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Americans are joining the gig economy in droves. In 2016, the Freelancers Union found that 35% of the U.S. workforce engaged in freelance work, an increase of more than 1 million people from the prior year. With freelancing on the rise, many workers may be managing business finance for the first time.
A separate credit card for business expenses offers several advantages. Most importantly, it makes tracking business costs easier and can help avoid headaches during tax season. Small business credit cards also reward freelancers for their business spending.
Here are three small business credit cards that can help freelancers fund their business.
Perks: Two points per dollar on up to $50,000 in purchases each year, one point per dollar thereafter
Welcome Offer Cardholders can earn 20,000 extra Membership Rewards points after they spend at least $3,000 in their first three months of card membership. [Editor’s Note: This story was updated to reflect the Blue Business Plus Card’s signup bonus.]
Annual Fee: No annual fee
Annual Percentage Rate (APR): Intro APR is 0% for 15 months on purchases and ongoing is 13.49% - 21.49% Variable.
Why We Picked It: Cardholders earn points that can be redeemed for business and travel, and additional features make it easy to track business expenses.
Benefits: All purchases earn double points, which can be redeemed for travel, office supplies and other business expenses. There are several additional travel protections and insurance policies. You can upload receipts from your mobile phone and connect your transaction records with QuickBooks.
Drawbacks: Fewer merchants accept American Express compared to Visa or MasterCard.
2. Chase Ink Business Cash
Perks: 5% cash back on up to $25,000 at office supply stores and utility providers (phone, internet and cable TV), 2% cash back on up to $25,000 at gas stations and restaurants, 1% cash back on all other purchases
Signup Bonus: $300 bonus cash back when you spend $3,000 in the first three months
Annual Fee: None
APR: 0% intro APR for 12 months, then 15.49% - 21.49% Variable variable.
Why We Picked It: The card earns extra cash back on a variety of business expenses.
Benefits: You’ll earn cash back on every business expense, with an extra incentive for office supplies, utility bills, gas and dining purchases. That covers many of the purchase types that help a small business run.
Drawbacks: The 5% and 2% cash back rates are capped at $25,000 in purchases each, and you’ll only get 1% back on purchases exceeding those limits.
Perks: 2% cash back on every purchase
Signup Bonus: $500 bonus cash back when you spend $4,500 in the first three months
Annual Fee: $0 intro for first year; $95 after that
APR: 19.24% (Variable)
Why We Picked It: With unlimited 2% cash back on all purchases, this card earns solid cash back no matter your business need.
Benefits: With 2% cash back on everything, every purchase puts money back in your wallet. Additional employee cards are free, and you’ll get a number of travel and purchase protection policies standard.
Drawbacks: You’ll start paying an annual fee in year two.
How to Choose a Credit Card for Your Freelance Business
Getting a separate credit card for your business expenses is a smart move, but you’ll want to choose carefully.
The right credit card for you depends on your goals. If you’re frequently traveling to meet clients, a travel rewards business card might make the most sense. If you’re working out of a home office and need to save every penny, a card with no annual fee might be suitable. If you’re just launching your business, a card with a long 0% APR intro period could help you pay down your up-front expenses.
You don’t have to use a business card for your freelancing business. It’s a good idea to have a separate card, but small business credit cards can have higher fees and penalties, as they aren’t regulated by the federal Credit Card Accountability Responsibility and Disclosure Act of 2009, which regulates consumer cards. Small business credit cards are typically better for businesses that spend tens of thousands of dollars per year to operate. If you’re a sole proprietor with a low overhead, you may want to consider getting a personal credit card to use only for business expenses.
Remember, these cards generally require good to excellent credit to qualify. If you don’t know where your credit stands, you should check your credit before applying, which you can do for free on Credit.com.
Image: Izabela Habur
At publishing time, the Capital One Spark Cash for Business and CitiBusiness AAdvantage Platinum Select World Mastercard credit cards are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for this card. However, this relationship does not result in any preferential editorial treatment. This content is not provided by the card issuer(s). Any opinions expressed are those of Credit.com alone, and have not been reviewed, approved or otherwise endorsed by the issuer(s).
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