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How to apply for a credit card if self employed

how to apply for a credit card if self employed

Occupation: Credit cards are available for self-employed and salaried individuals. Credit score: You need a good score to get a credit card. You will need to. It should also allow you to add employee cards, set credit limits, Do you need a business credit card if you're self-employed? You may qualify if you sell items via online storefronts, such as Amazon or eBay, or offer lessons for.

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: How to apply for a credit card if self employed

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How to get a credit card for self-employed workers

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If you are self-employed, run your own business, are an independent contractor or a freelancer it can be a little more complicated to get a credit card.

To make your search for a credit card a little easier, we’ve put together a bit of information on how you can navigate the application how to apply for a credit card if self employed and what you should expect to be asked for by potential card providers if you’re self-employed.

This will assist with additional expenses, especially if you’ve only just started on your path to running a successful business. Keep reading to find out what to expect when applying for a credit card.

Why do I need a self-employed credit card?

  • Spread the cost of small expenses
  • Protect your purchases
  • Improve your credit score

Having a credit card to use while self-employed can be very useful, especially in the early stages of setting up your business when there a lot of small expenses. Whether it’s stationery to note down orders, or cleaning products to keep your work environment spotless, there are always little extras that will threaten to reduce your bank balance.

Whilst there isn’t an exact credit card aimed at the self-employed, there are plenty of providers who will still accept you for credit even if you run your own business.

What are the benefits of getting a self-employed credit card?

  • Spread the cost of smaller expenses
  • Extra line of credit
  • Improve your credit score
  • Protect your purchases through Section 75

A credit card has other benefits, including the ability to gradually improve your credit score, as long as you’re able to stay within your limit every month.

You might find that a credit builder card will come in handy if you have struggled with borrowing in the past and would like to make improvements to your score for the future, without compromising your current cashflow.

You will also benefit from getting added protection from making purchases on your credit card, for items valued between £100 and £30k. This is down to Section 75 of the Consumer Credit Act, which outlines the way you can claim for a refund through your credit card provider if if a retailer shuts down or flat out refuses to give you a refund.

Find out more about credit cards in our article: getting your first credit card with confidence.

The problem with getting a credit card when self-employed

A credit card company, or any credit provider for that matter, will always want proof that you’re able to repay the amount you’ve borrowed. This usually involves you proving you have a regular income.

This can be a little different for those who’re self-employed, since your income may differ every month or might have changed in the last 12 months as your business has grown bigger. It’s all a bit more difficult to prove.

Therefore, it’s worth seeking out those providers who still accept someone who is self-employed, or have a financial product directly aimed at sole traders, independent contractors or freelancers.

What you will need when applying for a credit card

If you run your own business but would still like to apply for credit, you will just need to provide more evidence that your earnings are consistent. You may need to provide the following when you apply:

  • Proof of what you earn – either bank statements, a tax return or evidence from an accountant showing your profits on an annual basis
  • Proof of your business finances - some providers want at least 2 years of statements to show you’re earning money on a monthly basis, or they might need you to have a minimum turnover every month
  • Your business credentials – this might include your Companies’ House number and your Data Protection registration number
  • Proof that your business is based in the UK – this will simply be your UK address and any other applicable details

Unfortunately, some providers will simply reject you for being self-employed, as they will only accept those in regular employment. Instead of applying straight away, you’re best off doing some research and finding out whether the provider will accept you as being self-employed or not.

Find out your eligibility

Rather than applying directly for a credit card, it’s worth checking your eligibility first. If you fill out our moneymatcher comparison tool you will find out which credit cards you’re eligible for, or even find alternatives that will satisfy how to apply for a credit card if self employed borrowing needs.

You just need to provide a few personal details and you will get personalised options to suit your requirements. The best bit is that it won’t affect your credit score, unlike a rejection from a credit card provider, which could reduce it.

If you’d like to find out more about credit cards, head over to our credit card insights here.

Start your search with moneymatcher today

Just enter a few details about yourself and we will find products to match your circumstances


Supply application documents

You will need to provide us with:​

  • Your most recent Individual Tax Return prepared by a registered taxation agent (all pages) and corresponding ATO Notice of Assessment no older than 18 months AND​

If you operate your business as a Sole Trader:​

  • Most recent Profit & Loss statement and Balance Sheet no older than 18 months (if these are not produced then details of business income and expenditure must be clearly evident in your Individual Tax Return in the supplementary income self-employed worksheet).

If you operate your business as a Partnership:​

  • Partnership Tax Return, Profit & Loss statement and Balance Sheet no older than 18 months (if these are not produced then details of how to apply for a credit card if self employed income and expenditure must be clearly evident in your Individual Tax Return in the supplementary income self-employed worksheet).​

If you operate your business as a Company:​

If you have prepared or are preparing your own Individual Tax Return, a corresponding ATO Notice of Assessment must also be provided to be acceptable. ​

Please remember to mask or remove your Tax File Number and Payment Reference Number from any documents before being submitted to ANZ. ​


6 Reasons to Get a Small Business Credit Card If You're Self-Employed

There's no doubt that working as a freelancer poses unique challenges. There are matters of receiving health and retirement benefits to establishing a work-life balance to even having the discipline to work independently. Finances shouldn't be one of those challenges.

When I was first starting out, I assumed that I would have to fund everything myself - and that led to using personal credit cards to do it. The line between my business and personal life blurred. It quickly got confusing and stressful trying to separate the two. I found a solution by using a business credit card and the rest is history.     

Here are six reasons why you should use a business credit card if you're self-employed.

1. Taxes will be much easier.

Working out your taxes as a freelancer can be a headache inducing experience (to say the least). With the use of a business credit card, you can use the statements to conveniently prepare your tax forms. This method beats spending hours going over all of your statements and receipts from the year, trying to figure out if that trip to the store was for supplies or for groceries.

If you use an accountant, consider how much you pay them by the hour. You can save money by using a business credit card instead of paying them for hours of rummaging through your personal credit card history. Whether you do your own taxes or hire an accountant, it's worth it to keep things separate.

2. Take charge of your finances.

A business credit card isn't only helpful come April 15th. Business credit cards are also valuable year round because it allows you to analyze your spending. You can create a budget much easier and quicker instead of going through nondescript bank statements. Plus, you'll have added protection should your account get hacked or card get stolen.

3. You'll have a backup for any unexpected opportunities.

Let's say an opportunity for growth gets presented and you have to move quickly, otherwise the opportunity will go to someone else. Business for the self-employed isn't always consistent so having an alternate financial source can be a relief. Plus, a business credit card usually has higher spending limits than a personal one.

When I was first starting out, I had a last-minute opportunity to attend a workshop that was going to be beneficial. This workshop was an opportunity to build relationships and get one on one feedback on my business from a few people that I wanted to be mentors. I was able to attend this life-changing workshop thanks to my business card.

4. Build business credit.

Building your credit as a business is a smart idea. By doing this, you'll give yourself a better chance of getting a quality business loan. Note that a business credit score is different to a personal credit score. Having good business credit can show lenders that you are serious about your business and aren't a risk to them. This is a win for future opportunities.

5. If you grow, you'll have a way to share with your employees.

With many jobs moving towards the unconventional, the likelihood that you will work with other people who are also freelancing or self-employed is high. Perhaps you'll find a partnership with a colleague beneficial. Maybe you're better at communications while they're better at design.

Should you decide to work together or even if you prefer to hire contractors, you can provide access to your finances by getting them a card in their own name. It'll be easier to manage and you don't have to worry about lending out your own card. Plus you'll have legal protection, especially if you've established yourself as an LLC (Limited Liability Corporation).  

One of the fun benefits of using a business credit card is the perks, points, and rewards that come with it. For instance, a Forbes survey of the best business credit cards found that you can earn over $1000 in travel for opening an account and meeting the required spend. You are spending that money anyways so you may as well get something out of it.

I've personally used credit cards rewards for many travels and travel upgrades. I've shared rewards with my family so that they can see what I see. I've even used it to go to exclusive events like the Emmy Awards and the US Open. All of this thanks to a little piece of plastic.  


Universal Credit if you're self-employed

If you are self-employed you may be able to claim Universal Credit

If you are self-employed and want to claim Universal Credit, you will attend a Gateway Interview where a 'gainfully self-employed test' will be carried out.  This involves checking whether your self-employment is:

  • organised, developed and regular
  • expected to make a profit and
  • your main job

If you are self-employed and also employed, a decision will be taken to decide which is your main job.

You will need to go to an interview at your local Jobs & Benefits Office and provide evidence of your self-employment (for example, your business plan, copies of invoices and receipts, or your accounts from the previous year).

If the decision is made that you are not gainfully self-employed, you may need to look for, and be available for other work. You will still need to report any earnings from your self-employment so they can be taken into account when calculating your Universal Credit payments.

As part of your claim you will need to accept a ‘Commitment’ which you will agree with your work coach.

Your Commitment sets out the things you need to do to prepare for work, look for work or increase your earnings (where appropriate).

You will regularly discuss and update your Commitment with your work coach, and you will need to agree to the Commitment each time to keep getting Universal Credit.

The actions set out in your Commitment will depend on things like your health, your responsibilities at home and how much help you need to increase your income.

How Universal Credit is worked out if you are self-employed

Payments made through the Self-Employment Income Support Scheme will be treated as earnings in Universal Credit.  This means payments will be taken into account in the Assessment Period in which they are received.  In this way Universal Credit provides support as your earnings change.

To work out your Universal Credit payments, it will be assumed you earn at least the ‘Minimum Income Floor’ even if your actual earnings fall below it.

Minimum Income Floor


The rules for self-employed people claiming Universal Credit were temporarily different because of the coronavirus pandemic.

From 1 August 2021, this has changed and the pre-pandemic rules are being applied again.

This means that a check will be undertaken to see if you are gainfully self-employed. If so, your payment will be calculated using the Minimum Income Floor.

Discretion will be used when applying the Minimum Income Floor for self-employed people who continue to be impacted by the economic downturn resulting from the pandemic.

You may be eligible for a start-up period. If you were in a start-up period on 13 March 2020, your start-up period will be extended.

If you already have a claim, you will be contacted about these changes before they happen.

The Minimum Income Floor is the minimum amount of earnings you would be expected to earn in an Assessment Period. This is based on the lowest amount an employed person with similar circumstances could be expected to earn in an Assessment Period.

If you earn more than the Minimum Income Floor you will get less Universal Credit.

The Minimum Income Floor will not apply for a ‘start-up period’ of up to one year.  During this time, Universal Credit will use your actual earnings to work out the amount you are entitled to.

The Minimum Income Floor won't apply to you if you:

  • are not considered gainfully self-employed,
  • are in a start-up period, or
  • are in:
    • the no work-related requirements group
    • the work focused interview group, or
    • the work preparation group

Your work coach will be able to tell you if you are in one of these groups.

If the Minimum Income Floor doesn't apply to you, your Universal Credit payments will be based on your actual income.

Work Allowance

You can earn a certain amount before your Universal Credit payments are reduced, if you or your partner:

  • are responsible for a child or young person or
  • have a disability or health condition that affects your ability to work

This is called a ‘Work Allowance’. You will keep 45p of every £1 you earn above your work allowance.  Your work allowance will be lower if your Universal Credit payment includes help with housing costs.

Your CircumstancesWork Allowance
You get help with housing costs£335 per month
You don't get help with housing costs£557 per month

For example, if you have a disability or you are living in temporary supported accommodation and you do not receive help or support with your housing costs from Universal Credit or Housing Benefit, your Work Allowance will be £557. This means you can earn £557 before your Universal Credit payments start to be reduced.

Self-employment information you need to give to get Universal Credit.

Every month you must tell us:

  • all payments you received (Do not include amounts you have charged but have not yet received) in the Assessment Period, and
  • your permitted expenses, income tax, National Service credit union branches near me contributions and any pension contributions that qualify for tax relief

Permitted expenses are expenses that are:

  • appropriate to the business
  • necessary to the business
  • not excessive

Your work coach can give you more information about permitted expenses.

If your expenses for an assessment period are unusually high, you can’t offset them against your income in future assessment periods. This applies even if your expenses for the month are higher than your how to apply for a credit card if self employed your business makes a loss in an assessment period, Universal Credit will take this into account when working out earnings in future assessment periods. The minimum income floor will continue to apply.

If your business is new

If you’re classed as newly gainfully self-employed you may be considered to be in a ‘start-up period’.

A start-up period is how to apply for a credit card if self employed if you are taking active steps to increase your earnings, and have not had a previous Start-up Period in the last 5 years. If it is over 5 years ago, the self-employed work must be a new business activity.

The Start-up Period applies for 12 months, and is applied from the beginning of the assessment period in which the gainfully self- employed decision is made.

During a start-up period, if your earnings are low you will not have to look for other paid work. However, you will have to go to an interview with your work coach every three months to prove you are still gainfully self-employed and taking steps to increase your earnings.


Use of Company Credit Cards for a Self Employed Business

By Bonnie Conrad

As a self-employed business owner, credit cards can give you additional flexibility when purchasing the supplies you need to keep the business running. But while credit cards provide real convenience, they can pose risks as well. When using credit cards for your business, you need to keep a close watch on your spending to make sure the convenience of using plastic does not interfere with your business' profitability or cash flow needs.

Decide ahead of time which, if any, of your employees will have access to a company credit card. Limit company credit card access to trusted employees with a legitimate need for those cards. For instance, your top salesperson might need a company credit card when entertaining a top prospect, while your purchasing manager might need the flexibility to purchase office supplies with a credit card.

Require that each employee who is granted a credit card sign an agreement stating they are ultimately responsible for the charges made on the card. Bank of eastman magnolia state bank agreement should clearly indicate that the credit card is to be used only for legitimate business purposes.

Ask each holder of a company credit card to hand in receipts each time a purchase is discover online banking bonus. This will make it easier to reconcile how to apply for a credit card if self employed at the end of each month. Keep copies of the receipts in a separate folder and use them to double-check the balance on each card against a list of authorized purchases.

Sign up for online access to your self-employed business bank account, and check the new charges at least once a week. Review the new charges and check them against the list of receipts from your purchases and those of your employees.

Pay the balance on your credit cards promptly as soon as they arrive. Use your business checking account to make the payments. Keeping your personal and business expenses clearly separated makes everything from business planning to tax preparation easier.



Writer Bio

Based in Pennsylvania, Bonnie Conrad has been working as a professional freelance how to apply for a credit card if self employed since 2003. Her work can be seen on How to apply for a credit card if self employed Factor, Constant Content and a number of other websites. Conrad also works full-time as a computer technician and loves to write about a number of technician topics. She studied computer technology and business administration at Harrisburg Area Community College.

how to apply for a credit card if self employed
how to apply for a credit card if self employed

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