Best Credit Cards for Freelancers: 2018

Brendan Harkness

Brendan Harkness

Updated Oct 24, 2018

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Freelancers have special needs when it comes to good financial management. Money earned must be stretched in a number of different directions. Since no employer withholds money for taxes or social security, the freelancer is responsible for paying them (usually each quarter).

Freelancers are responsible for maintaining a workspace and all equipment needed (computer, printer, software, office supplies, phone, internet service, desk, utilities and so on), and must foot the bill for any business-related travel, conference attendance, subscriptions and the like. Freelancers must be extra vigilant when it comes to selecting cost-effective financial products.

Business or Personal?

Smart freelancers seek out every advantage when it comes to taxes, and that process starts with complete separation of business and personal finances. A business credit card is not required but you may find it useful. As far as the IRS is concerned, any credit card can be designated as solely for business purchases.

In fact, business cards are not protected by the CARD act, so many solopreneurs prefer to stick with consumer cards. Both types of cards are secured with the applicant’s personal credit, and a business card does not necessarily create or build business credit.

Credit Card Features To Watch For

Desirable features vary depending on the consumer. When choosing any new credit card, the most important thing is that it offers features and benefits that complement the holder’s typical usage patterns.

Annual Fee

While some prefer fee-free credit, others find good value in cards that impose an annual fee. For someone who travels occasionally, a fee card might pay for itself after the first roundtrip in free checked baggage, WiFi and in-flight purchases.

Interest Rate

The primary goal on any credit card is always to pay it off regularly and avoid carrying a balance; the interest rate for such a user is irrelevant. That’s not always possible, however.

A cardholder who sometimes carries a balance should understand the interest rate and select the card that offers the best rate possible. Credit cards used for overdraft protection usually impose a higher interest rate on the overdraft advance.

Foreign Transaction Fee

Typically set at 3 percent, this fee adds up quickly for anyone who uses the card outside the U.S. Many cards offer free foreign transactions, and that goes for business cards as well, so there is usually no reason for a traveler to have to use a card that charges.

Other Fees

Depending on how you plan to use the card, other fees can add up. Taking advantage of a zero percent balance transfer offer typically incurs a fee of 2% or more of the amount transferred, partially negating the interest savings. Late payments can incur fees as well as potentially push the account into a higher interest rate overall.

Signup Bonus

Getting a new credit card is a great opportunity to net a signup bonus. When comparing cards, look for a reward you can use, like points that can be transferred to your preferred airline or hotel brand, or cash back.

Reward Program

The biggest difference between reward programs is that while one is perfect for Person A, another is perfect for Person B. To find the best program, match the reward opportunities to your typical spending habits.

Airline co-branded cards typically give the best rewards on travel related expenses, and so have less value for someone who travels infrequently. Some business cards stack extra rewards onto office supply spending or other business related expenses. Many consumer cards offer their heaviest rewards for groceries and gas.

Look at your own typical budget and your usual spending habits to determine what card will give the greatest payoff.

Reporting Tools

This is where business cards have an advantage over most consumer cards. Since every expense must be categorized for tax purposes, it’s nice if the credit card offers an app that handles this task for you.

Look for the ability to tag purchases and upload photos of receipts, as well as downloadable transaction data into the accounting software of your choice.

Top 3 Credit Cards for Freelancers

We're currently unable to link directly to an application for the Chase Ink Business Cash Credit Card, but you can learn more here, on our advertising partner's website.

Anyone who works from home can appreciate the 5% cash back categories offered by this card. You’ll be able to purchase most things you’ll want for a basic home office at this discount, including computers, computer accessories, office furniture, and your internet and phone services. The 2% cash back for gas and restaurants works out great if you often travel and meet for meals for work. You’ll also be able to use the Jot mobile app and all its tools to help you keep track of your business spending.

Key Features:

  • No annual fee
  • $500 cash back after spending $3,000 in the first three months
  • 0% APR for 12 months on purchases and balance transfers, then 15.24%–21.24% Variable
  • Foreign transaction fee is 3%
  • Earn 5 points per dollar on internet, cable and phone services and at office supply stores (up to a combined $25,000 per year)
  • Earn 2 points per dollar at gas stations and restaurants (up to a combined $25,000 per year)
  • Earn 1 point per dollar on all other purchases (unlimited)
  • Easy expense tracking and reporting tool, a mobile app called Jot

 

We're currently unable to link directly to an application for the Capital One® Spark® Cash for Business, but you can learn more here, on our advertising partner's website.

Unlike the previous cards, this card offers an unlimited 2% cash back on every purchase, making it a better choice for general business spending and for business that don’t make many regular purchases. It does have an annual fee, but it is waived for the first year and the $500 introductory bonus will cover the fee for 8 years after that. There are no foreign transaction fees with this card, and you’ll also get a mobile app for finance management.

Key Features:

  • Requires excellent credit
  • Annual fee is $0 the first year, then $95
  • Earn 2% cash back on every purchase
  • The signup bonus is $500 after spending $4,500 in the first three months
  • No foreign transaction fees

 

Unlike the previous 3 cards, this is a charge card, which means that you’ll need to pay off the balance completely each month. This is a high-end luxury business card for travelers that, while it has an annual fee and won’t earn you many points (2 per dollar on American Express Travel), it provides an abundance of benefits that frequent travelers will love. You’ll get complimentary access to hundreds of airport lounges, statement credits for various travel-related expenses, discounts on companion tickets, and more.

Key Features:

  • Charge card (balance must be paid in full each month)
  • Annual fee is $450
  • 2 points per dollar on the American Express Travel Website
  • Rebate of up to $200 on airline fees (checked bags, in-flight refreshments, etc.)
  • Welcome bonus is 40,000 Membership Rewards® points after spending $5,000 in the first three months
  • Free Boingo WiFi worldwide
  • Access to Centurion Lounges, Delta Sky Clubs and Airspace Lounges in airports around the world, plus enrollment in Priority Pass Select which gives access to 700 more airport lounges.
  • 24/7/365 personal concierge service

 

What credit cards do you use to fund your freelance business? What other financial strategies do you use? Let us know in the comments below!

Kimberly Rotter contributed to this post.

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