- Day 1 – What’s Travel Hacking all about?
- Day 2 – Getting Organized
- Day 3 – Types of Miles and Points
- Day 4 – Credit Card Strategy
- Day 5 – Southwest Companion Pass
In previous lessons, I mentioned a few different business credit cards (Chase Southwest Premier Business, Chase Ink Business, American Express Business Platinum, etc). You may be thinking to yourself that you are NOT a business owner and can’t apply for these.
It’s true, you must have a business to apply for business credit cards. But most people have businesses without realizing it. Having a business and being able to open up business credit cards can really accelerate your miles and points earnings.
As you saw in the ‘Credit Card Rules’ lecture, most business cards do NOT show up on your personal credit report and hence do not count towards your 5/24 status when applying for Chase credit cards. And as you saw in the last lecture, the easy way to obtain the Southwest Companion Pass is by applying for one Chase Southwest Business credit card and one of Chase’s Southwest Personal credit cards.
Sole Proprietorship
Do you sell items on Ebay or Etsy? If so, you have a business. How about having a rental property? Do you do consulting work or are a tutor? Do you babysit? How about mowing lawns or shoveling snow for extra money? All of these are considered businesses.
You don’t have to have a formal business setup with paperwork, LLC, corporation, etc. All of the above examples are considering being a Sole Proprietor. Sole Proprietorship is the simplest and most common structure chosen to start a business. It’s run by one individual and there is no distinction between the business and the owner.
How to Apply
As a sole proprietor, by default, the legal name of your business is your own name. So when applying for a business credit card just use your own name as the business name. And since there is no distinction between the business and you – you will just use your own social security number as the business Tax ID.
The credit card companies will pull your personal credit report. You will be approved or decline based upon your personal credit worthiness, not business credit history which may not exist yet if you are just starting up. So don’t worry that you will be declined because your business does not have a history. Credit card companies know small business usually have a lot of startup expenses and they want your business to use their card for these expenses.
Credit Reports
Another feature of some business credit cards is that they are NOT reported to personal credit bureaus. So while the credit card companies will pull your credit in order to approve or decline you, some companies will NOT report to the personal credit bureaus that a card was opened, payments were made, etc.
What does that mean for you? The business cards not reported will not show up on your credit report and not count against Chase’s 5/24 rule.
From Doctor of Credit
Types of business cards NOT reported:
- American Express
- Bank of America
- Chase
- Citi
- FNBO
- US Bank
- Wells Fargo
Types of business cards ARE reported:
- Barclaycard
- Capital One
- Discover
If you don’t already have a business, I would highly recommend creating one. The perks and bonuses you will earn from the credit cards are well worth it. Why not start your own blog – it’s very cheap to start up?
Need to Knows
- You must have a business to open a business credit card but you may have a business without knowing it (handyman services, rental house, babysitting, selling on ebay, etc)
- Sole Proprietorship is the simplest and most common business structure when starting out
- Some types of business credit cards are NOT reported on personal credit reports
