The 60,000 Ultimate Rewards point signup bonus offered last week for Chase’s Ink Plus and Ink Bold cards proves that some of the best credit card offers available are business credit cards. A good amount of benefits that are tailored towards business credit cards are just as good and sometimes better than a personal card. These include a massive signup bonus, business or travel related perks, and category spending bonuses.
Even though it is easy to get a business card, there seems to be a lot of questions and hesitation from people about applying for one. I recently covered the ‘how to’ part of applying and getting a business credit card, so I wanted to include some of the tops reasons why a business card might benefit you.
1. More big signup bonuses. Since many top business cards have equal or better signup bonuses than the personal credit card version, they open a door to many more lucrative bonuses. This can be especially useful for someone who has been in the miles and points game for awhile and applied for most of the current personal credit cards out there. Business cards are considered a different product from the personal version of the same card, so this opens up a whole new set of signup bonuses. Though applying for business card will put an inquiry on your credit report, the credit line and credit age will not be reported which is a plus. Some of the top business cards have huge signup bonuses such as the Ink Plus and Ink Bold 50,000 Ultimate Rewards points, the American Express Business Gold Rewards 25,000 Membership Rewards points, and the Southwest Business Card. The top business card offers are constantly changing so be sure to check out what the best offers are before you apply. Some business cards also have higher spending requirements so make sure that you read and can handle the terms and conditions.
2. You can get one without a business. A lot of people seem to shy away from business credit cards because they think they need a large incorporated business to apply for a card. The fact is that you don’t even need a registered business to apply and be approved for business cards. Many small businesses and startups start with one person as the sole proprietor and use the person’s name or make up a new business name as the company name. When applying as a sole proprietorship business you can just use your social security number when asked for EIN on the card application. A common example of this is if you have an Ebay business or other side business where you are the only employee and want to keep your business expenses separate from you personal day-to-day spendings. The point is that you don’t need a large business with an EIN number, in fact it doesn’t even have to be registered. Also, even though the credit card company not ever likely to ever look into your purchases you should plan on using your new business card for primarily business related expenses.
3. Business credit cards don’t show on your personal credit report. For someone who values their credit score and still wants to apply for credit cards, one of the most beneficial parts about applying for business credit cards is that the credit card will have a line of credit and history that will not show on your personal credit score. This also means that the credit line utilization and other factors revolving the credit line won’t affect your personal credit. Business cards generally come with higher credit limits and if you run a higher balance every month before you pay it off at the end of the month, this will not hurt your personal score. However, when applying for the card you will get a personal inquiry, meaning a 2-5 point ding on your personal credit score for up to 3 months. Since you are using your social security number on the application, the credit card company will still run your credit score to evaluate your creditworthiness for the business card. But be aware that just like any personal credit card, you will be responsible for any charges made to the business credit card and you will have to agree to this when applying.
4. Keeping your business expenses separate. Anyone who already has a business credit card knows that using it to keep your business expenses separate from you personal spending will simplify the book work when tax season rolls around. Whether you have your own business or are part of a much larger one, keeping your expenses separate will easier and less complicated for reimbursements or your own business’s bookkeeping. It can save you time and money when doing taxes when all you expenses are on one account and either you or your accountant doesn’t have to sift through both personal and business spending. When applying for a business credit card, it can help to mention to the bank that one of the main reasons you are applying for a business credit card is for the benefit of keeping your personal and business spending separate.
5. More bonus spending categories. Business cards are a great way to fill in the bonus spending category gaps that personal credit cards don’t offer. By using both your personal and business cards for specific bonus spending categories you maximize every dollar you spend. The Business Gold Rewards by American Express earns 3x points on airfare, 2x points on U.S. advertising in eligible media, gas purchases, shipping, and 1x points on all other purchases. With the Chase Ink Plus and Ink Bold you can earn 5x points per dollar spent on office supplies/cell phone/internet/landline/TV, 2x points per dollar on gas and hotels, and 1x point per dollar on all other spending. For each card the bonus spending categories are capped at $50,000 max per year.
6. More cards and more points. Most banks will limit the number of personal credit cards you can have based on your total credit line or the total number of cards they have issued to you. This not the case with business cards, you can generally have more or as many business cards so long as your credit score is healthy and high. Amex will only allow you to have four personal cards, but the number of business cards you can have is unlimited. If you have maxed out all the personal bonuses, this opens up the doors to many more signup bonuses. You can keep the miles and points rolling in by getting new business card offers and by maximizing the spending categories that are offered beyond your personal credit cards.
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