How to apply for a business credit card for a sole proprietorship

Business credit cards often have really great bonuses and it is very common for points and miles collectors to get them. Personally, I never really thought twice about whether or not to apply for business credit cards because I always had some sort of entrepreneurial project going on – so it was a no-brainer to include business credit cards in my applications.

But my “businesses” definitely varied in terms of how seriously I took these projects, how much money they made me, or what type of business I had. Most of them were simply sole proprietorships. Chances are, you have a project of some kind that might fall under the “sole proprietorship” category too.

It’s been awhile since I’ve applied for a business credit card, so I found it really useful to refresh my memory and watch this video Greg made of how to apply for a business credit card as a sole proprietorship.

You can watch the How-To video here, but I’ll outline some of the notable details below as well. (You can click on each timestamp to navigate directly to a specific topic within YouTube).

Of course as you read this post, keep in mind that we’re not lawyers or tax professionals and we’re not trying to give you legal or tax advice. If you have questions about how people earn miles and points on credit cards, that’s the side of the equation we’re speaking towards.

First, Greg does a good job clarifying what “counts” as a business or sole proprietorship, when it comes to business credit cards.

00:51 – When it comes to getting a business credit card, you can define a business very loosely. Pretty much any personal project could be considered a business, especially if there’s a thought that your project may one day make money.

Using myself as an example, when I first started traveling I used to query different publications for travel articles. I only got a handful of things published and probably made less than $100 all-together, but I thought of this aspirational writing as a potential business. I also used a Craigslist/Skillshare type site called “Fiverr” to post a Skype art-teaching gig for something like $5/student per half hour. Again, I didn’t make a lot of money that way, but it was personal-project income and I thought of my online art teaching as a potential business as well. (Side note, this ended up being a super fun project and I met a lot of cool people doing this.) 

But my business didn’t really have a name, website, brand, trademark, LLC, or anything like that. It was just me and a smattering of projects I was working on in hopes of making money.

01:17 – A business that’s just a person and their own projects like this is called a sole proprietorship, and it does not require you to register any special paperwork or procure an EIN. It’s just you.

01:28 – Your sole proprietorship does not need to be making money yet in order for you to apply for a business card. 

Next, Greg gives a few tips for the business credit card application process.

03:17 – If you’re not sure what your title is for your sole proprietorship, you can simply go with “owner”.

03:42 – Again, if you haven’t filed any paperwork to establish a business and your business is just you and your personal projects, you’ll want to select “sole proprietorship” as your business type.

03:47 – You can use your own name as your sole proprietorship name.

04:05 – You can use your own SSN as the TAX ID for your sole proprietorship (assuming you haven’t officially filed for an EIN.)

04:21 – When the application asks you about employees, pay attention to whether or not they want you to include yourself. Some applications (like Chase’s) want to know how many employees you have “other than yourself”, and other applications want to know “including yourself”.

04:49 – It’s ok to list $0 as your expected income. And for expected expenses, you may consider including the spending you’ll do to meet the minimum spend requirement for the bonus.

But…what if it’s going to be hard to meet the minimum spend requirement for a credit card’s welcome bonus with just business expenses alone? In a recent Ask Us Anything, Live episode, we answered a question like this.

Do you have to reserve your business credit card for only business expenses?

Sometimes it’s hard to parse out which expenses relate to a project and which are strictly personal. How do you draw this line…and do you need to?

Using my personal examples again, when I was an aspiring travel writer, pretty much all of my travel expenses could be seen as related to my travel-writing projects. And as a graphic designer now, there are many devices or utilities (like my laptop, sketchbook, internet, etc) which I use for both personal projects and work projects. Now, I’m not talking about what the IRS might consider a business expense – I’m not qualified to speak on that and that’s a whole different question. But as the owner of your own sole proprietorship, which expenses you put on your business credit card is kind of up to you.

And at the end of the day, it is not uncommon for people in this hobby to simply use their business cards for any expenses that come up, including for personal expenses. In the video below, Tim helps give some context for how the miles and points community tends to look at business cards and how they’re used. 

Again, we’re not lawyers or tax professionals and we’re not talking about what you should do if you want to start a business that’s separate from you, or how you should calculate business expenses for your taxes. We’re just talking about how to approach applying for a business credit card as an individual.

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