Six Benefits of Getting Business Credit Card for Your Side Hustle


A standard 9-5 job will enable you to gain some security and expertise. While becoming an expert in your field is important, having a side hustle often allows you to push yourself. You can use your time better by learning new things and exploring your full range of abilities.

Nothing compares to enjoying more than one source of income, and a side hustle is a means of earning additional money in any way you want. You can creatively turn your hobbies and skills into massive moneymakers with a side hustle.

In the event of a layoff, you will be in a much better position to look for new employment. Or even undertake the steps required to turn your side hustle into a full-time job.

What You’ll Need to Apply for a Business Credit Card

Most small business credit card applications do not require you to be a registered LLC or corporation. You could simply list yourself as the sole owner and use your Social Security number instead of a business tax identification number. You may be required to list the nature of your business and the date it was established.

However, bear in mind that your credit score has an impact on your chances of approval. Typically, small-business credit cards require a credit score of 670 or higher. While a lower credit score may allow you to qualify for a card, you will most likely incur a greater interest rate or receive fewer rewards.

You must employ credit repair services if you have a low score. Credit repair professionals can guide you in getting close to the 850 credit score. A typical top rated credit repair company will check for errors that may affect your credit report and sctop-ratedore. You don’t need to spend much in most cases, as you can get cheap credit repair.

Why You Need Business Credit Card for Your Side Hustle

While you are not mandated by law to have a business credit card, it can help you separate your business and personal expenses. It can also help your business build credit, expand your credit options, and provide rewards and perks.

Here’s what you should know before applying for a business credit card.

1.   Keep Business and Personal Expenses Separate

Separating private and business expenses simplifies tax and financial preparation. Keeping expense records can be difficult when you have a job and a side business. However, you can refer to your credit card statements if you have a business credit card. Accurate bookkeeping also aids in avoiding costly errors when filing taxes.

2.   Get Access to Significant Start-up Funds

Depending on the side business you initiate, you may have to invest a few dollars to get it started. For instance, suppose you want to create and sell clothing or other items on an e-commerce site. If this is the case, you may need to make purchases and create a website.

Instead of postponing your side hustle until you have enough money, look into getting a business credit card. While you may not have sufficient funds, a bank most certainly does. But, because you don’t want to overspend and go into debt, it’s wise to speak with a professional in your field. Getting into debt will destroy your credit score, and you will require the services of credit repair professionals.

3.   Perks and Rewards

For business-related purchases, several business credit cards give rewards such as travel points and cash backs. For example, you could receive benefits for spending money on shipping, social media, and online advertising or receive money on your internet, cable, and phone bills. Some card companies will also give you an introductory bonus if you get a new card and spend a stipulated amount within a specific period.

4.   Impact on Credit Utilization is Minimal or Non-Existing

Many small business cards offer more significant credit limits than individual cards as a bonus. With an elevated credit limit comes the ability to use credit less frequently. In other words, a $700 charge on a personal card with a $1,000 limit consumes 70% of your available credit. Make a $700 charge on your $7,000-limit business card, and you’ve only used a tenth of your available credit.

Some business credit cards do not report credit utilization to credit bureaus at all, so if your company incurs more expenses than usual, it may have no effect on your credit score. However, like all credit card companies, they will report late payments.

5.   Protection When Clients Fail to Pay On-time

There will always be clients who do not pay on time. When you’re first beginning, this can be disastrous. A small business credit card allows you to continue doing business until the client pays you.

And, with current annual percentage rates as low as they are, this isn’t something that should keep you awake at night. Just make sure to pay your credit card bill as soon as your client pays you.

6.   Both the Interest and the Annual Fee are Tax Deductible

If it takes you longer than expected to turn a profit and you end up paying interest on your business card balance, you can deduct those interest charges from your taxes. Annual fees are tax deductible as well.

Take into account that these charges will still cut into your profits in both cases. It’s still best to pay off your credit card monthly and only pay an annual fee if the benefits outweigh the fee. This can be a significant benefit over utilizing your credit card for business expenses.

If you owe interest on your personal card, you can only deduct the interest portion from your side-gig purchases. This can be time-consuming to calculate during tax season. Furthermore, even if you use your card for business purposes, the cost of any annual fees cannot be deducted.


Make the most of your business card once you’ve obtained it. Your activity will most likely appear on your personal and business credit reports. Delayed payments and other negative activity on your business credit card can therefore harm your credit score.

Fortunately, establishing business credit is a simple process. Most importantly, make all of your payments on time and avoid exceeding your credit limits.