Credit Cards for the Self Employed with Low Income

There are a number of great advantages that come along with taking the plunge and choosing to become self employed however in the beginning at least a regular income is not always one of them. This can make obtaining a credit card more difficult but with a little planning and extra effort you can actually get a credit card and perhaps one that offers far more than you had hoped for.

The Key to Credit Cards for the Self Employed

If you are self employed in any field you should already be keeping financial records pertaining to your income so that when January and tax time rolls around every year you can settle up with Uncle Sam – being self employed does not exempt you from paying taxes after all. If you want to get a new credit card or two these records will also serve as proof of income for the purposes of applications for such.

However getting a personal credit card can still be hard if yours is not a regular self employed income. The credit crunch has meant that lenders have really tightened up their lending criteria and getting a personal credit card with a lower self employment income is not at all easy right now. That is why your best bet might just be to stop thinking of yourself as a self employed person and start thinking of yourself as a business.

Setting up a sole proprietorship business is not difficult or expensive and you do not need a high priced lawyer to do so. It is the simplest way to begin a business although you may want to look into incorporating your business further down the line as it will remove you from being personally liable for its debts, which a sole proprietorship does not.

Either way you will need to get an EIN number from the IRS. An EIN – Employer Identification Number – is basically a business version of a social security number. It is an easy process that you can actually complete on-line and receive your new company EIN in just a few minutes. And one of the many things you can do with that number is to apply for a small business credit card.

The Small Business Credit Card Application Process

Whether you decide to stick with a sole proprietorship set up or incorporate your business the business itself will not have a credit profile in the beginning so even when you apply for a business credit card your credit score will be taken into account. However because you have a business now rather than just being self employed the sporadic income – or the lower levels of it – become more acceptable as that is to be expected of a start up business. The credit crunch has made getting a small business credit card a little harder but if you personally have fairly good credit and you have been keeping good financial records it is far from impossible.

Business credit cards come with a great many perks that personal credit cards do not, but you will – mainly for tax purposes – have to keep purchases made on the card separate from personal ones. However there are a lot of things that the IRS is willing to consider business related including gas, some travel, many dining expenses and more. Another thing the responsible use of a small business credit card will do for you is build your new business its own credit rating, opening the door to much bigger things.

Finding Small Business Credit Cards

Small business credit cards, like personal credit cards come with a number of different perks attached to them. There are low APR small business credit cards in the same why as there are low APR personal credit cards and there are also rewards cards as well, so you have to give the same consideration to choosing a small business credit card as you would to choosing a personal credit card. Here is a little information about some of the best of them:

Capital One Platinum for Business

Capital One offer several great business credit cards but this is the one that a self employed person starting a new business with fair to good credit themselves is most likely to be approved for as it is especially designed to help build small business credit. There are a number of advantages attached to this card that make it a good all round choice. The APR of 15.25- 19.25% is fairly good and there is a 12 month 0% APR attached to the card as well. There is a $39 annual membership fee but if you keep your account in good standing you are eligible to receive higher credit limits over time and once your business builds that all important credit rating you can apply for one of the other Capital One business credit cards that offer cash-back and other rewards.

US Bank Flex Perks Business Cash Rewards Visa

This is a small business credit card that is within the reach of many self employed people setting up their own business that has the added bonus of providing users with cash back rewards, something that is going to prove very useful to self employed people during the times when cash flow is a little light.

Most purchases earn 1% cash back but cellular service, restaurant, gas and office supply purchases earn 3%. As soon as your cash back balance reaches as little as $25 you can simply log into your account on-line and request it be transferred to your bank account without restrictions. There is also a 6 month 0% APR offer and the APR after that period is variable but quite reasonable.

Wells Fargo Business Rewards Platinum Visa

If you have fair credit (620 or up) you (and your new business) should be able to qualify for this business platinum card that offers rewards in both the form of cash back and/or travel rewards. Rewards are awarded at the rate of 1 point per dollar spent and can be redeemed easily on-line. The APR on this card is also very low – under 10% in most cases and there is no annual fee, another bonus that many people will appreciate.