Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.
How to apply for a credit card when you’re self-employed
Am I eligible to apply for a credit card if I am self-employed?
Absolutely. If you’re self-employed and want to begin utilizing a credit card to either manage expenses or free up some cashflow, you can still apply for most credit cards.
You’ll likely have to prove that you have a steady income to show that you will be capable of making payments. That means you may be asked for documents such as a tax return or a profit and loss statement — it is smart to have any records on file that will help prove to a credit issuer that you are actually self-employed
What will I need to apply?
- Proof of earnings. You’ll typically need to show documents that verify a self-sustained income for at least the last two years. It can be anything from a tax return, paycheck stub, expense report, a profit and loss statement, or anything else that shows you have money coming in. If you have an accountant who can verify your income, you’ll have a much easier time when applying for a card.
- Savings. Your ability to save will show lenders that you’re able to manage money and that you will not be a high risk for for missing payments.
- Credit history. The better the credit history, the better chances you’ll have of being approved. This seems obvious but is worth repeating because it is what lenders will evaluate when deciding whether or not you’ll be approved for a credit card or loan in the future.
- Referrals. This ranks low as a factor will have any serious weight when deciding if you’re approved or not, but anything helps.
If you are applying for a credit card for either business or personal related expenses, be sure you stay within your means and have a budget and repayment plan lined up. This will ensure that you’ll get the most out of your credit card and help you steer clear of debt.
What if my credit card application has been denied?
Don’t stress. There are other options that can help get a credit card in your hands.
- Secured credit card. Secured credit cards can build credit and are a great way to roll your credit history down the right path. This type of card operates just like a regular credit card, but it is preloaded with funds that will act as security incase you default on payments .
- Cosigner. While this option will greatly improve your chances of being improved, it is important to know that when your cosigner signs the dotted line, they become responsible for any debt you acquire if you’re unable to make payments.
- Authorized user. This option is only available if someone who is in good credit standing will vouch for you and link a card to their account with your name on it. Only use this option if you’re sure that you’ll be able to use your card responsibly since it is linked to somebody else’s account and could negatively affect their credit.
Mistakes to avoid
Applying without researching
If you’re self-employed, you’ll need to provide additional documents and meet special eligibility requirements to receive approval. Rejected applications will have a negative impact on your credit file, so you want to conduct the necessary research to improve your chances of approval in the first place.
If you do your research beforehand to ensure you’ve met the eligibility requirements and have the necessary documents, you’ll increase your approval chances on your credit card application.
Applying for several cards in a short time period
If you’ve applied for a card and been rejected, don’t apply for another one right away, as this may put a mark on your credit file. Instead, do some research to figure out why your application was denied. If you didn’t have all of the correct documents, make sure you have all of the most recent versions of them when you apply again in a few months.
If you were rejected because of your credit history, you can start improving your credit history to increase your chances of approval next time.
Compare business credit cards
If you’re self-employed, you should have no trouble applying for a credit card as long as you prepare beforehand. If you follow this guide, ensure you meet the eligibility requirements and organize the necessary documents, you should have no trouble applying for a credit card.Back to top
More guides on Finder
Best bank accounts for freelancers and the self-employed
Compare the five best bank accounts for self-employed professionals and freelancers.
How to start a solo 401(k)
A retirement plan for self-employed individuals but may come with high administrative fees.
Does a car loan affect your mortgage application?
Find out how to increase your borrowing power and get approved for a mortgage even if you have a car loan.
T. Rowe Price review
Features, fees and complaints to consider before you apply for a T. Rowe Price account.
Best credit card combinations
Use these credit card combinations to boost your rewards earnings.
Tax Tips for the 2020 Filing Season
With the deadline to file extended to May 17, we asked industry experts to weigh in with their top tips.
6 retirement plan options for the self-employed
You have a handful of self-employed retirement plans to choose from. Learn more.
Startup business lines of credit
A business line of credit is a useful tool. But as a startup, you may not qualify for the best interest rates with most lenders. Explore your options — and alternatives — for flexible funding as a new business.
How to move to Canada
Explore the options and programs that Canada has in place to help you move to Canada.
Best business tax software for 2021
Compare options if you’re self-employed, a freelancer, a partner and more.
Ask an Expert