How (and Why) to Acquire a Business Credit Card for Your Side Hustle

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      Is a small business credit card the right choice for you and your side hustle? Whether you’re aiming to separate your business finances from personal ones, or you need a line of credit for startup expenses, this article has the information you need.

      Before applying, let’s explore:

      - How business credit cards operate

      - The advantages and disadvantages of acquiring a business credit card

      - The top small business cards to consider

      No Interest Business Credit Cards?

      Yes, they do exist. In fact, I have several in my wallet. What’s the trick to securing a 0% interest rate from banks? Simply pay your balance in full every month. Avoid spending beyond your means; credit cards should benefit your business, not lead you into a financial pit that takes years to escape. Most cards come with very high interest rates, so view them as a last resort funding strategy when launching your business.

      What If I Haven’t Made Money Yet? What If I’m Starting a New Business?

      Even if you’re beginning a new side hustle and haven’t generated any income yet, you can still qualify for a small business credit card. Banks recognize that many new businesses take time to produce revenue and are often willing to lend you funds to cover initial costs. You don’t need to be an established corporation or have savings on hand; you just need to be able to define what your business or side hustle entails.

      Freelancing, selling items on eBay, blogging, gig economy tasks, or tutoring can all qualify as business activities. Even hobbyists selling crafts at shows are eligible for small business credit cards. In essence, if you plan to profit and have good credit, you’ll likely qualify regardless of how long your business has been running.

      What Are the Requirements for a Business Credit Card?

      What else do you need to apply for a business credit card? If you’ve started or are about to start your side hustle, you’re already partway there.

      A typical application will request:

      - The name of your business, which doesn’t need to be officially registered; for example, as a freelancer, you might just use Nick Loper Enterprises.

      - The name you wish to appear on the card.

      - Your business location, often your home address, which remains private.

      - Your phone number.

      Following that, the application will generally ask for:

      - The estimated annual revenue of your business; it's fine if this is currently zero.

      - The legal structure of your business; if you haven't incorporated yet, choose “Sole Proprietorship” or “Self-Employed.”

      - Your Tax ID number. If unincorporated, your social security number serves as your Tax ID. If you've formally registered your business as an LLC or another entity, you might have an Employer Identification Number (EIN) to use as your Tax ID. (An EIN isn’t mandatory but can be obtained for free through IRS.gov, and can be needed for opening a business bank account.)

      The application might also inquire about:

      - Your line of business

      - The goods or services you provide

      - Your anticipated spending

      - The duration your business has been operating

      Make sure to answer the application honestly and accurately.

      Will I Qualify for a Small Business Credit Card as a Sole Proprietor?

      Absolutely! It may be less daunting than you think. As long as you intend to turn a profit and possess good credit, you should qualify, regardless of whether you’re a dog walker, babysitter, or delivery driver. However, you will need to provide your personal information during the application process, meaning timely payments are crucial for maintaining your personal credit score.

      When applying for a business credit card as a sole proprietor, your social security number will be required. (In my experience, applications on behalf of incorporated entities still require personal information.) This might be surprising if you were hoping to separate personal and business finances, but banks take on a risk with your application and need to verify your credit history.

      For non-residents without a social security number, you can apply for an Individual Taxpayer Identification Number (ITIN) through the IRS. However, keep in mind that not all banks accept an ITIN. Honestly, it's challenging to get approved for a small business card without a social security number unless you run a large corporation. While some banks may not require it, most do, leading others to explore different funding avenues such as crowdfunding, microloans, or investors.

      **Seven Advantages of Small Business Credit Cards**

      What are the main benefits of obtaining a dedicated business credit card for your side hustle?

      1. **Separation of Business and Personal Finances**