Card Q&A: Can I Apply for a Business Credit Card without Having a Business?

Posted by brady

November 2, 2008

The short answer is Yes, you can.

Many business credit cards offer fabulous deals. Some of those deals are much better than those of consumer credit cards. For example, American Express Business Gold Rewards Card ran a promotion in summer 2007 to give out 25,000 bonus points for new applicants, which can be redeemed for either free round-trip domestic tickets or a $250 gift card. But many people stop short of applying for business credit cards because they mistakenly believe that they need to run a business to qualify for a business credit card. This is not the case. Anyone can apply for business credit cards even if they are not part of a corporation or LLC. Just use your own name as the business name and use your Social Security Number (SSN) as the Tax ID to apply for business credit cards.

Why? Because an individual can be a business too. The type of the business is called a sole proprietorship, which is the simplest business entity. Sole proprietorship is completely legit and is recognized by the Internal Revenue Services (IRS). In a sole propiertorship, your name is your business name and your SSN is your business Tax ID. When you are filling out application for business credit cards, just choose sole proprietorship as business legal structure, and enter your SSN as business tax ID.

For the vast majority of business credit cards, even if you are part of a corporation or LLC, you will still be personally liable for business debts and credit card issuers use your own credit report to determine on your qualification. That’s why they’ll always ask for your SSN.

You also don’t need to worry about any filings with the IRS for using business credit cards. You can simply use your business credit cards for regular daily purchases and pay off the balances as you would do with a typical credit card.

In addition, for most business credit cards, the credit card itself won’t show up in your personal credit report. This means that you can open many new accounts, max out the credit limits without affecting your personal credit score. This also means you can save thousands of dollars by taking advantage of the 0% Balance Transfer offers from business credit cards without worrying about your credit score.

Now that you are able to get access to the fabulous deals, check out my articles that compare business credit cards.

Important Disclaimer: the credit cards information in this post were accurate as of the date of publishing, some or all of the card programs may be discontinued, their terms may be changed after wards.