Reader Question: Is it OK to Get a Business Credit Card when I Don’t Own a Business?

I got this email from a reader this morning regarding Chase business card:

I have received multiple pre-approval letters from chase for a business credit card. 3% cash back at home improvement centers, 3% cash back at restaurants, 3% cash back at Staples and such. Being a new home owner the lure of 3% cash back at home depot and Lowe’s where I spend most of my time as too much to resist. The problem is, I’m not a business owner. So I could shred the pre-approval letters but after about the third one I went and applied and received my card … Now my wife is all worried that we are going to get in trouble. Should I be concerned?

Personally, I don’t know how to answer this question because I don’t own any business and never had a business card. A quick search didn’t get me anything except what I found from Chase website as terms of their business card:

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.

Does this imply that I shouldn’t use the card if the expenses have nothing to do with any business? If so, what would be the consequences if I use the card for non-business related spending like what the reader did? Can I continue to use the card or have to cancel it? Please leave your comments if you have similar experience to help the reader out.

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6 Responses to “Reader Question: Is it OK to Get a Business Credit Card when I Don’t Own a Business?”

  1. broknowrchlatr |  Apr 20, 2007 at 5:29 pm

    Retailers, banks, companies do not care if you ‘pretend’ to be a business. Selling a card as a business card is simply an advertizing gimmick. After all, businesses make them a lot of money so they want them to feel more inportant than regular Joes. They want you to feel special with them if you get their card. If you look hard enough, you can pretty much always get the same card offered as a non-business card.

    As a related topic… Dell has a business section of their web site. If you compare that and the Home/HomeOffice section, the prices are about the same. Their specials will vary. One may offer a free upgrade, while another offers free shipping. The sections are targetted with advertisements and sprecials tailored to who they think you are. But, they really don’t care if you are a business. I’ve bought things there and submitted my business name as things like “John’s non-Profit Carbon Monoxide Distributer” (pointing out that respiration causes me to ‘distribute’ CO)

    Think about it this way. You are not getting a special deal; they are not getting any government kickbacks for having more corporate users; and, frankly, they don’t care.

    Even if they did care… What recourse do they have? Theire is no legally binding definition of a business, not any binding definition of work related expenses. You could say your blog is your business and a purchase like dining out is a business related ‘public apprearance’. The worst they could do is cancel the card. I’d bet a buffalo nickle that nothing will ever come of it.

    As for the card ‘terms’. This is most likley just a means of them trying to make business owners feel special.

  2. Savvy Steward |  Apr 20, 2007 at 6:34 pm

    This has been discussed a lot in the Fatwallet Finance forums and most people would agree that there is nothing wrong with applying for a business credit card because: If you have ever sold anything to someone(e.g. Ebay), then you could technically call yourself a Sole Proprietor. When you apply for a card they will ask you for your business tax ID number. In the case of a sole proprietor, you can just put your SSN number.

    Of course once you get the card, using it for only “qualified” business expenses is another issue.

  3. tim |  Apr 21, 2007 at 8:47 am

    thanks for posting my question.

    they did not ask for any type of ‘tax id’ when i signed up with the pre-approval letter they sent.

  4. Yan |  Apr 21, 2007 at 10:10 pm

    I got Amex business card when they had a $250 promotion last month. SSN is your Tax ID if you are a sole proprietor. I try to use it for office related expenses, e.g. printer paper, just to be clean. However I doubt Amex would oppose if I had to charge groceries one day. ;-)