In the world of travel hacking, the name of the game is earning as many credit card points and miles as possible. Business credit cards play a pivotal role in this strategy by maximizing rewards and benefits. While personal credit cards offer a variety of perks, business cards can significantly amplify your ability to earn points and miles. This article delves into if you have a business (and I bet you do!) and how business cards are the key to mastering the points and miles game, providing you with strategies to optimize your rewards.
Understanding Business Credit Cards
Business credit cards are designed for small business owners, freelancers, and even side hustlers. The main reason these are hallowed grounds in the points and miles space is because of the incredible sign up bonuses that these offer. These cards often come with benefits tailored to business expenses, but they also provide opportunities to earn substantial rewards that can be redeemed for travel. Getting into the world of business cards can completely change the amount of points and miles you will expect to earn.
Do I Have a Business?
Even if you don’t think you have a business, you are still probably eligible for a business credit card. One of the biggest misconceptions is that you need a formal business entity to qualify for a business card. Many people overlook things that could be freelance gigs or side hustles.
Do you drive for Uber/Lyft, Do you walk/groom dogs on the side, Do you sell clothes or resell anything on Etsy or Facebook Marketplace, Do you do consulting on the side? Are you an aspirational travel blogger who writes about points and miles? (No, just me?) Any of these plus many other side projects can work to open a business card even if you do not have an official business or make any money doing so. I eventually hope to make money from the business of writing about credit card points and miles, but currently I do not and am still approved for business credit cards. You apply as a sole proprietor with your social security number and enter your business details. Here is a breakdown:
- Business Name = Your Full Legal Name
- Tax ID # = Your Social Security number
- Business Revenue = Your Annual Salary
- Time in Business = How Long You Have Had The Business
- Type of Business = Sole Proprietor
- Business Address = Your Home Address
- Business Industry = Best Fit To Your Business
- Role = Owner
Make sure to answer each question honestly.
Things to Remember with Business Credit Cards
1. Business Credit Cards Do Not Impact Your Personal Credit Report
One of the best things about business credit cards is when you apply, most banks will pull your personal credit but not report the account to the personal credit bureaus. Once approved, the spending activity and balances on your business card typically do not appear on your personal credit report unless you default on payments. This means you can leverage business credit cards to earn rewards and manage business expenses. It will not directly impacting your personal credit utilization ratio, thereby preserving your personal credit score. The only two that report to personal credit history is Discover and Capital One.
2. You Can Spend On Personal Items
Another common misconception is that you have to spend on business expenses. This is not true. The spend on this card is not reported anywhere. The IRS also will not have a report of what is spent. So, there should be no worry around reporting tax deductions or anything of the sort. Once you have the card, you can put your everyday spend on there to hit the minimum spend bonus.
3. Many Business Credit Cards Do Not Have an Annual Fee
4. Introductory APR Offers
This is an advanced strategy for some, but there are business cards that offer 0% APR introductory periods for purchases or balance transfers. This can be advantageous if you plan to make large purchases and pay them off over time. You should know down the road when you are going to pay off the balance. DO NOT LET THE INTEREST PAYMENT TO ROLL OVER. Especially because after that 0% period it will jump to around 25% APR that you want to avoid. Always pay your balances off in full and on time when interest is involved.
5. Combining Personal and Business Points
All bank issuers can combine your personal points with your business points earned to make it easy to have them in one pool of points. You will have to call or message the bank asking them to combine the accounts. This will also give you one screen to toggle between the two cards as well to see credit card balances.
Take a look at my Best Credit Cards Page
Conclusion
Business credit cards are a powerful tool in the points and miles game, offering higher rewards, significant sign-up bonuses, and category spending bonuses that can greatly enhance your travel rewards strategy. By understanding how to leverage these cards effectively and responsibly, you can unlock a world of travel opportunities and benefits, making the most out of every business expense. Whether you’re a freelancer, a side hustler, or a small business owner, incorporating business credit cards into your financial toolkit is a savvy move towards maximizing your rewards.
