How to report income on a business credit card application

When you complete the “income” part of a app, you want to give your small business or side business the best, without stretching the truth. But income can vary widely from year to year, and credit card applications often don’t state what you should or shouldn’t include when filing.

So what counts as an honest, fact-based answer? Usually, in credit card applications, issuers want to know your verifiable gross income from the previous year.

Revenue is the money your business makes from sales, services, or other activities. NerdWallet asked top small business credit card issuers – American Express, Bank of America, Capital One, Chase, Citi and Discover – what, exactly, should be reported as income on a small business credit card application. company, and the responses were similar. General themes:

It’s important to stick to the facts when reporting your annual gross business income, but don’t sell short. Gross income can include multiple sources of business income.

“Typically, income comes from the sale of business products or services, the sale of surplus equipment or goods, the sale of shares in the company and various other sources, large and small,” Nikki Dolor , senior vice president and small business. responsible for underwriting cards at Bank of America, said by e-mail.

Important note: you – for example, a limited liability company or an S corporation – to report income on a small business credit card application. You can also report income as a sole proprietor. You could be a sole proprietor, for example, if you:

If you are a , be sure to indicate this on your request when the issuer asks you about the legal structure of your business. And in the field where you add your tax ID number, fill in your social security number instead.

When reporting income on a small business credit card application, it is best that you not understand:

When your business is new, you may not have any income to speak of. And it is good to say so on your request.

In an email, Chase notes that applicants must report $ 0 in income if the business has no actual income. And Dan Arellano, vice president of small business cards at Capital One, said via email, “You should only report actual business-generated revenue on the app. “

Policies vary by issuer, but declaring a large chicken egg for income doesn’t necessarily mean your application will be rejected.

“We need both revenue and revenue in our app,” Discover explains via email. “For new businesses that have no income, we will rely on the income for decision making. “

With some issuers it might be acceptable to include sales projections here as well. When businesses are new, “typically clients will report projected income based on their business plan, projected sales, and potential contracts,” says Dolor of Bank of America.

Just be sure to keep these supporting documents handy, in case the issuer answers any questions.

NerdWallet asked major small business credit card issuers what should be included and excluded from income reported on credit card applications. Here’s how each transmitter responded.

This article was written by NerdWallet and was originally published by .


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Time your credit card application this bonus season

In late 2017, San Francisco couple Riley Adams and his wife stumbled upon comet Halley with airline credit card welcome offers. For a limited time, the card advertised a companion pass in addition to a big signup bonus.

“We knew we had to spend a lot in a specific area and wanted to try and shop around to get the best value for money for those needs,” says Adams, chartered accountant and owner of the Young and the Invested blog. . “If you plan for it, you can really offset these costs [with a sign-up bonus]. “

If you are , the bonus season from October to December is an ideal period. Your spending on Black Friday, travel and holiday meals, end-of-year charitable donations and more can easily meet a large spending requirement for a hefty signup bonus.

Here’s what you need to know about these offers.

A sign-up bonus is a one-time incentive offered by reward credit cards in addition to any outstanding cash back, points or miles on purchases. To get a bonus, you typically need to spend between $ 500 and several thousand within a certain period of time (often three months) after the card is approved.

This level of spending may not be difficult at this time of year. During the 2019 holiday season, consumers plan to spend an average of nearly $ 1,048 on items such as gifts, decorations, candy and more for themselves or their families, according to the annual survey. of the National Retail Federation.

Even if your spending isn’t entirely vacation-related, a little planning can still help you reap a windfall that you can use the following vacation season.

The Adams, for example, mapped their budget before applying for that airline credit card with the generous bonus. They met his spending requirements primarily by paying for expenses related to the work of Riley’s wife in 2017; they then put what they earn into vacation trips the following year.

“We used it throughout 2018 to visit family for the holidays – July 4th, Thanksgiving, Christmas – as well as two domestic trips for [our] own purposes and then fly to a major hub for an international flight on our first anniversary, ”Adams said.

It’s not worth spending the money you don’t have just to chase a big bonus. If you can’t pay your credit card bill in full each month, the interest charges will eat away at any rewards you accumulate.

But if you’ve saved up some vacation fund, you can treat yourself to a rich introductory credit card deal while you’re at it.

Andy Hill, host of the “Marriage, Kids and Money” podcast, plans to earn a signup bonus this holiday season with the savings he has set aside for Christmas gifts.

“We’re saving about $ 1,200 on Christmas gift shopping,” says Hill. “If we’re going to spend that $ 1,200, we might as well get a bonus on a new credit card to get cash back.”

When you review a rewards credit card and its signup bonus, ask yourself these questions:

This article was provided to The Associated Press by the NerdWallet personal finance website.


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