Author Topic: Question about business credit cards  (Read 2664 times)

Bones81

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Question about business credit cards
« on: January 19, 2017, 12:39:47 PM »
Tried searching for this on the forums but received a database error, so apologies if it's been discussed elsewhere. 

Chase is offering its Ink Business Preferred credit card with an 80k bonus point offer for $5k spent in 3 months.  Reading on other forums, it's pretty simple to apply for business cards as a sole proprietorship.  I currently rent my guest room out on airbnb, so I guess this could count as my business.  I live in Texas; according to the web research I've done, you can establish a sole proprietorship without filing any legal documents with the Texas state government.  I wouldn't need an assumed business name and can use my SSN as I don't need an EIN since I don't have any employees. 

Is it that simple or am I missing something?  I basically report the money I've made on airbnb so far, the money I expect to make this year. provide my personal income info and SSN and that's it?

Thanks

NoStacheOhio

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Re: Question about business credit cards
« Reply #1 on: January 19, 2017, 12:47:22 PM »
I have an AmEx Open small business card on my SSN with no state paperwork filed, so yes.

Mother Fussbudget

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Re: Question about business credit cards
« Reply #2 on: January 19, 2017, 02:05:33 PM »
+1.  I have the same card for my writing business.  You understand it perfectly.

Bones81

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Re: Question about business credit cards
« Reply #3 on: January 20, 2017, 04:49:40 PM »
Got approved! 80k points here we come. 

inkquestion

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Re: Question about business credit cards
« Reply #4 on: March 16, 2017, 04:14:12 AM »
+1.  I have the same card for my writing business.  You understand it perfectly.

I'm a self-employed writer too, and I would love to apply for the Ink Business Preferred card. I have what feels like a dumb question, but I'm having trouble finding a clear answer, so I'll ask here: Is it legal to use a business credit card, including Ink, on personal purchases that are unrelated to your business? My actual business expenses are very low (at least as defined by the IRS when I calculate my deductions), so if I can't use a business card on non-business-related expenses, then I probably shouldn't apply for one.

I looked in the Pricing & Terms document for Ink Business Preferred, and found this sentence: "By becoming a Visa Business Card cardmember, you agree that the card is being used only for business purposes and that the card is being issued to a public or private company including a sole proprietor or employees or contractors of an organization."

...that seems pretty clear to me, but I'm getting confused because the way I see people talking about business credit cards, it often sounds like they might be using them for plenty of personal purchases, too. But maybe I'm just misunderstanding and all of these people just have much higher business expenses than me...or they're being a lot more flexible than I am on what they define as a business expense.
« Last Edit: March 16, 2017, 04:32:37 AM by inkquestion »

MoonLiteNite

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Re: Question about business credit cards
« Reply #5 on: March 16, 2017, 05:20:46 AM »
It is that simple.
And really for a Credit card there is not much to worry about anyways. Now if you start using room rentals and deductions for taxes, then you need to be a bit more careful :D

catccc

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Re: Question about business credit cards
« Reply #6 on: March 16, 2017, 10:02:58 AM »
Yes, it is that simple.  I keep books for a small business as a sole proprietor and applied for the Chase Ink last December.  DH and I are headed to Hawaii in November with bonus points to spare.

AFAIK, from an accounting perspective, there is nothing illegal about using your company credit card for personal purchases, but you can not deduct those personal purchases as business expenses for tax purposes.  So, let's say Joe Schmoe owns a bike shop as a sole proprietor.  He has a business card and sometimes uses it for business, but sometimes he buys a gift for his wife.  (They have joint accounts and this is the only way he can surprise her!).  When he accounts for the personal charge, he will debit owner distributions, and credit the card liability.  See, nothing recorded as a business expense.  As opposed to buying supplies for the shop, in which case the transaction would be to debit the expense and credit the card liability.

IDK about Chase's agreement terms, but they are very unlikely to investigate, IMO.  From what I've seen in travel hacking forums, my understanding is that many, many people open business cards and put personal purchases on these cards to meet minimum spend.

So, in summary, it is against Chase's terms, but it is not illegal.  Some would say commingling business and personal purchases in the same account can lead to confusion or disorganization, but for most sole proprietors... big whoop.  Just account for it properly and file your taxes accurate.  My guess is Chase has bigger fish to fry than Joe Schmoe who got a bonus and only $500 of his $5000 minimum spend happens to be business expenses.

catccc

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Re: Question about business credit cards
« Reply #7 on: March 16, 2017, 10:05:34 AM »
From flyertalk, a good explanation, if it is accurate:

"Why does Chase have in the agreement that your spend has to be for business?"

"Business cards are exempt from most USA consumer protection regulations. For example, the issuer can change the fees, interest rates, or minimum payment requirements on short notice, and they are permitted to establish their own rules for processing disputes. However, just labelling a product as a "business" card isn't sufficient, they need the applicant to represent that the card will be used exclusively for business purposes."

inkquestion

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Re: Question about business credit cards
« Reply #8 on: March 16, 2017, 12:20:47 PM »
Thanks very much for all the info, catcc!!