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Find the right credit card for freelancers.

Credit cards are an excellent means of payment for freelancers. They are suitable for uncomplicated payment of all kinds of bills. A simple list of (operating) expenses for the tax office can also be drawn up using the statements. Which credit card is the right one for a freelancer?

General rule: separate professional and private

General rule: separate professional and private

Many freelancers use a credit card for their work and personal life. However, this is not favorable for two reasons . On the one hand, the credit card costs cannot be deducted from the tax at all or at most only partially. On the other hand , it makes tax allocation more difficult, which acquisition was intended for private life and which was intended for freelance work.

As an example: When the tax return is drawn up in spring, many freelancers can no longer remember whether the light bulbs paid for with the credit card were intended for the office or the living room.

Therefore: one credit card for private life and another for freelance work. By the way, various providers offer suitable “business offers”: You will receive a VISA and a Mastercard.

Skip the credit hurdle

Skip the credit hurdle

Most banks are sometimes rather defensive when it comes to issuing credit cards to freelancers. Proof of creditworthiness (= evidence of credit repayment ability) is required, which new entrants in particular cannot offer. The banks traditionally require current business evaluations (BWA), profit and loss accounts and income tax returns. If you cannot offer anything, you will not receive a card.

However, there are exceptions: prepaid credit cards are still issued, for example. The bank does not grant a loan here. Instead, credit must be topped up. The creditworthiness is irrelevant. Another variant is a card with a limited credit line – for example 3000 USD. The framework can be raised after it has been shown that the freelancer pays his credit card debt regularly. As long as the framework is small enough, the banks issue such cards even in the absence of proof of creditworthiness.

Prepaid or full credit card for a freelancer?

Prepaid or full credit card for a freelancer?

A prepaid credit card would actually be better for you as a freelancer for full cost control. In everyday life, however, this does not prove to be practical. Simply loading the credit usually takes one working day. Purchases that must be made immediately cannot be paid for. There is also the risk that you will forget to top up your card and, for example, you will not be able to pay for the gasoline you need to go to the customer appointment at the petrol station.

A full credit card is therefore essential for freelancers. If you can get a card without a fixed frame, it is advisable to accept it.
Practice has shown that in many cases your customers will not pay the bills as quickly as they would like. If you can continue to pay with your credit card in such shortages, this is an advantage. If you are only working part-time as a freelancer, a credit line of 3000 to 5000 USD is usually suitable.

Do freelancers need additional credit card services?

Do freelancers need additional credit card services?

Credit cards can offer various additional services – from free cash withdrawals at home and abroad to numerous insurance policies. Traditionally, different travel insurances (cancellation, luggage, etc.) are offered.

If you work as a freelancer in the office , almost all additional services are of no interest to you. Only the bonus programs, with which you can secure different premiums (material prizes, financial discounts), are of interest. However, these automatically apply to most offers.

The situation is different if you travel a lot as a freelancer : If you drive your own car, cards that offer a free towing service (ideally at home and abroad) are highly recommended. In Germany, for example, such cards are issued in cooperation with the Lite lender.

However, if you travel by train or fly, you will need baggage insurance and a corresponding policy, which if necessary will accommodate you in the hotel, should your connection fail. Appropriate insurance policies are also provided with some credit cards

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