In the last few years I’ve learned a TON about the credit card industry, and specifically the benefits of personal credit card rewards. Now, after getting a feel for the types of offers available, I find myself wondering if business cards may be “the next big thing.” But I can’t tell if this is just my own experience (my wife and I are each new to sole proprietorships), or an actual trend.
I’m inclined to think it’s a real trend, given the growing role of freelance work in today’s economy. Either way, I’m starting to pay much more attention to business cards, and in this article I’ll explain why. If you want, you can jump to the top two cards we recommend at the bottom of the article.
One shocking discovery I’ve made is that business credit cards don’t require you to have a large business. In fact, you might not even think you have a business that qualifies even if you actually do. In reality, most “side gigs,” would qualify as an eligible business you could use to apply for business card(s).
Example businesses: If you’re a sole proprietor or independent contractor, you can probably get a business card with little issue. This would include businesses like photography, graphic design, blogging, coaching/tutoring, manual labor (car repair, handyman services, etc.), and any such freelance work. Basically, if you make income outside of a formal employer that issues you a W-2, you’ll probably be fine.
Reporting Income: One speed bump you might hit is that your business has a small income (this is true for new businesses or those which are “on the side”). In that case, it’s recommended that you include your personal income on the application.
Using SSN: If you’re a sole proprietor, you’ll use your SSN when you apply. You DO NOT need an EIN.
Eligible Expenses: One other great perk is that you can put any type of spending on the card(s). The creditors aren’t going to only allow explicitly business-related transactions, which means these cards have even more flexibility and value.
Unique Category Bonuses
One of the best things about business cards is that they unlock some perks that wouldn’t otherwise be available to you.
Several cards will allow you to earn between 3 and 5 percent cashback on purchases that may be critical and common to your business. This includes things like internet, cell phones, cable, cloud storage, digital advertising, travel expenses, and purchases from office supply stores. Considering that these purchases are probably already tax deductible, the stacked savings can have a big impact!
Generous Signup Bonuses
Similarly, these cards have uniquely enticing sign up bonuses.
You’ll find that business travel cards offer bonuses as good, or sometimes better, than the personal card counterparts. This is useful when you need to get a TON of particular points. You can get both the personal and business versions of a card to essentially double the bonus.
Many of these cards have HUGE cashback bonuses as well. The Capital One® Spark® Cash for Business makes it pretty easy to earn $590+ right out of the gate from the bonus and spending requirement. Others also have big bonuses. Some require significant spend, but may still be worth it in the right context.
Emphasis on Cash instead of Travel
Personally, cash is worth more to me than miles since I don’t travel much. That’s one reason I’m intrigued by these cards, because they open up some new cashback possibilities. But as I mentioned above, there are also plenty of travel deals available with these cards–so you’ll be able to find offers that suit your preference.
Obvious Business Benefits
Whenever I read accounting advice for small businesses I see this sage advice repeated time and time again: “Keep your personal and business records separate.”
Having a dedicated business card, or multiple, is a great way to simplify your record-keeping. Of course, if you do put personal expenses on the card, that’s also fine as you can sort it out later. But this potential simplification is a nice benefit, and would make your business’ bookkeeping easier.
There are other explicit “business” benefits too, such as the fact that most accounts offer free additional cards for employees.
Thee Cards to Get Started
Ok, I’ve highlighted the main reasons why business cards are worth adding to your portfolio. Now, here are two great cards to get you started.
Chase Ink Business Cash — Worth $530+
For a long time the Chase Ink cards have been some of the best and most popular business cards in the industry. And for good reason! Normally, the hype is around the Ink Business Preferred, which is a fantastic card. Its bonus is usually 80,000 points when you spend $5,000 in the first three months, and it carries an annual fee of $95. But right now the free version of the card is giving us a reason to get very excited. It’s offering a bonus of 50,000 points when you spend $3,000 in the first three months. And there is no annual fee!
You would be hard pressed to find another credit card (personal or business) with such a generous offer on a card with no annual fee AND such a low spending requirement. Not only that, but the category bonuses on this card are lucrative for most small businesses (earn 5% at office supply stores and on Internet, cable, and phone services, for example).
Just looking at cash value, this bonus is worth at least $530 (50,000 points + 3,000 points that you earn meeting minimum spend). But of course, Chase Ultimate Rewards can significantly exceed this cash value when transferred to partners. Don’t be confused by the label of a “cash back” card. That’s only one redemption option, and you will still be awarded Ultimate Rewards.
We aren’t sure how long this deal will last, but right now it looks tough to beat!
Click here to learn more and compare the card.
Capital One® Spark® Cash for Business
Details: Earn a $500 cash “early spend bonus” after spending $4,500 in the first 3 months. 2% cash back on all purchases so that means the base $500 bonus plus the $90 for the minimum spend ($4,500 x 2% = $100) will get you at least $590 cash back!
There is a $95 annual fee, but it is waived the first year the account is open.
Why we love it: This is simply one of the best cashback deals in all of credit card rewards. This is absolutely one of our favorite cards, which we recommend almost every time someone asks us for “ways to get more cash back.” You can’t go wrong with this one, and it packs a punch with long-term value.
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