This afternoon, I was asked why I applied for business card for personal use. I think most of you may be not aware that using business credit card will bring some benefits for you. I believe we have good reasons to apply for business cards for personal use.
1. Many business credit cards offer fabulous deals. Some of those deals are much better than those of consumer credit cards. For example, The Gold Card from American Express OPEN ran a promotion in summer 2007 to give out 25,000 bonus points for new applicants, which can be redeemed for either free round-trip domestic tickets or a $250 gift card. A lot of people don’t know that they don’t need to run a business to qualify for a business credit card. Anyone can apply for business credit cards even if they are not part of a corporation or LLC. Just use your own name as the business name and use your Social Security Number (SSN) as the Tax ID to apply for business credit cards.
2. Business cards are hidden from your personal credit report. Business cards will not appear on your credit report. Therefore, your credit utilization is lower (The balance on the business cards will not appear on you credit report.) You can maintain a high credit score. In this way, you can still be able to get some great deals.
3. Business cards are generally giving out high credit limit. They are supposed to be used for business purposes.And business cards have great 0% APR offers. (This will give you more extra money.)
4. Business credit often is not included in the maximum exposure level a credit card issuer will give you. If you can’t get more credits from you personal cards, you may want to try business cards.
5. Business card issuers care less about card utilization but more about the timeliness of payment. It seems that the business credit is viewed in a different manner than is personal credit. It’s often assumed that the usage of your credit card is for you business.
Why an individual can apply for business credit cards? Because an individual can be a business too. The type of the business is called a sole proprietorship, which is the simplest business entity. Sole proprietorship is completely legit and is recognized by the Internal Revenue Services (IRS). In a sole proprietorship, your name is your business name and your SSN is your business Tax ID. For example, you can be a sole proprietor if you are doing some temporary contract work for a company, or if you are just selling items through online sites like eBay or through garage sales. (When the credit card companies ask what kind of business you are doing, this is a good excuse.)
Here are some recommendations:
Citi Business Card with ThankYou Network (10,000 ThankYou Points—check out this post. Easy to get.)
Starwood Preferred Guest Business Card from American Express (10,000 star points—up to 6 free nights stay at starwood hotels!)
Other business card don’t give you sign-up bonus but great rewards.
American Express Simply Cash Business Card (see this post)
Discover Business Card (5% cash back on office supplies, 0% APR on purchase and balance transfer. Easy to get.)
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January 26th, 2008 at 10:50 am
Citi business and citi professional, similar rewards and benefit, which one is easier and safer to get, if the person has limited credit history and fair score?
January 26th, 2008 at 11:25 am
Hi Liaosea. I would say Citi Business is much easier to get compared to Citi Professional. But it’s highly YMMV.
September 22nd, 2008 at 9:20 am
About a year ago I applied for a line of credit from a local coop for agricultural purposes. This line of credit does not show up on my credit report. Although there was an inquiry on my personal credit report.I am curious if this line of credit is reported anywhere else or if it is kept inhouse by the coop.
Also I find it difficult to believe business credit card from any of the major credit card companies is not reported somewhere. Anyone with expierence with business cred cards care to comment ?
Ken
September 22nd, 2008 at 9:59 am
Hi Ken,
It’s normal not to see your business line of credit on your personal credit report.Your business line of credit should appear on your business credit report.The reason why there is a hard inquiry on your personal credit report is the coop didn’t have enough information about your business credit report. So they refer to your personal credit report.