Best Credit Cards for Self-Employed Individuals for 2024

A good business credit card can be a powerful tool for a business of any size. And this goes for self-employed freelancers and contractors, too. Having the right credit cards can make life -- and accounting -- much easier. The best credit cards for self-employed sole proprietors also provide valuable purchase rewards and charge no annual fees. You work for yourself, and your business credit card should work for you, too. Find the right fit with our picks for best credit cards for self-employed business owners below.

If I'm self-employed, can I apply for a business credit card?

You can apply for a business credit card if you're self-employed. If you're self-employed, you're a business owner. That's the way the IRS sees it -- and so do the credit card companies.

If you are a freelancer or independent contractor, you're likely a sole proprietor. Your official business title is that of "owner." If you've registered your business as a distinct entity, you may have a different structure. Some self-employed folks have a registered LLC, LLP, or corporation. But in all of these configurations, you are eligible for a business credit card.

Keep in mind we're talking about a small business credit card. If you have a large corporation, you may need a corporate credit card.

LEARN MORE: The best business credit cards

How to apply for a business credit card when self-employed

Most of the questions on the application are straightforward, and very similar to those on a personal credit card application. Here's the information you may need to apply for a business credit card:

• Your name
• Your address
• Your date of birth
• Business structure (sole proprietor, LLC, etc.)
• Legal business name (this may just be your own name)
• Date business was established
• Tax ID type and number
• Average business revenue
• Estimated monthly spending (what you'd spend on the card)
• Business address (if different from your own)
• Business phone number (can be the same as your own)
• Business category (arts, education, retail, etc.)

The question that may confuse self-employed applicants is the Tax ID number. The type of Tax ID number depends on your business structure. If you have an LLC, you need an ETIN (employer tax ID number). When you have a sole proprietorship, however, you typically file taxes using your personal Social Security number.

A final part of the application is deciding if you need an employee card. Obviously, if you don't have employees, you don't need one.

What are the pros and cons of having a business credit card when self-employed?

As a self-employed worker, you may wonder why you need a business credit card. After all, you likely file taxes using your personal Social Security number, so why not just use your personal credit cards?

There are several good reasons to get a business credit card. And while there are some cons, they're definitely outweighed by the pros.

Pros of business credit cards

Even if you're self-employed as a sole proprietor, the government considers your small business its own entity. As such, it deserves its own credit card. Here are a few reasons why:

• Streamlines finances to keep your personal and business expenses separate: This can make a huge difference at tax time. A business card makes it easy to track your tax-deductible business expenses. Pair it with a business checking account for nearly stress-free accounting.
• Some business credit cards offer bonus rewards categories you can't get elsewhere: Consumer cards don't give you bonus rewards on everyday business expenses like office supplies or digital advertising.
• Build business credit: Just like you have personal credit reports and scores, your business can have business credit reports and scores. You typically need to form an LLC or corporation to build business credit. Using your business credit card can help build your business credit.

Cons of business credit cards

There are some drawbacks to business credit cards. But many of those drawbacks also apply to a personal credit card. Here are some potential issues to keep in mind:

• Require a personal guarantee: Most business credit cards require that you personally guarantee your card. This means you're on the hook to pay off the balance even if you go out of business.
• May show up on personal credit: You usually undergo a personal credit check when you apply for a business credit card. Plus, a few card issuers report your business card activity to the consumer credit bureaus. Paying on time might help your personal credit, but making large purchases could hurt your utilization rate (how much of your available credit you use). This may temporarily reduce your personal credit score.
• No CARD Act protections: Many of the protections you enjoy on your personal credit cards are thanks to the CARD Act of 2009. Those legal protections do not extend to business credit cards. But many business credit card issuers offer you some or all of those protections anyway.

More information: Do Business Credit Cards Affect My Score?

How to pick the best self-employed business credit card

Every business is as unique as its owner. There's no one-size-fits-all business credit card for every self-employed individual. There are as many types of credit cards in the business card world as there are regular credit cards.

Choosing the best credit card for your business depends on several factors:

• Your personal credit score: The credit card company will run a personal credit check when you apply for a business card. If you have bad credit, you can look into a secured credit card (for you or your business) to help build credit.
• Your industry: The type of work you do will dictate your expenses. If you're a freelance writer, for example, you may spend a lot on internet and phone bills. If you're an independent rideshare contractor, your biggest expense may be gas. Choose a card that rewards you for the things you buy most often.
• How much you spend: If your average expenses are low, you probably don't need a business card with a $500-a-year annual fee. But if you put a lot of money on your card, it may be worth the annual fee for extra perks and rewards. This can also affect your ability to get a sign-up or welcome bonus.
• The effort you want to put in: The type of rewards you earn will determine how much time and energy you need to redeem them. If you want a low-fuss card, cash back is the way to go. If you want to put in time to maximize value, reward points and miles may be better picks.

Tips for using a business credit card while self-employed

A lot of the best tips for using your business credit card also apply to your personal credit cards:

• Pay your bill on time, every time.
• Pay in full when possible to avoid interest fees.

Another solid bit of advice specifically for people with business credit cards: Open a business bank account. One of the great things about business credit cards is they help keep your business and personal expenses separate. With a business bank account, this process becomes even easier.

LEARN MORE: Best business checking accounts

Having your client invoices or payments deposited to your business account makes it easier to track your income. You can also pay your business credit card with your checking account. That way, you're not paying business expenses from your personal accounts.

If you want to take it a step further, open a business savings account, too. When you're self-employed, you're responsible for paying your own taxes every quarter. Having a separate account for taxes ensures you have the money you need when taxes come due.

Our credit card methodology

At The Motley Fool Ascent, we rate credit cards on a five-star scale (1 = poor, 5 = best). Our rating criteria includes rewards rates, welcome bonuses, fees, and perks like travel credits and 0% intro APR offers to evaluate our ratings.

Our highest-rated credit cards have:

• A rewards rate above 2% (or 2x points or miles) with average spending, or competitive 0% intro APR balance transfer and purchase offers
• Attainable welcome bonuses that make up for any annual fees
• Low annual fees or a balance transfer fee of 3%
• Top perks such as purchase and travel protections, no foreign transaction fees, travel credits, and status upgrades

We combine these factors with an evaluation of brand reputation and customer satisfaction to ensure you're getting the best card recommendations. Learn more about how The Ascent rates credit cards.