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Business credit and personal credit often seem like two entirely different worlds. There are different credit bureaus, credit reports, and credit scores; the cards work differently and feature different requirements; and the methods used to build each type of credit can differ significantly.
In spite of this, your personal credit will almost certainly still play a role in business lending decisions. That’s not always ideal, so some businesspeople seek ways to apply for business credit cards while keeping their personal credit entirely out of the picture.
One of the more commonly proposed solutions is to simply apply for business credit cards using only your Employer Identification Number (EIN), rather than your Social Security number (SSN). That should help keep the focus on your business, right?
Actually, that’s not usually true.
It’s easy to find credit cards you can apply for with your EIN. In fact, many major business credit card applications simply ask for a “tax identification number” (an EIN is just that) before they ever request your SSN.
But the harsh reality is that there are very few cases where business credit card issuers won’t request your SSN. Which means that you’ll seldom get a business credit card without your personal credit coming into play (but it is possible to get certain business cards without personal guarantees).
We’ll talk about why later on. But first, we’ll mention a few cards that you can at least apply for with an EIN. Just remember that doing so won’t help most business owners avoid a personal credit check or personal guarantee, and you’ll likely still have to provide your SSN before you’re approved (the Brex, Stripe, and ScaleFactor cards are exceptions).
Not sure if you’ll qualify for a business credit card? You may find that it’s easier than you think.
You don’t have to look far to find a business credit card you can apply for with an EIN. Browse business credit cards from a variety of major issuers, and most will be accompanied by an application that looks something like the one below (it’s for the Ink Business Preferred® Credit Card (Review)).
The “Tax identification number” section is where you’d put your EIN. As you can see, you have to use your SSN from the beginning if you’re a sole proprietor.
The key issue is that the ability to apply with your EIN is by no means a guarantee that you won’t have to submit to a personal credit inquiry, or that you won’t have to fork over your SSN as well.
That’s because nearly every business credit card requires a personal guarantee, which means you’re legally liable for its balance. And since that essentially makes you responsible just like any personal credit card, it’s no surprise that the issuer will want to know how you’ve handled past debts.
If you’d like to give it shot regardless, consider some of our favorite business cards, all of which offer employee cards and at least a few other basic business card benefits.
But your business will have to meet some requirements before you’re approved for a Brex card. The Brex Daily must be paired with a Brex Cash account, while the Brex 30 requires $50K in a bank account for venture-backed companies, or $100,000 if you’re not venture-backed.
The Stripe card is similar to the Brex cards. There are no personal guarantees or credit checks required, but you have to meet Stripe’s standards when it comes to payment volume, your history with Stripe, and your bank account history.
Similar to the Brex and Stripe cards, the ScaleFactor Visa has no impact on your personal credit. However, you must be a ScaleFactor customer in order to apply.
Still not sure how an EIN works? If you’re delving into the business world, it’s something you should learn about ASAP.
Employer Identification Numbers (EINs) are nine-digit tax ID numbers issued by the federal government (through the Internal Revenue Service) to employers and other individuals who meet certain criteria. According to the IRS, EINs are “used to identify the tax accounts of employers and certain others who have no employees,” but they also afford business owners certain privileges and abilities that can contribute to a business’ long-term success.
An EIN allows you to:
Applying for an EIN is free, and anyone whose “principal business, office or agency, or legal residence” is located in the U.S. or its territories can do it. All you need is a valid Taxpayer Identification Number; options include your SSN, or a past EIN. You’ll get your EIN immediately upon successful activation.
Applying for a business credit card will often require an EIN, though you’ll generally have to provide your SSN, too. The process is fairly straightforward, and it’s not terribly different than applying for a consumer credit card.
There are few reasons why applying for a business card using only an EIN would be necessary, but commonly cited motivations include:
Unfortunately, using your EIN on a business credit card application will rarely accomplish these goals.
Even if your business has a robust business credit history, there’s a very high chance that the issuer will still request your SSN and check your personal credit. In fact, for most business cards the issuer probably won’t check your business credit at all.
It’s equally likely that you’ll have to provide a personal guarantee, because they serve as a valuable line of defense for credit card companies. A few notable exceptions there are the Brex and Stripe cards, mentioned above.
We reached out to Amex and Capital One’s business support teams, and they both confirmed that all business credit card applicants must submit to a personal credit inquiry and provide a personal guarantee. There’s no way to avoid it, no matter how rich your business credit history. We can’t guarantee that’s the case with other issuers, but with few exceptions, it’s probably safe to assume it is until you check.
When you apply for a business credit card, you’re required to provide much of the same basic personal information you would for a consumer card. The key distinction is that you’ll also have to provide certain information related to your business. This generally includes your business name, the role of your business, its contact information, and revenue information, among other things.
You’ll also have to provide a Tax Identification Number, and that’s where your EIN comes into play.
EINs and SSNs are both classified as Tax Identification Numbers, and while the majority of business credit card applications will probably require you to provide both, certain cards (like the aforementioned Brex card) allow you to apply with just your EIN.
Sole proprietorships will often have to provide an SSN up front, as we mentioned earlier.
In some cases, you may be able to apply using different information if you call the issuer’s application line to speak with a rep. So if you don’t see the options you want it’s worth giving them a call.
Personal credit inquiries can throw a wrench into the business card application process.
Poor personal credit could decrease your likelihood for approval despite your business being perfectly capable of repaying its debts.
And even if that’s not a concern, hard inquiries can have a negative impact on your personal credit scores, though it’s generally temporary and minor.
There aren’t many cards that don’t require personal credit checks and guarantees, and they typically require that you represent a large and profitable corporation.
The good news? There are ways to get business credit cards even with poor personal credit (though an inquiry may still take place).
Here are your options:
If you’re still new to the world of business credit, you may have a basic idea of why business credit cards are so helpful. But even so, all small business owners should understand exactly why they’re so important in today’s business landscape.
Think you’re ready for a new business card? Whether or not you’re using your EIN in the process, you’ll want to make sure the card complements your business spending.
The best business credit cards will provide rewards categories that make sense for your spending habits, and enough overall value (by way of both rewards and benefits) to justify the annual fee some cards require.
For added value, keep an eye out for business cards with big signup bonuses, which often provide more bonus points than their personal counterparts, as well as 0% intro APR offers for balance transfers, purchases, or both.
Expecting to do business around the world or make purchases in foreign currency? You’ll also want to look for strong travel rewards cards with no foreign transaction fees.
Attention freelancers! Did you know that you likely qualify for business credit cards? Check out our picks for the best freelance credit cards, which include both business and personal cards that you might find useful.
For rates and fees of The Business Platinum Card® from American Express, please click here.
For rates and fees of the American Express® Business Gold Card, please click here.
Most business credit card applications require your SSN and EIN. Some cards, which often have stringent standards, let you apply without an SSN.
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The information related to Capital One® Spark® Cash for Business, American Express® Business Gold Card, and The Business Platinum Card® from American Express have been collected by Credit Card Insider and have not been reviewed or provided by the issuer or provider of these products.
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