A business credit card for a freelance writer?

March 24, 2021 4:22 PM

I'm a freelance writer. For various reasons, I'm going to have a very large, out of the ordinary tax bill this year. I'm mulling over ways to deal with this.

I'm thinking of getting a new 0% introductory rate credit card and making the tax payment that way, and then paying it off before the interest kicks in. There's a fee to pay your taxes by credit card, but some cards have a "Welcome" bonus that would basically offset the fee. But here's my real question. I could get an even bigger bonus if I were to get a business credit card. I'm not sure I'd qualify, but I AM self employed. Any freelancers out there who have a business credit card? Would I have to have a really hefty income? I don't want to apply and get declined, so I'd like to know I'd have a decent shot before I apply.

posted by gigondas to Work & Money (10 answers total)

Response by poster: Also, I wouldn't use the card for anything other than paying off this tax bill.
posted by gigondas at 5:02 PM on March 24, 2021

Plenty of specialist blogs for this. I don't know about the US side if things but Amex is usually the way to go. Work out which SUB you could max out easiest and read up on the valuation of the various redemption option.
posted by turkeyphant at 5:24 PM on March 24, 2021

I'm a freelance writer who has a business card and I got it from the bank at which I have my business savings and checking accounts, which makes it easy for me to pay it from my business checking, and which had the benefit of them having had a long relationship with me. (I actually would recommend that you DO use this card for business expenses because it makes actually doing your taxes WAY easier if all your expenses are on the same card; all your potential deductions are right there on your statements.) I would actually consider discussing this with your bank. (If you don't have a dedicated business checking account, you could talk to them about that, too. I know that a lot of freelance writers don't; my situation is sort of complex, but it's been useful for me. )
posted by Countess Sandwich at 7:51 PM on March 24, 2021

Read the fine print (again) if you decide that Amex is the way to go. I got a card from them that I thought had 4% cash back on my top categories (which would have been awesome), but it turned out that not only is it Amex's top categories: Amex doesn't even count my categories at all, so it would have been 1% at best. Furthermore, Amex "cash back points" are only worth about $0.00667 in regular-people dollary-doos. (With the sign-up bonus and the annual fee, it was about a wash compared to getting plain-old 2% real-cash back from my regular card, but it was annoying to have been hoodwinked.)
posted by spacewrench at 8:26 PM on March 24, 2021

If you’re concerned about getting declined, you could do a quick check if your credit score via an account you already have; plenty of banks, card issuers, et al offer this.

Most credit card marketing will tell you the recommended credit score needed for approval, so you’ll know whether it’s worth bothering. That said, for a card with a decent balance transfer offer and other perks like a signup bonus and cash back or other rewards, you’ll need at least a “Good” FICO score (670+) or a “Very Good or Exceptional” one (740+) to get approved. Since you’ll be on the hook for paying the card off, your personal credit score is what the issuer looks at. Issuers tightened up on the 0% offers last March (both balance transfer and intro APR) and haven’t really budged much since.

More than you ever wanted to know about the current state of consumer BT offers. (Full disclosure: I edited that.) The situation for business cards is about the same.
posted by notyou at 9:24 PM on March 24, 2021 [1 favorite]

I'd also check your bank if they offer a business line of credit that carries a lesser interest rate, that's tied to your main checking account for auto-pay.
posted by kschang at 11:48 PM on March 24, 2021

Uh, just set up an installment agreement with the IRS? The interest rate is 0.25%. Here's some random information that seemed accurate to me on a quick scan.
posted by DarlingBri at 2:47 AM on March 25, 2021 [5 favorites]

Call the IRS (they have surprisingly good customer service) and say you cant pay the entire amount, and give them an amount you can afford. Yes, you can negotiate your tax liability. If they wont reduce it (it depends on how much we're talking about) you can ask to set up an interest-free payment plan instead.
posted by ananci at 8:11 AM on March 25, 2021 [2 favorites]

If your liability is under $50,000 (personal) or $25,000 (business) you can set up a payment plan online. No need to talk to an agent. You propose a monthly amount and the robot decides if that's acceptable.
posted by JoeZydeco at 8:41 AM on March 25, 2021 [1 favorite]

Good point, that's true. But you can also get a rep to override it if the robot isn't accepting your proposed amount.
posted by ananci at 8:53 AM on March 27, 2021