Open a Credit Card for LLC?

Question

We're buying our first STR (an existing one in our town) and I'm planning the interior furnishings (and making all these purchases). We have an LLC for the STR, so I'm wondering if you recommend getting a credit card for your STR business.

On the one hand, I don't want the hassle. On the other hand, I want to keep clear expenses for taxes.

What do you recommend? Any other tips I should know?

Andrew Steffens · Answer

10000% recommend getting a credit card for multiple reasons.  As you mentioned, the CC allows for better bookkeeping.  Credit cards also protect you via chargeback should you need to do on against a merchant (i.e. ordered couch comes in damage and merchant is denying replacement).  Lastly, and my favorite, are the perks of a premium credit card.  I wrote and in depth post months back about reward redemptions if you care to search it out.  Just 2 weeks ago I traveled to Europe biz class on Swiss Air outbound and Delta One in bound.  The retail price for both 2 tix came in at over $30,000.  I redeemed 260,000 points and about $500 in total tax and fees.  Even in travel is not your things, 2c cash back adds up quickly!

Collin Hays · Answer

I like credit cards for businesses. It really simplifies bookkeeping. I own three businesses, and I use Southwest Rapid Rewards cards for each of them. I haven't paid to fly anywhere in many years.

Jon Martin · Answer

You will have recurring expenses, so why not automate them and pick up some rewards along the way? Plus it keeps it all under one umbrella, so you don't have to be your own forensic accountant next spring trying to parse out what was charged to which property or business.

Nagy Wassef · Answer

Hi Hannah, I ran into the same thing a few years ago. Some LLC cards give you really good credit for opening up so for example of the Chase Inc. gave us $750 back when we spent the first $3000 I believe. Some of the long run it could save you money to get their credit card. If you choose not to or if there's no good promotions on credit card, I suggest getting the quicken app not QuickBooks but quicken. It's pretty cheap, but I will help you automate expenses or A. label them a lot more efficiently.

Kristen Ambrose · Answer

Yes, I definitely recommend getting a credit card specifically for your STR business. Since you already have an LLC, it’s smart to keep everything clean and separate. It makes taxes much easier and helps you avoid mixing personal and business expenses.

A separate credit card will make tracking and categorizing everything simple. It also helps if you're ever audited, and it makes it easier to see how your STR is performing. Plus, you’ll be spending a lot upfront on furnishings and supplies, so using a card with rewards can give you points or cashback.

It also gives you some flexibility with cash flow during the setup phase and helps build business credit if you plan to buy more properties in the future.

You should look for a card that earns rewards on things like home improvement, travel, or general spending, and ideally one with no annual fee and good expense tracking tools.

One other tip is to track big purchases like furniture separately from regular expenses like cleaning supplies. Those larger items are treated differently for taxes. Also, make sure you have a bookkeeping system in place from the start, so everything is organized as you go. Let me know if you want help setting that up.

Jake Yuskaitis · Answer

yes. always get a credit card so you can sperate expenses and capitalize on the rewards. will make your life a lot easier.

Priyanka Verma · Answer

According to the National Small Business Association, about 42% of small businesses in the US use a dedicated business credit card as a basic tool for keeping finances separate (NSBA Small Business Access to Capital Report, 2023). The IRS also reports that clear separation of personal and business expenses is one of the top things they look for if you’re ever audited. It’s an easy red flag if all your STR stuff runs through your personal card.

Plus, the average American small business puts $30,000–$50,000 per year in expenses on a business card (Federal Reserve Small Business Credit Survey, 2023). For an STR, you might easily spend $10k–$25k just setting up furniture, décor, and supplies. Putting that on a rewards card can earn you a few percent back which adds up.

It’s not required, but it’s pretty standard for STR owners who want clean bookkeeping, tax simplicity, and a little extra cashback. Just use it only for legit business expenses, pay it off each month, and you’ll be glad you did.

Kolin Goff · Answer

We opened a chase business CC for our STR LLC and it has been great  (automated payments to vendors and utilities, clear expense tracking, 0% intro APR's, points sign up bonuses, solid cash back % etc)

Obviously is goes without saying that this should be a tool only used for expenses that were planned/budgeted for as part of your business. We used the CC as a bridge loan at 0% for 12mo on some of our furnishings while we waited for another property to sell. Hope this helps!

Michael Baum · Answer

Hey @Hannah Sillars, so I am not going to buck the trend but we don't have a CC for our STR.

I do have a separate bank account with a debit card attached. We use the debit card for all expenses.

I thought about setting up a credit card, but I didn't feel it was necessary. We keep a large contingency budget in the bank so we are always covered.

We also don't have an LLC as it isn't really necessary for a single rental.

Brendan Mullenholz · Answer

Definitely get a CC for your LLC, you're going to have A LOT less hassle if you have one.  If you haven't already make sure you have a bank account dedicated to your business as well. This will keep expenses clean and your books in order.  Like everyone said, look for one with perks.

Also, since you're essentially buying a business, I would ask the current owners for a list of their expenses they use for the STR.  If you ever needed to sell it down the line it'll be more appealing to buyers especially novice ones looking to get their first one.

Open a Credit Card for LLC?

Most Popular Reply