3 Reasons Gig Workers Might Want a Small Business Credit Card

Are you a gig worker or freelancer? Whether you do this type of work as your full-time job, or simply pick up gigs as a side hustle, you are technically considered a one-person business if you have any self-employment income.

Among other things, this means you're eligible to apply for a business credit card. There's a common misconception that you need to have employees or an employer identification number (EIN) to do this, but it's not true. A self-employed person can use their own Social Security number to get a business credit card, and doing so could be a smart idea for a few reasons.

Separation of expenses

First and foremost, a business credit card can help you keep expenses related to your gig work or freelancing separate from your personal expenses. As an example, if you're a freelance writer and pay to travel to a conference, this could be an expense to charge to your business credit card.

Keeping expenses separate can make things much easier when tax time comes. Instead of hunting through a year's worth of bank and credit card statements or sorting through a box of receipts, you'll have a handy list of business expenses to reference.

Manage cash flow

In some types of gig employment or freelance work, you might have out-of-pocket expenses for a certain amount of time before you get paid. Using the freelance writing example, you might need to invest in a new laptop before you get started, even though you might not receive any payments for your work for a couple of weeks. A business card allows you to charge purchases like these and pay the bill once you get paid.

One particularly great card for managing cash flow is the Amazon Business Prime American Express Card. Among other benefits, Amazon Prime members can get 90-day 0% APR payment terms on eligible Amazon.com, Amazon Business, AWS, and Whole Foods purchases. Terms apply.

Rewards for necessary purchases

Last but certainly not least, if you're going to incur certain necessary expenses related to your gig or freelancing work, you might as well get rewarded for them.

Some great business credit cards have fantastic rewards rates. Just to name a couple of top examples:

• The Ink Business Cash® Credit Card has no annual fee and offers 5% cash back on purchases at office supply stores and on internet, cable, and phone services, on up to $25,000 in purchases per year.
• The Costco Anywhere Visa® Business Card by Citi offers 4% back in rewards on gas, 3% back on restaurants and eligible travel, and 2% back on Costco purchases.

To be clear, it doesn't make sense to buy things you don't need just to get rewards, and playing the "rewards game" only makes sense if you pay your balance in full before it's due. But if you have work-related expenses that are needed, getting rewarded for them makes a lot of sense.

The bottom line

Even though you might not think of your side hustle or gig work as a "business," you are technically a one-person business in the eyes of the IRS, as well as credit companies that offer small business credit cards. And with several good reasons why a small business credit card can be a great financial tool, now could be a great time to find one that meets your needs.