Who can apply
You don’t need a big company. Banks offer business cards to sole proprietors too: freelancers, consultants and people who sell online can apply under their own name with their Social Security number, without a separate tax ID. The application asks about the business, like its revenue and how long it’s been running. Answer honestly, even if the numbers are small.
You’re still responsible
Almost every small-business card comes with a personal guarantee: if the business can’t pay, you have to. The bank also checks your personal credit when you apply.
How they show on your credit
Most business cards don’t appear on your personal credit report, so their balances don’t count against your personal credit use, and they don’t add to Chase’s 5/24 count. Some banks do report business cards to personal credit, though, including most Capital One business cards. See the Chase 5/24 rule, explained.
Even when a business card normally stays off your report, the bank can report it there if the account falls seriously behind.
Fewer legal protections
The federal rules for consumer credit cards, like the limits on raising the rate on a balance you already have, don’t cover business cards. Many banks follow similar practices anyway, but they don’t have to.
Why people get one
- Keeping business spending apart from personal spending makes bookkeeping and taxes easier.
- Rewards are often built around business costs, like shipping, advertising, office supplies, and internet and phone bills.
- Extra cards for employees, with a spending limit on each.
Premium Finance (free) tracks business cards’ credits like any other card, and counts the ones that report to personal credit in your 5/24 total.