Can you open a business credit card without a business?

There are benefits to applying for a business credit card, but can you get approved for one without owning a business?  (iStock)

Many credit card issuers offer two different kinds of credit cards: Business cards and personal cards.

While most people assume they can only qualify for a personal card, this isn't necessarily the case. In fact, many card issuers are pretty lenient on who can qualify for a business credit card. This is good news, as there can be big benefits to signing up for one even if you aren't a CEO.

What can you use business cards for?

A business card is simply a credit card designed for a business, rather than an individual. Most card issuers that offer consumer credit cards also offer business cards.

And like personal cards, you can find business cards that provide travel rewards, cashback or other rewards or points programs. The difference is, your card will likely offer business-specific perks and is designed for the needs of a company rather than an individual.

There are a few key reasons a business credit card may be one of the best credit cards for your situation:

  • The card likely won't show up on your personal credit report: Most card issuers don't report a business card on your personal credit history, or report only if you fall behind on payments. This is good news if you need to use a high percentage of your available credit. Normally, this would hurt your credit score as credit utilization ratio is an important factor -- but charging a lot on your business card shouldn't affect your personal utilization rate.
  • Business cards may have higher credit limits. If you need to make large purchases on your credit card, a business card may provide more leeway.
  • Business cards allow you to get around limits on the number of cards you can have. Some card issuers won't approve you for a credit card if you have too many others open. For example, Chase Bank typically won't let you get a new card if you've opened more than five cards from any card issuer over the past 24 months. A business card won't count as one of those five, unless it's from one of the small minority of issuers that report business accounts on your personal credit history.
  • Business cards may offer better rewards. While rewards programs often focus their bonus rewards on common types of business spending, such as advertising, shipping, or Internet services, some cards come with much more generous rewards programs than personal cards.
  • Business cards may offer generous sign-up bonuses: You could receive lots of points, miles, or cash back for signing up for a card and meeting spending requirements.
  • You can build a credit score for your company: If you want your business to establish credit so it can qualify for financing without you cosigning, a business credit card could help you build up a credit history with the business credit reporting agencies. 
  • You can keep your spending separate: Business expenses are often tax-deductible. With a business card separate from your personal card, it's easy to keep track of what you spend on professional expenses.
  • You may be able to get free employee cards: Most businesses give you cards at no cost if you have staff working for you.

Can you qualify for a business card if you aren't a business owner?

If a business card is on your list of top credit cards, you're probably wondering if you actually need to be a business owner to qualify for one.

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The good news is, you can usually get these types of cards if you have earned income from any source other than an employer -- even if you don't think your income-producing activity qualifies as a traditional business.

For example, you could likely qualify if:

  • You sell items at a garage sale, flea market, or on eBay or Facebook Marketplace
  • You make and sell crafts online (like on Etsy) or at a local craft fair
  • You drive for a ride-sharing company
  • You babysit, house-sit or walk dogs
  • You work as an independent contractor and get 1099 income

Your business does not have to have a separate legal identity, such as being organized as a corporation or limited liability company. If you're a sole proprietor, you can apply in your own name and using your own personal information.

How to apply for a business card

Most card issuers allow you to apply online. You'll need to provide business contact details, which can be your home address. You'll also need to specify how long your business has operated, what your position is in the company, and what your business revenue is.

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It's important you provide honest answers to these questions as some credit issuers will ask for supporting documentation. But don't worry if you don't have a lot of revenue or your business hasn't been open for long as card issuers are still often willing to approve you. And if you do get denied, you can also contact the card issuer's reconsideration line to explain why your business would benefit from the card.

Is a business card right for you?

There are plenty of great credit cards out there, both for businesses and for consumers. While a business card may be ideal for you if you want a higher credit limit or a card that doesn't show up on your credit history, a personal card may offer better rewards if you primarily spend on personal purchases a company wouldn't make -- such as groceries.

Always compare which card offers the best rewards for your situation and think about factors such as the card's interest rate and pre-approval process. By researching all your options, you can find the perfect card that best meets your needs.