If you're a sole trader, self-employed or a freelancer, a credit card can help you deal with those months when you have expenses to pay but not much money coming in.
If you’re self-employed, a credit card can help you better manage your expenses. Use our table below to find the cards you’re eligible for, based on card type.
Table: sorted by representative APR, promoted deals first
To make comparing even easier we came up with the Finder Score. Costs, perks and suitability across 120+ cards are all weighted and scaled to produce a score out of 10. The higher the score the better the card – simple.
To make comparing even easier we came up with the Finder Score. Costs, perks and suitability across 120+ cards are all weighted and scaled to produce a score out of 10. The higher the score the better the card – simple.
To make comparing even easier we came up with the Finder Score. Costs, perks and suitability across 120+ cards are all weighted and scaled to produce a score out of 10. The higher the score the better the card – simple.
To make comparing even easier we came up with the Finder Score. Costs, perks and suitability across 120+ cards are all weighted and scaled to produce a score out of 10. The higher the score the better the card – simple.
Yes, and being self-employed in itself won’t necessarily impact your chances of being approved for a credit card. If you’ve been in business for a while, have a regular cashflow and a good credit score, you’ll probably be eligible to apply for most credit cards on the market.
However, working for yourself normally means irregular earnings and a lack of stability – two things lenders usually aren’t a big fan of. That means that your first credit card could be harder to land, especially if you’ve only been working for yourself for a short time.
The good news is, almost all card issuers now offer an eligibility checker, so you can find out your chances of getting approved before you apply (and without hurting your credit score). You may find that you stand a good chance of getting approved for the card(s) that you’re after, but that you’re offered a different rate to the advertised representative APR – which card issuers are only obliged to award to 51% of their customers.
You should do all you can to look improve your credit score and be even more careful with providing accurate information and documents to prove how much money you make (and how much you can realistically afford to borrow).
Credit card jargon explained
APR. The annual percentage rate (APR) is designed to be a benchmark for consumers, providing an annual summary of the cost of your card. As well as the interest, the APR also takes into account any compulsory charges – like an account fee (if there is one). However, crucially, providers only have to award the advertised APR to 51% of those who take out the credit card – the other 49% could be offered a different (higher) rate, at the provider’s discretion. That’s why it’s often referred to as the representative APR.
Credit card balance. This refers to the amount of credit you have currently used, and need to repay. Most credit cards have a monthly balance cycle, which means you’ll be charged interest if you don’t pay off your balance each month.
Interest rate.This is a percentage amount that you’re charged on any outstanding card balance, and can be either a fixed or variable rate.
Is getting a credit card a good idea if I’m self-employed?
Being self-employed requires a series of impressive skills – one of which is a very solid ability to manage and organise your finances, right down to the last penny.
When it comes to business expenses, there’s clearly an advantage to using a dedicated card on a dedicated account – which will make your accounting much easier than if you were to mix your personal and business expenses. And opting for a credit card can boost your spending power and potentially even earn you some rewards along the way.
How can I boost my chances of getting approved for a credit card as a self-employed individual?
Unfortunately, there’s no secret recipe that gets self-employed people (or anyone else, for that matter) approved for a credit card. But there are some good practices you should follow:
Check your credit score and try to improve it. The three main credit reference agencies in the UK – Experian, Equifax and TransUnion – all let you see your credit score for free, although they’ll charge for full credit reports. It’s a good idea to learn your credit situation. Some providers will tell you which kind of credit rating a card requires, so your credit score can help you narrow your search. Also, if your credit score turns out lower than you expected, you can then purchase the full report, check it for mistakes and get in touch with the agency to correct them.
Compare credit cards accordingly. If your credit score isn’t perfect, there’s no point in applying for a card that requires an excellent rating. Be realistic.
Use an eligibility checker. Most credit card issuers offer a service that tells you how likely your application is to be accepted before you actually apply. Use it – it won’t harm your credit score.
Don’t apply for many credit cards in a short period of time. Multiple applications could give lenders the impression you’re in desperate need of credit, plus it could hurt your credit score. If you’ve been refused once, take your time to regroup and do your research before applying for a different card.
This is what you can do in the short term, that is, if you need a credit card right now.
However, being self-employed, it’s also a good idea to plan for the long term. If you don’t necessarily need credit right now, but have no credit history in the UK, keep in mind that you’ll probably need it at some point, maybe in the form of a mortgage for your house or a loan to refurbish your office.
So give yourself an early start, for example, by getting a credit card for people with limited/bad credit. Only use a small portion of your credit limit and pay off your credit card bill in full every month. Most cards on the market won’t charge you a penny of interest provided you clear your balance each month. By the time you actually need money, your good credit score will hopefully allow you to get a competitive card or loan without too many difficulties, even if you’re a freelancer.
Will it cost me more because I’m self-employed?
It might. Don’t forget that the APR (annual percentage rate) you see on lenders’ websites is representative. That means that at least 51% of the people who get that credit card will get that interest rate, not that everyone will get it. You may be offered a higher interest rate if your irregular earnings make you look like a risky lender. Credit limits (that’s the maximum you’ll be able to borrow using the card) are also tailored to the individual. If you’re just starting out, you might be offered a relatively low limit initially.
However, this doesn’t automatically translate to a higher cost. With almost all credit cards, when the bill is paid off in full every month, the interest rate isn’t really an issue, because it won’t be charged. If you do that and also pick a credit card that doesn’t charge an annual fee, the whole thing could come in at no cost to you.
Credit card cost comparison
Credit card limit: £2,000
Outstanding balance: £1,000
Interest rate: 19.9%
Monthly repayment: £25
Total interest: £555
Credit card limit: £2,000
Outstanding balance: £1,000
Interest rate: 29.3%
Monthly repayment: £25
Total interest: £1,345
My application has been refused. What are the alternatives?
Like we said, don’t panic, and regroup instead of applying for another card straight away. Here are a bunch of alternative products you might be interested in:
A credit builder credit card. These have a higher APR, lower credit limits and no annual fees, and are specifically meant to help people build their credit score. Learn more about them and compare deals on our dedicated page.
A credit-building tool. Although these won’t help if you need credit immediately, services like LOQBOX allow you to put aside money and improve your credit score at the same time, which can be a good bet in the long term. Our LOQBOX review explains how it all works.
Bottom line
Don’t be fooled into thinking that it’s impossible to get a credit card just because you’re self-employed or a freelancer. On the contrary, if you’ve been your own boss for at least two years, have regular money coming in and a decent credit rating, you may find you can take your pick from what’s out there.
However, if you’ve only just started working for yourself and your credit rating could be better, lenders might be a little more cautious of you.
Check your credit rating and look for ways of improving it. Then make full use of the eligibility checker that many credit card companies will offer. You’ll be able to get instant decisions, which shouldn’t harm your credit rating further.
Make sure you check the lenders eligibility criteria before you apply. Some credit card providers exclude those who are sole traders, freelancers and self-employed.
Frequently asked questions
It’s unlikely to make much difference. If you’re self-employed, you may be registered as a sole trader, which means that from a legal point of view, you and your business are the same entity. While managing your business finances on another account is certainly a good idea from an organisational point of view, your business credit will show on your personal credit report. If your business is registered as a limited company instead, it will have its own separate credit file.
Apart from credit builder credit cards, that can help you if you don’t have much of a credit history yet, it really depends on what your work looks like and what your needs are. If you have lots of expenses, you may want to look at rewards credit cards that will earn you cashback, air miles or loyalty points whenever you make purchases.
Business cards typically come with features like the option to have a large number of additional cards and to manage them individually from one central platform, but they also often come with annual fees or higher interest rates. Additionally, business card transactions are not covered by the Consumer Credit Act. It’s often easier to simply opt for a personal card. But if you do like to keep your business spending in a separate pot from your personal spending, a business card or personal card just for business use, could be a good option for you.
We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you. Most of the data in Finder's comparison tables is provided by Defaqto. In other cases, Finder has sourced data directly from providers.
Tom Stelzer is a writer for Finder specialising in personal finance, including loans and credit, as well as small business and business loans. He has previously worked as a freelance writer covering entertainment, culture and football for publications like FourFourTwo and Man of Many. He has a Master of Media Arts and Production and Bachelor of Communications in Journalism from the University of Technology Sydney.
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Finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which Finder receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. Finder compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
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