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For many small business owners, a business credit card is a smart and effective way to manage business-related expenses. With the right card, you get many benefits beyond the convenience of extending your credit line. By using it responsibly, you can build a credit history for your business. You may also earn rewards, receive a free employee card, and access expense management software.
When you’re ready to apply for a business credit card, the process isn’t the same as applying for a personal credit card. In addition to some personal information, you will also be required to provide many business-related details. This includes how long it has been in business, annual business revenue, and number of employees.
You will also be asked to enter your business name. This can be used if you have your personal name or legal company name.
Not sure which one to use? Keep reading to learn more and help you decide what name to give your business credit card.
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Why you need a business card
There are many reasons to apply for a business credit card. The simplest reason is that you have an established business and are looking for ways to better manage your expenses.
without requirement For business cards, you may decide that they help you separate work expenses from personal expenses. You can also opt out of spending balances being reported on your personal credit report. This helps you maintain a higher credit score by keeping your credit usage low on your personal credit report.
Or maybe you want to get a nice sign-up bonus without affecting your personal eligibility for future credit card applications or circumventing restrictions like Chase’s 5/24 rule. .
What name should I apply for?
The specific answer to this question depends on the structure of your business. Banks will give you the opportunity to specify whether you are applying as a partnership, type of legal entity, or as a sole proprietorship, among other options. Some card issuers, such as Citi, offer an overwhelming number of options to choose from. Large corporations, or companies registered as corporations, LLCs, or partnerships, simply apply in the name of their business, making it easier for them to decide which name to use.
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For sole proprietorships, things get a little more complicated.
Related: Are you eligible for a corporate credit card?
If you are not 100% sure which business structure to choose, consult an attorney or tax professional. Many points enthusiasts apply as sole proprietors or self-employed for purposes such as:
- door dash driver
- Uber driver
- rover pet sitter
- freelance writer
- babysitter
Applying as a sole proprietorship is a great option because you don’t have to submit any paperwork to the state or federal government. You can establish a sole proprietorship simply by doing business. Use this hassle-free method to apply for a business credit card using your own name. Some banks (especially Chase) require proof of physical address before approving business card applications. I prefer to request supporting documents including: Using your name as a business name allows you to submit rent or utility bills that match the information you provided on your application.
However, branding is half the battle to attract customers, and you may not want to call your new consulting firm just your name. (DBA) should do business as a form. Specific regulations regarding this (who/where/when/what must be submitted) vary by state. Again, you should consult a legal professional before proceeding. This is a required step before opening a bank account or line of credit in your business name.
In many ways this is a warning about what not to do. Under no circumstances should you create a business name for your application without first completing the required paperwork.
Not only is it unreliable when your card issuer asks you to back up your business documents. It also means committing fraud by pretending to be a non-existent business. For most business owners looking to apply for business cards, the simple and concise answer is to simply use your name and keep things simple and legal.
RELATED: The Ultimate Guide to Credit Card Application Limits
Conclusion
A business credit card is a great way to enjoy even more signup bonuses, bonus spending categories, and other valuable perks. If you qualify for a business credit card, remember that these applications often face greater scrutiny than personal credit card applications. Always be ready to present your business registration certificate or other relevant documents if required. If in doubt, consult a legal professional, and if applying as a sole proprietorship, consider using your name as your business name.
Additional reporting by Robert Thorpe.
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