Up until a few years ago, I didn’t have a credit card for my freelance writing business.
Now, keep in mind that this means for years, any expenses I’ve incurred related to running my business (like traveling for work, buying things like a new computer/laptop, etc.) was paid for in cash, right out of my business checking account.
And for a long time, I thought: Okay, this is fine. It’ll help me make sure I have enough money to pay for the things I need in my business without overextending or leaning on anything as a crutch. Plus, since I was paying in full for these things, I wouldn’t incur any interest for paying them off slowly over time.
Why get a credit card for your freelance writing business?
A bit of background: I’m a saver. I’ve always worked hard to squirrel away 40-50% of my monthly earnings (sometimes more), so I’m very conscious about my spending. I was also raised with messaging that said, “If you’re going to have a credit card, you pay it off at the end of the month.” Essentially: Credit cards aren’t a long-term loan or a slow, monthly pay-off option: it’s a stop-gap solution for 30 days.
So in my personal life, my husband and I have always applied this thinking to the one credit card we share. It’s paid off at the end of every month, often times well before the end of the month.
The main reason we have one is for the points. Our thinking is: If we’re going to spend this money anyway and know we’ll pay it off every month without incurring any interest charges, why not get some perks in the process?
Why it took me so long to apply this mentality to my business is...well, it’s sort of beyond me at this point. I should’ve done it so much sooner.
Choosing a credit card for my freelance writing business
This year I finally got smart and opened a business credit card (I chose the Southwest Rapid Rewards card) for a couple of reasons:
I want to do more traveling in the future, and I really enjoy flying Southwest
The idea of earning a Companion Pass (so my husband can fly free) was really appealing
The sign-on bonus points were really good and allowed me to get close to what I needed to qualify for Companion Pass
You can earn 75,000 points right off the bat: 40,000 points after you spend $1,000 on purchases in the first 3 months of account opening plus another 35,000 after you spend $5,000 on purchases within your first 6 months of account opening.
There are 2X point bonuses for booking things like flights, rental cars, and hotels with the card
The annual fee is only $99
You get 3,000 anniversary points each year for doing nothing
Plus: Getting a business credit card helped solve some cash flow issues I was bumping into because of the nature of my freelance writing business.
While I always require a 50% deposit on projects and 90% of the time that’s on a Net0 payment schedule, the projects I take on are staggered throughout the month--which means payments fall at unpredictable intervals.
There are also a few corporate clients I have that can only do Net30, which means there’s a lag time between when I get paid (these are often larger sums, too.) I let it slide with them because I value the relationship and the repeat work--but again, this creates a gap where money hasn’t come in yet (and bills don’t wait.) And I’m on a salary through my LLC, so I have to pay myself every two weeks.
That’s where the business credit card was helpful. Because I could pay it off at the end of the month (instead of having to pay for all of my expenses right on the day they were due) it solved the problem of, “Do I have enough in my account today to pay myself for this two-week period?”
Again, should’ve done it sooner.
So far I’m really happy with this particular card, and I would definitely recommend it to anyone who’s looking to do more travel, specifically via Southwest.
I have a referral link that’ll earn both of us a few extra points if you decide to get one of these credit cards, but keep in mind it’s important to evaluate several different options first to figure out what’s right for you and your needs.
Just thought I’d share my experience in case anyone’s in the same boat and searching for a good option. Just remember: Pay it off in full every month (and get rewarded for things you were paying for anyway.)