Kate's on a Plane

Pop Quiz

1. You must have a registered business in order to qualify for business credit cards.
   1. True
   2. False
2. Your business must have at least $5,000 in annual revenue in order to qualify for business credit cards.
   1. True
   2. False
3. You must provide evidence that all expenses charged on a business credit card are business expenses.
   1. True
   2. False

Why Should You Care about Business Cards?

Business credit cards are key to supercharging your points and miles earning. Some of the most rewarding cards are business cards; sign-up bonuses for some of the most popular business cards have reached 100,000, 200,000, and even 250,000 points in recent months. 

Additionally, business credit cards do not report to your personal credit. You should always use credit responsibly and pay off all of your credit cards, in full, every month, whether they are personal cards or business cards. But, when lenders look at your credit report, they are generally more willing to extend credit to you if they don’t see that you already have many open accounts and a large amount of available credit. 

This is particularly salient to Chase’s 5/24 rule. In short, Chase will not approve you for any new cards, personal or business, if you have five or more accounts opened within the last 24 months listed on your credit report. Opening business cards allows you to keep earning welcome bonuses without going over the five-account limit, because these business credit card accounts will not appear on your personal credit report (with few exceptions, notably some Capital One business cards). 

Business cards are also essential to fast-tracking to the Southwest Companion Pass, one of the best deals in award travel. 

Nonetheless, many folks who are new to award travel have some misconceptions and/or hesitations about business cards, so let’s walk through the most common ones. 

Myth #1: You must have a registered business in order to qualify for business credit cards.

FALSE. You can apply and be approved for business credit cards as a sole proprietor, without any official documentation at all. To have a “business,” in this context, you simply must be engaged in activity with the intent to generate revenue. In fact, I’m willing to bet that you already have a business and just don’t realize it!

Here are some of the things that my friends and family do that could qualify as a business:

• Dog walking
• House/pet/babysitting
• DJing
• Writing poetry
• Teaching piano lessons
• Selling homemade baked goods
• Selling textiles on Etsy
• Selling jewelry at craft fairs
• Running an AirBnB
• Renting out a rental property or vacation home
• Selling used baby gear on Facebook Marketplace
• Selling clothes and accessories on Poshmark
• Driving for Uber
• DoorDash deliveries
• Consulting
• Freelance photography

I own a rental property, so for me, it was easy to see that I did, in fact, qualify. My first points and miles card was actually a business card! Since then, I have also opened business cards for a second business: selling second-hand swimwear on Facebook. The first one felt more like a “real” business, but in the eyes of the banks, both are legitimate.

Myth #2: Your business must have at least $5,000 in Yearly Profit in order to qualify for business credit cards.

FALSE. There is no minimum revenue threshold to qualify for business cards. Many small businesses are just that–small!

Even businesses that eventually become large businesses have to start somewhere, and many new businesses aren’t even profitable in the early months (or years). On the credit card application, be honest and realistic about how much revenue you expect your business to generate in the coming year. Some people are approved with a projected annual business revenue of only $500. The bank will also inquire about your household income, so the approval decision will not hinge on your business revenue alone.

Myth #3: You must provide evidence that all expenses charged on a business credit card are business expenses.

FALSE. The bank will not monitor or ask you to justify your business credit card transactions. Banks have no way to know what could and could not be a business expense for your particular business. Though you may want to keep good records about this for your own tax purposes, the banks won’t ask and don’t care. 

When you apply for a business credit card, you will be asked to check a box indicating that you agree to use the card only for business purposes. My understanding is that this provides legal coverage for the bank, because the consumer protections that apply to consumer credit cards do not apply to business cards.

Most people in the points and miles hobby will use whichever credit card is most advantageous for a given transaction, regardless of whether it’s personal or business. 

Tips for Applying for Business Credit Cards

1. Business name: If you have not filed paperwork to legally incorporate your business, then you have a sole proprietorship. If you are applying as a sole proprietor, the ONLY thing that you should put down as your business name is your name. You should fill in this field with your name exactly as you have written it elsewhere on the application. Do not make up a business name, or add anything to your name.
2. Business revenue: This is the amount of revenue you expect to generate, not profit.
3. Household income: This is the total amount of income for your household, not just for your business. This should be the same number that you would list on a personal credit card application.

If you’re just getting started with business card, the Chase Ink cards are a great place to start, because they have achievable minimum spends and good welcome offers. Here’s a quick rundown of these cards

• Chase Ink Business Preferred: Generous welcome bonus, high(er) minimum spend, unlocks points transfer to travel partners
• Chase Ink Business Cash: No annual fee, earns 5 points per dollar at office supply stores
• Chase Ink Unlimited: No annual fee, earns 1.5 points per dollar on everything
• Chase Ink Business Premier: DANGER, WILL ROBINSON! ABORT, ABORT! This card is often mistaken for the Ink Business Preferred, but it earns cash back rather than transferrable points. Don’t be fooled!