You will notice as we look at the various cards that there are many credit card bonuses available for their business cards as well. More often than not, the spending threshold is significantly higher than the consumer card, but you are able to get both a personal and business card with just about any credit card out there, so it can be beneficial.
For instance, the Chase Sapphire Preferred (that we recently looked at) gives 50,000 Ultimate Reward points after spending $3,000 in 3 months. With credit card bonuses, officially, you are only able to receive the bonuses as a first-time cardmember. But, a personal/consumer credit card and the business one are different products so you are able to receive one of each (with bonuses). So, you could apply for the Chase INK Business card (I do not receive a commission from this link) and receive an additional 50,000 Ultimate Reward points after spending $5,000 in 3 months. So, if you have a business, you can get another 50,000 points!
Another instance is with American Express and their Delta credit cards. They offer business and personal cards that have separate bonuses tied to them. You can apply for each one and still receive the bonuses as you are a first time cardmember with each product.
That is just one example of the cards that you can get if you have a business. Now, many people do apply for these cards, simply listing themselves as Sole Proprietors (in which case they just use their Social Security number for the Employee Identification Number). Some of those people have mentioned that there applications do get held up for further review and, in some cases, a call from the review department requesting information about the company, business finances, and such. I have a couple of businesses and have never had a problem with having my card held up for review based on the uncertainty if I am really a company.
Not only does having an actual business help in the application process, but if it is a business that you are trying to grow, it helps your business credit as well. When the initial inquiry goes through on the credit request, it is drawn off of your personal credit information. After the card is approved, the line of credit is applied towards the business (not your personal line of credit), so all actions you take with that card help build credit history with your business line of credit.
It is easier than ever to get setup as a legal business entity. Legal Zoom is one of the well-known organizations that helps the individual setup a company. The one that I have personally used in the formation of both organizations is Hubco (I do not receive a commission from this company) which offers business incorporating for $99 plus state filing fees. They are very quick with their processing and I have had no problem whatsoever with the paperwork they process for me. If you want to do it on your own, you can go to your local filing office to register a DBA and then apply for an EIN after that goes through (you do not have to have an EIN for a DBA, but it does help add some validity to your business when making credit applications).
Is it worth the cost of setting up an organization just to apply for credit cards? It maybe, especially if you plan on applying for multiple cards each year. It gives you those additional bonuses, which can have a very high value depending on how you use them. I probably wouldn’t start an organization just for that reason, but that might be the little push you need if you have something that you have thought about starting for a while but you never get the incentive to give you that final push!
*I am not a credit or financial advisor. These posts that I write are born out of my experiences over the years and do not constitute advice. If you have financial, credit, or tax questions, you should seek out a professional that can give you the answers that you need. Sorry to scare you, but I want to make sure that this information is taken in the spirit with which it is offered! 🙂