Whether you’re new to freelancing or have been doing so for a decade, a big milestone for many gig workers is getting a business credit card for the first time. Freelance work has exploded in the past few years, in part due to the COVID-19 pandemic. Over 60 million Americans did some type of freelance work in 2023, according to work marketplace Upwork.
As a former freelancer myself — who made a whole 10 cents per word at the time — a business credit card could have helped me cover costs like a new laptop or even gas as I drove around the county for interviews.
If you freelance or have a side hustle, using a business credit card could help with costs and help you to earn rewards for all that hard work.
[Read: Best Business Credit Cards.]
When to Get a Business Credit Card
If you freelance, have a side hustle or essentially receive any kind of self-employment income, you can qualify for a business credit card without owning a business. This is because you are technically considered a sole proprietor if you earn money independently. Your only requirements are a good credit score — usually 670 or higher — and a few pieces of key information. Here’s how to know if you should get a business credit card for your freelancing gig.
You Have High Startup Costs
If you’re just starting out and realize your specific gig will require some investment on your part, you can use a business credit card for that. As long as you know you’ll be able to make monthly payments with ease, you can lean on a new credit card to alleviate cash flow problems. Especially if you apply for a business credit card with a promising sign-up bonus.
For example, the Chase Ink Business Unlimited® Credit Card offers a $750 cash back introductory bonus after new cardholders spend $6,000 in the first three months of opening their account. Or if points are more your thing, The Blue Business® Plus Credit Card from American Express features a welcome offer of 15,000 Membership Rewards points after new cardholders spend $3,000 in the first three months with the card. (See Rates & Fees)
The best business credit cards will offer rewards, but just make sure to keep an eye on the annual percentage rate. While earning rewards for purchases you were going to make anyway is a good idea, paying unnecessary interest is a bad one.
When considering a business credit card specifically for high startup costs, choosing one with a 0% intro APR period is going to be your best bet. (What a coincidence, the two cards I listed above have an intro APR of 0% for 12 months.)
[Read: Best 0% APR Credit Cards.]
You Want to Separate Expenses
Separating business expenses from personal ones can make budgeting so much easier. As I mentioned above, when I was a freelance writer, I had to drive from city to city to interview sources for my pieces. Figuring out afterward which time I gassed up was for work or leisure was a headache I inflicted upon myself. Having a business credit card could have helped me sort my expenses, submit invoices more efficiently and definitely helped around tax time.
Once you separate these purchases, it’ll be easy to see just how much goes toward your business that you may have otherwise overlooked. As a writer, for example, it’s more than just a laptop; it’s subscriptions to websites like Help A Reporter Out, or HARO, furniture like a desk or a desk chair, and even small purchases like those fancy pens you just know will help with note-taking.
You’re Ready to Scale Up
When what may have started as a side hustle becomes a main source of income, growing operating costs can come with a growing gig. For example, maybe you started off renting out your guest house on Airbnb every once in a while, but now you’re ready to renovate and turn it into an oasis for vacationers. That will mean lumber costs, labor, the appropriate insurance and more. Consider using a business credit card to handle your extra costs as you scale up.
You’re Traveling More
Are you traveling city to city meeting clients? Then using a business credit card to earn rewards at the pump is your next move. Whether points or cash back, there are several to choose from. For example, the Bank of America® Business Advantage Customized Cash Rewards Credit Card earns 3% cash back on purchases made at gas stations and EV charging stations.
Or maybe you need to fly as part of your freelancing gig. In that case, there are plenty of business credit cards that offer rewards in the form of points, airline miles or hotel points.
Best Business Credit Cards for Freelancers
The type of business credit card that’s best for you depends on your business needs. With that being said, these are some of the best business cards for freelancers.
Best for Business Travel
— Chase Ink Business Preferred® Credit Card. New cardholders can earn 120,000 bonus points after they spend $8,000 on purchases in the first three months of opening their account. Cardholders can earn three points per $1 on the first $150,000 spent in travel and select business categories. And when using points to book travel through the Chase Travel portal, cardholders will earn 25% more value than cash back. The card has an annual fee of $95.
— Bank of America® Business Advantage Travel Rewards World Mastercard®. This card has no annual fee and offers a 30,000-point intro offer after cardholders spend $3,000 in purchases in the first 90 days of opening their account. The card earns 1.5 points per $1 spent, and there’s no limit to how many points you can earn. Cardholders can also earn 25% to 75% more points if they have a business checking account with Bank of America and are enrolled in Preferred Rewards for Business.
Best for Cash Back
— The American Express Blue Business Cash™ Card. With no annual fee, the card offers new members a $250 credit after they spend $3,000 in the first three months. The AmEx Blue Business Cash Card earns 2% cash back on all eligible purchases on up to $50,000 per calendar year, then 1% thereafter. (See Rates and Fees)
— U.S. Bank Triple Cash Rewards Visa® Business Card. With another cash back card with no annual fee, cardholders earn 3% cash back on eligible purchases at gas stations, office supply stores, cellphone service providers and restaurants. Freelancers will be happy to know they can also receive a $100 credit for recurring software subscriptions like QuickBooks.
Best for Fair Credit
— Capital One® Spark® 1% Classic. One of the few business credit cards available to those with fair credit, the Capital One Spark Classic for Business has no annual fee but comes with a high variable APR of 29.99%. Cardholders earn unlimited 1% cash back on all purchases.
Final Thoughts
It’s never really a bad time to get a business credit card when you’re a freelancer. However, picking the right one for your business needs is another story. Whichever one you choose, though, will be a valuable tool in your freelancing career.
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When to Get a Business Credit Card as a Freelancer originally appeared on usnews.com
