If a traditional credit card isn't the right fit, business lines of credit and charge cards offer effective alternative funding.
March 22, 2026
You may have opened a separate checking account to receive business income and pay business bills. But have you thought about opening a business credit card?
We’ll walk you through how business credit cards for sole proprietors work – including how to choose the best credit card and apply for an account. That way, you can spend less time thinking about your finances and more time serving your customers (and getting paid!).
Many solopreneurs and freelancers get credit cards. Here are the main reasons why:
Having different credit cards for business and personal spending is good for tax purposes. You can easily identify and deduct business expenses on your tax return, which helps you keep more of your hard-earned income.
Using a business credit card could help you build business credit (more on this later). Having a solid business credit score may help you secure other business financing in the future.
Covering business expenses with a business credit card can help you earn cash back, points, or airline miles. Why not get rewarded for purchases you were going to make anyway?
Getting a business credit card with a 0% promotional annual percentage rate (APR) can help you finance a large purchase, the same as cash (assuming you pay the balance off before the promotional period ends).
Reviewing your monthly and annual business credit card statements will show you where your money is going so you can adjust your spending as needed.
[Business] credit cards offer a great way to slow down your payables, too. For example, you pay a bill on your credit card, but the credit card payment date isn’t for several more weeks. This gives you a ‘float that can be used to your advantage.
Some people (maybe even you!) are under the false impression that a sole proprietorship isn’t a “real” business. These days, many banks recognize solopreneurs as business owners and are happy to issue them business credit cards (as long as they’re eligible otherwise).
You generally don’t need to formally register your business or obtain an Employer Identification Number (EIN) to qualify for an account. Many business credit card issuers let you use your Social Security Number (SSN) to apply.
There are several different types of business credit cards. Here are a few that may be a good fit for your work:
Cash back: Get a percentage of each eligible purchase put back in your pocket as a statement credit, gift card, or bank deposit. (Redemption methods vary by card.)
Intro APR: Spread a large purchase over several months without paying interest. (After the promotional period ends, you will have to pay interest when you carry a balance.)
Travel rewards: Enjoy perks like free checked bags and airport lounge access, and earn airline miles with qualifying purchases. (Benefits and rewards vary by card.)
The best type of card depends on the benefits you need.
“I like travel rewards because our businesses can have pretty significant expenses. That spending adds up and can result in free flights, hotels, etc. I've used credit cards in the past that have great introductory APR’s to help me even out cash flow and spread costs over the course of the introductory offer,” Guajardo continues.
There are many business credit card options on the market, which can feel overwhelming. To narrow down the field, ask other solopreneurs and freelancers about the cards they like. You can also read “best of” listicles and note which cards come up over and over again.
Once you have a manageable list of options, it is important to understand the different charges on a business credit card and compare your options based on these criteria:
Fees: Does the card charge an annual fee or a foreign transaction fee?
APR: How much will it cost to carry a balance?
Rewards program: How much will you earn in rewards, and do the most lucrative categories align with your spending?
Sign-up bonus: Can you earn a generous rewards bonus for hitting a reasonable spending target within so many months of opening your account?
Perks: Does the card offer useful benefits, and do the value of the rewards and perks offset the annual fee (if applicable)?
Credit limit: Is the potential credit limit sufficient for your needs? (You may not see initial credit limit information published publicly. The card issuer might tell you over the phone.)
“Consider who you currently bank and have credit cards with. Credit card companies often have incentives such as a shared rewards portal for personal and business credit cards that can make their business card a standout among others,” suggests Cole Williams, CFP® and founder of Vessel Financial Planning, LLC.
Follow these four simple steps to get the card you need in your wallet:
“As the sole business owner, your credit history as an individual impacts your odds for credit card approval. It's the only thing that issuers have to go on for determining your creditworthiness,” explains Williams.
Generally, you’ll need a score of 690 or better to qualify for a business credit card, but some cards are specifically designed for entrepreneurs with fair credit. If your score is under 630, you may need to start with a secured account to demonstrate financial responsibility and improve your credit profile.
Important note: In addition to having a satisfactory personal credit score, you may also need to meet business income and longevity requirements.
As a sole proprietor, you and your business are synonymous. There is zero legal distinction, which means you’re personally responsible for all business debt, liabilities, and taxes.
Here’s how that personal guarantee works in real life: You have to keep making payments on your credit card account even if your business income slows or you decide to stop doing business.
Every financial institution’s process will vary slightly, but you’ll likely need to have this information on hand to apply:
Your business name (likely just your name unless you set up a “doing business as” name)
Your title or role within your business (generally owner or freelancer)
Your business type (sole proprietorship)
Your business address and contact information (likely your home address and personal contact details)
Your SSN or EIN
Your annual revenue (can be $0 if you’re just starting)
Your personal annual income
Your estimated monthly business spending
The number of years you’ve been in business
The industry you operate in
If you have questions about the documents you need or the application process itself, call the card issuer.
Many business credit card applications are simple online forms that take only a few minutes to complete. You may receive an instant decision or have to wait several days to hear from the credit card company. You might be asked to submit additional information, so watch out for requests and respond promptly.
Pro Tip: Consider getting pre-approved for the business credit card you want to avoid unnecessary hard credit pulls (and score dings).
Getting a business credit card is often positioned as a way to build business credit. But business credit building isn’t that simple. Card issuers:
Don’t always report account activity to the business credit bureaus, so your responsible use may not help you establish business credit.
May not report positive payment history to the personal credit bureaus, so you may not see a personal score boost, no matter how well you manage your business account.
Tend to report account delinquency to the personal credit card bureaus due to the personal guarantee you made when you got the card.
If building business credit is one of your main reasons for getting a business credit card, find out how the issuer reports account activity before submitting an application.
Once you have a business credit card that reports to the business credit bureaus, follow this sage advice to establish and maintain a solid business credit profile. As credit card trends for this year shift toward more personalized, data-driven banking, a clean credit history will be your most valuable asset when accessing new fintech tools.
“Use the card for real business expenses, don't run the balance up like crazy, [and] pay it on time every month. Do that long enough, and lenders start seeing you as less risky. Honestly, there's no magic trick to it. If there was, I would be the first to jump on it!” says Dr. Steven Crane, accredited financial counselor (AFC®) and founder of Financial Legacy Builders.
Important note: You can also build business credit by establishing vendor tradelines with suppliers who report your payments to the business credit bureaus.
Small business credit cards offer many benefits, but they also have some potential pitfalls. Here are three of the biggest mistakes you can make as a solopreneur:
Spending to get rewards. “At the end of the day, it's still an expense (even if you get a deduction),” affirms Michelle R. Wagner, CFP® and founder of Wellful Money.
Overspending in general. “I've seen plenty of freelancers rack up balances thinking future income will fix it. That's a dangerous game to play,” warns Crane.
Mixing business and personal expenses. “If you're [paying for] groceries, bar tabs, and Netflix subscriptions on the same card as business expenses, you've defeated the whole point,” Crane points out.
You can keep yourself out of financial trouble by only using your business credit card for business expenses and keeping your credit utilization ratio low.
If you can’t qualify for a business credit card right now (or don’t want one), consider these alternatives:
A charge card. Since you have to pay it off every month, “their approval often is based on company revenue rather than personal history and guarantees,” Guajardo said.
A personal credit card. While not ideal for separating finances, “0% intro APR personal cards can be a smart short-term tool for a new sole proprietor who needs time to build business credit or for floating personal expenses as the business gets up and running,” said Cole.
A business line of credit. “Business lines of credit offer more flexibility than a card for large, infrequent expenses, but most require at least one year of business history,” Cole said.
The bottom line: “A credit card should support your business, not keep it alive. If your business only works because you keep putting expenses on credit, that's a warning sign. The real focus should always be building stable income, and a credit card is just a tool to help manage the process,” said Crane.
You may be able to deduct business credit card fees and interest related to business purchases on your annual income taxes. Ask your accountant or tax preparer for personalized guidance.
You may not need a business credit card if your business doesn’t incur a lot of expenses. You might also want to postpone opening an account if your revenue is too inconsistent to cover the monthly bill, you tend to overspend when using a credit card, or your credit score is too low to qualify for a decent card with minimal fees.
If you change your business structure after getting a business credit card, contact your card issuer. You may have to apply for a new account.
Laura has been a freelance writer since 2018. Her work primarily focuses on managing your money, navigating your career, and running a successful business. Her words have been featured in U.S. News & World Report, Fortune Recommends, The New York Post, USA Today, and many other publications.
