FILE – This Aug. 11, 2019, file photo shows an American Express card in New Orleans. People who freelance or side hustle for work could have access to a useful tool they may not have considered within their reach: a business credit card. You don’t need employees or an LLC to qualify for these cards, which typically offer bigger sign-up bonuses and different rewards than personal credit cards. (AP Photo/Jenny Kane, File)
Entrepreneurial types who freelance and side hustle their way through the week likely have access to a tool that could help them thrive: a business credit card.
If you drive a rideshare part time, regularly resell on eBay or book paid photography jobs on the side, you may qualify for a business credit card. You don’t need to have a storefront, employees or an LLC.
That’s useful information for the movers and shakers of the gig economy because credit cards aimed at small businesses differ from personal cards. They offer more lucrative rewards and eye-popping sign-up bonuses you won’t find on most personal cards.
While a business credit card alone won’t determine whether your business prospers, small-business customers seem to like them. They are “significantly more satisfied” with their business credit cards than customers are with personal credit cards, according to a 2019 study by J.D. Power.
Among those is small-business owner Joe Brancatelli. He’s a publication consultant and founder of the business-travel subscription newsletter “Joe Sent Me.”
He considers his business credit cards among the tools that help make his business go. “They help me segregate my personal and business spending, which is important for tax and other reasons,” he said.
The cards also help cash flow. “It’s relatively easy access to credit, which some business folks can’t get otherwise,” he said. “The same bank that might turn you down for a traditional business loan will give you a small-business credit card.”
Of course, the key is to use the card’s credit line strategically without paying interest, he said.
QUALIFYING AS A BUSINESS
You don’t need a business credit history to qualify for a business credit card. If you engage in an activity that earns money without being someone else’s employee, you’re a business.
Your business doesn’t even need to make a profit, and you can say so on the application. If you don’t have a separate tax ID for your business — many sole proprietors don’t — you can use your Social Security number.
You qualify for a small-business credit card based on your personal credit history. Credit scores of 690 or above generally qualify, although issuers have their own approval criteria, which can vary by type of card.
Business credit cards typically come with bigger sign-up bonuses than personal cards. The difference can mean hundreds of dollars in rewards value.
Rewards on business cards might fit your spending better, too. For example, business credit cards might offer extra cash back for spending on office supplies, advertising and telecommunications services. Those could be more useful than bonus categories on a personal card that might include groceries, streaming services or home-improvement stores.
Business cards typically come with a higher credit limit. And the fees can be tax-deductible when used for business spending only.
Among the biggest benefits is simply having a separate card for business spending. That can help with expense tracking, running financial reports and gathering tax-return information. Employee cards are typically free.
Although it’s a credit card for your business, you generally have to provide a personal guarantee. That means if your business goes belly up, you’re personally liable to pay — even if your business structure otherwise protects you from liability, as with a corporation or LLC. Think of it as you, personally, co-signing for the credit card.
And if you want to build personal creditworthiness through your business credit card, that might not happen. Not all business credit cards report to consumer credit bureaus.
Business cards aren’t covered by the same federal consumer protection laws as personal cards. But issuers generally voluntarily offer similar protections, such as limits on fees, interest calculations and disclosures.
And those big sign-up bonuses? They typically require more spending on the card before you can earn them.
HOW TO CHOOSE
Picking a business credit card is similar to choosing a personal card: Find one that fits your needs and business spending patterns. If you plan to carry a monthly balance, a card with an interest-free period or low ongoing interest is more important than rewards.
If you’ll pay in full, rewards cards are a good choice. They come in the same flavors as personal cards: cash back, points or airline miles. The best cards may have annual fees, but some don’t. Business travel credit cards offer perks that road warriors would appreciate.
If your goal is to build a business credit history, make sure your new business credit card reports to the main commercial credit bureaus: Dun & Bradstreet, Experian and Equifax.
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This column was provided to The Associated Press by the personal finance website NerdWallet. Gregory Karp is a writer at NerdWallet. Email: email@example.com.
The High Court has granted permission to the Independent Workers Union of Great Britain (IWGB) to proceed with a judicial review that could extend health and safety rights to hundreds of thousands of so-called “gig economy“ workers.
The IWGB is arguing that the UK Government has failed in its obligation to transpose health and safety directives from EU law into UK law. Whereas UK health and safety law only protects employees, EU law extends these protections, to all those classified as workers.
If successful, the judicial review would force the Government to extend health and safety protections to all ’workers’, including those working on platforms such as Uber and parcel courier firms.
This would include a right to personal protective equipment (PPE) and a right to bring legal action against an employer if a worker suffers a detriment or is dismissed after refusing to work under unsafe conditions.
IWGB President Henry Chango Lopez said: “Gig economy workers have been among those with the highest death rates from Covid-19. This isn’t by accident, but the result of a failure by this and past governments to properly implement health and safety legislation. For far too long, the government has turned a blind-eye to the abuses of gig economy employers, allowing them to make up the rules as they go along, while ignoring the safety of their staff. With this case we will start to reclaim some of the basic rights that are being routinely denied to these workers.”
The Secretary of State for Business, Energy and Industrial Strategy has joined as a second defendant to the proceedings, alongside the first defendant, the Secretary of State for Work and Pensions. The Health and Safety Executive has been added as an interested party.
The IWGB has launched a crowdfunder to cover the potential cost liabilities, which the judge has now capped to £4,500.
A byline from Sharan Nair, Chief Business Officer & Co-Founder of Sequoia-backed CRUXPay and CoinSwitch.co — two booming Indian crypto ventures. The byline, entitled “The Growing Gig Economy Will Drive Cryptocurrency Adoption”, discusses the potential benefits for crypto adoption posed by the rising gig economy, and vice versa.
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On close examination, these industries have a significant amount of overlap beyond the shared ideals of autonomy and independence. The proper application of blockchain technology could remove obstacles within the global payments & payroll system, saving significant amounts of money for international gig workers. On top of this, cryptocurrency micropayments could facilitate a dramatic reduction in fees within freelance marketplaces, which would carry the added benefit of increased security. There has also been a correlation between the rate of unbanked populations and those working within the gig economy, particularly in the Indian context.
Fastenal is one of the best-performing stocks of the past decade. Since the beginning of January 2010, shares in the industrial distribution company have yielded an average annual return of 16%, turning every $10,000 invested into $44,264. Q2 2020 hedge fund letters, conferences and more In many ways, Fastenal is not the sort of business Read More
The Impact Of Covid-19 On The Gig Economy
The ongoing coronavirus pandemic has stirred up new difficulties for workers worldwide, taking a particularly strong toll on those that work on flexible contracts. The World Economic Forum reports that over 50% of gig workers have lost their source of employment due to COVID-19, with an additional 26% seeing a decrease in income.
These developments will inevitably produce a marrying of the gig and crypto economies. As far back as 2013, former CEO of Upwork, Gary Swart, proclaimed that “both businesses and workers are finding more freedom and flexibility to work whenever, however and with whomever they like.” Even prior to the surge in popularity of cryptocurrencies and the pandemic-induced shift towards remote working, a convergence of these overlapping economies was likely. A crypto-powered gig economy aligns with models of a more flexible working environment, as well as the financial ideals of crypto enthusiasts.