Why You Should Consider a Business Credit Card, Even If You Don’t Own a Business

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Banks offer credit cards for consumers and they market others for “business.” What’s the difference? Not much. But there are situations where business cards offer superior value to their consumer counterparts with very few drawbacks.

The difference between consumer and business credit cards

There was a time when there was virtually no difference between consumer and business credit cards. But since the enactment of the CARD Act of 2009, consumer credit cards are covered by new protections, primarily affecting things like late and over-limit fees, as well as how interest rates are charged on balances. Business cards were exempt from many of these protections.

If you carry a balance, you shouldn’t be looking for a reward credit card, business or otherwise: You should find one with the lowest interest rate. But if you pay off your balance each month, and are looking for the best rewards, you might find them with a business card.

Business cards offering better rewards

The Ink Plus Business Card from Chase offers 5 points per dollar spent at office supply stores and on telephone, television, and Internet service. You can’t get this deal from any of their consumer credit cards.

The American Express SimplyCash business card also offers 5 percent cash back on purchases from office supply stores and telephone services, and 3 percent cash back at gas stations, better than most gasoline cards. It has no annual fee.

Can I get a business card if I don’t have a business?

Yes. These cards are great for employees who travel on company business. They also make sense for anyone who has some form of home-based income. This could be selling things on eBay, freelancing, even babysitting. And once you have the card, you’re free to use it for non-business purchases.

Do I need an Employer Identification Number (EIN) to apply?

When you fill out an application for a business credit card, it asks you to provide an Employer Identification Number, or EIN, the business equivalent of a Social Security number. If you don’t have an EIN, however, as a sole proprietor, you’re allowed to use your Social Security number instead. This isn’t dishonest, it’s what sole proprietors are supposed to do. In fact, many applications explain that customers should provide their Social Security number if they do not have an EIN.

Bottom line? If you pay off your balance every month, the best card is the one with the biggest rewards. If that’s what you’re looking for, there’s no reason to exclude business cards from your search.

Note: While we attempt to be completely objective when reporting on credit cards, this site may be compensated by issuers when a reader applies for a credit card through the links within credit card stories or on our credit card search page.

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