellers
• Vacation rental hosts
• Home bakers
• Notary publics
• Farmers
• Bloggers
• Woodworkers
• Consultants
• Babysitters

Related: 10 considerations for your small-business credit card strategy

Freelancers and independent contractors

A freelance worker, or independent contractor, is also a self-employed business owner. You can still set your own hours and decide what projects you work on. But unlike other self-employed business owners, you are often hired on a contractual basis to perform a service or provide goods.

You give up some control over your work, as the person who hires you has some say over how their projects are completed.

Freelancers and independent contractors can include:

• Freelance writers and journalists
• Transcriptionists
• Tradespeople (builders, plumbers, electricians, etc.)
• Real estate agents
• Property managers
• Web developers
• Caterers

Related: 8 credit cards every freelancer should have in their wallet

Gig economy workers

Just like freelancers and independent contractors, gig workers are also self-employed. They also are hired on a contractual basis. What can set gig workers apart from other self-employed business owners is the shorter length of time they spend providing goods and services for clients.

Most gig workers focus on short-term work or even one-time projects before moving on to the next assignment. They’re also more likely to advertise their services on marketplace platforms or apps.

Gig economy workers can include:

• Ride-hailing service drivers
• Food-delivery drivers
• Landscapers
• Odd-job workers
• Personal trainers
• Website content writers
• Web designers
• Construction workers
• Accountants

Types of business credit cards for small-business owners

When choosing a credit card for your business, pay attention to your spending habits.

If you’re just starting a business or have minimal monthly expenses, a no-annual-fee business credit card is a good place to start. You can also find cash-back business cards that pay a flat rate on all your business-related expenses and cards that provide higher reward rates in select spending categories, such as gas, restaurants, office supplies and travel.

As your business grows and your monthly expenses increase, you might want to check out the enhanced features and benefits that come with more premium business cards. Keep in mind that they will likely charge an annual fee.

For example, some of the best American Express cards are geared toward businesses that spend thousands of dollars every month in general spending and travel. This includes the American Express® Business Gold Card and The Business Platinum Card® from American Express. You’ll pay a $375 annual fee for the Amex Business Gold Card (see rates and fees) or a $695 annual fee for the Amex Business Platinum Card (see rates and fees).

Many business credit cards provide impressive welcome offers, such as that of the Capital One Venture X Business. Cardholders can earn up to 300,000 Capital One miles once they spend $20,000 in the first three months and an additional 150,000 miles once they spend $100,000 in the first six months.

Although not all small businesses have such high expenditures, for those that do, it can be very rewarding. When used responsibly, all of these cards can provide numerous benefits that can justify the annual fee.

Read more about the Amex Business Gold and Amex Business Platinum cards:

Bottom line

As you can see, there are many advantages to having a business credit card. But remember always to pay your bill on time and keep your credit card debt to a minimum. The less you pay in interest charges and other fees, the more you will benefit.

For rates and fees of the Amex Business Platinum card, click here.
For rates and fees of the Amex Business Gold card, click here.