ICBA Blog

Banks and Credit Card Features Designed for Independent Contractors

Check for these three must-have features in your financial products. Plus, where to find them now

The average checking account and credit and debit cards might get you by as an independent contractor. But if you want your financial life to operate like clockwork, you’ll need some bells and whistles with your banking tools. Here are three features that will help you manage your money with aplomb.

Find a bank with robust business checking options

As an independent contractor, you’re running your own business. It doesn’t matter if you’re a website developer working from a home nook, a seller operating out of a local boutique, or a rideshare driver managing things from the driver’s seat. Either way, you’re still a small biz, and you should have business checking to keep your personal and operational finances separate. This is also a good strategy to make tax prep and filing easier.

The type of work you do may determine the best style of banking to fit your needs. For example, if you regularly deposit cash, you’ll require access to a brick-and-mortar bank. But if you can do all your banking online, a mobile-first choice will work well because of fewer fees.

For brick-and-mortar options or if you prefer a big bank, check out the business checking options at Chase. Chase has three tiers of business checking choices to fit your needs. Monthly fees are waived if you link a Chase business savings account. (Having a business savings account is a great way to set aside cash for estimated tax payments.) Chase accounts generally integrate seamlessly with most payment processing or accounting software systems.

If you’re able to do all of your banking online with no need for cash deposits, you can set up an Azlo business checking account. Azlo has zero of the monthly fees you typically find with brick-and-mortar banks, and Azlo integrates with payment processing systems like Square or Stripe. If you don’t want to use a separate invoicing system, Azlo even allows you to invoice directly from your account.

A business credit card with an expense tracking and tagging system

Just as with your checking account, you want a dedicated business credit card so that you can keep business and personal charges separate. But beyond that, one major reason for opening a business credit card is that any interest you accrue and pay on business charges can be deducted as a business expense, which can help lessen your tax burden, according to NerdWallet.

You might link your business accounts to your accounting system to track your expenses, but another way to categorize expenses for tax purposes is to use a credit card with built-in categorizing and tagging. These options can also help you track spending for each month, quarter, or year and view it at a glance in your account. The various American Express Business card options have this feature. You can export a spreadsheet whenever you want to do a deep dive into your expenses.

If you are a QuickBooks user, as well, you’ll also appreciate Amex’s Spend Manager app and its integration with the software. If you get a receipt when you’re out and about, you can snap a photo of it with the app and add any necessary notes for accounting purposes. That way, when the charge syncs with your QuickBooks account, it will automatically be categorized. You won’t have to do that later manually.

A business credit card with points or cash back

Put your business expenses to work for you in the form of automatic cash back on purchases or as credit card points you can redeem for rewards. Several cards will help you maximize your spending.

Part of choosing a rewards card involves understanding what type of business expenses you incur the most. If, for example, you pay to advertise your services on social media or spend a lot on shipping, the Chase Ink Business Preferred Card is a good choice. You’ll earn 3X points on those specific purchases up to a certain dollar amount.

You can also accrue a generous point balance via cards that offer a sign-up bonus. American Express Business cards come with different offers. An offer often works like this: You’ll earn X amount of points if you spend X amount of dollars in X amount of time (like in the first three months of having the card). Use the points for a much-needed vacation or a large purchase for your home. Or just keep banking them.

If you’re not a points person and prefer cash, you can automate the 2% cash-back offer on a card like Capital One Spark Cash for Business card. That way, you never have to think about how and when to redeem.