Millennial Money: Business credit cards can be a tool for freelancers

Gregory Karp

Entrepreneurial types who freelance and side hustle their way through the week likely have access to a tool that could help them thrive: a business credit card.

If you drive a rideshare part time, regularly resell on eBay or book paid photography jobs on the side, you may qualify for a business credit card. You don’t need to have a storefront, employees or an LLC.

While a business credit card alone won’t determine whether your business prospers, small-business customers seem to like them. They are “significantly more satisfied” with their business credit cards than customers are with personal credit cards, according to a 2019 study by J.D. Power.

Among those is small-business owner Joe Brancatelli. He’s a publication consultant and founder of the business-travel subscription newsletter “Joe Sent Me.” He considers his business credit cards among the tools that help make his business go. “They help me segregate my personal and business spending, which is important for tax and other reasons,” he said.

Business credit cards can offer key advantages to gig workers.

The cards also help cash flow. “It’s relatively easy access to credit, which some business folks can’t get otherwise,” he said. “The same bank that might turn you down for a traditional business loan will give you a small-business credit card.”

Of course, the key is to use the card’s credit line strategically without paying interest, he said.

Qualifying as a business

You don’t need a business credit history to qualify for a business credit card. If you engage in an activity that earns money without being someone else’s employee, you’re a business.

Your business doesn’t even need to make a profit, and you can say so on the application. If you don’t have a separate tax ID for your business – many sole proprietors don’t – you can use your Social Security number.

You qualify for a small-business credit card based on your personal credit history. Credit scores of 690 or above generally qualify, although issuers have their own approval criteria, which can vary by type of card.


Business credit cards typically come with bigger sign-up bonuses than personal cards. The difference can mean hundreds of dollars in rewards value.

Rewards on business cards might fit your spending better, too. For example, business credit cards might offer extra cash back for spending on office supplies, advertising and telecommunications services. Those could be more useful than bonus categories on a personal card that might include groceries, streaming services or home-improvement stores.

Business cards typically come with a higher credit limit. And the fees can be tax-deductible when used for business spending only.

Among the biggest benefits is simply having a separate card for business spending. That can help with expense tracking, running financial reports and gathering tax-return information. Employee cards are typically free.


Although it’s a credit card for your business, you generally have to provide a personal guarantee. That means if your business goes belly up, you’re personally liable to pay – even if your business structure otherwise protects you from liability, as with a corporation or LLC. Think of it as you, personally, co-signing for the credit card.

And if you want to build creditworthiness through your business credit card, that might not happen. Not all business cards report to consumer credit bureaus.

Business cards aren’t covered by the same federal consumer protection laws as personal cards. But issuers generally voluntarily offer similar protections, such as limits on fees, interest calculations and disclosures.

And those big sign-up bonuses? They typically require more spending on the card before you can earn them.

How to choose

Picking a business credit card is similar to choosing a personal card: Find one that fits your needs and business spending patterns. If you plan to carry a monthly balance, a card with an interest-free period or low ongoing interest is more important than rewards.

If you’ll pay in full, rewards cards are a good choice. Business travel credit cards offer perks that road warriors would appreciate.