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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 card at the end is the one exception).
What Credit Cards Can You Apply for With an EIN?
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.
- Annual fee: $0 intro for first year; $95 after that
- Introductory bonus: $500 cash back for spending $4,500 in the first 3 months
- Rewards: 2% cash back on every purchase
- Annual fee: $0 intro for first year; $95 after that
- Introductory bonus: $500 cash back after spending $3,000 in the first 3 months
- Rewards: 5% cash back on up to $25,000 spent per year at office supply stores and on internet, cable and phone services; 2% cash back on up to $25,000 spent per year at gas stations and restaurants; 1% cash back on all other purchases
- Annual fee: $95
- Introductory bonus: 80,000 Ultimate Rewards points for spending $5,000 in the first 3 months
- Rewards: 3X Ultimate Rewards points per dollar on up to $150,000 spent per year on travel, shipping, online advertising, and telecom services; 1X point on all other purchases
- Annual fee: $295 (Rates & Fees)
- Introductory bonus: Up to $500 back for eligible FedEx purchases in the first 3 months
- Rewards: 4X Membership Rewards points per dollar in the two categories with the highest spend per month, up to $150,000 in combined purchases per year (categories are airfare purchased directly from airlines, U.S. advertising purchases (online, TV, radio), U.S. providers of computer hardware, software, and cloud solutions, U.S. gas stations, U.S. restaurants, and U.S. shipping)
- Annual fee: $595 (Rates & Fees)
- Introductory bonus: 50,000 Membership Rewards points for spending $10,000 in the first 3 months; 50,000 more points for spending an additional $15,000 in the first 3 months (expires 12/4/19)
- Rewards: 5X Membership Rewards points per dollar on flights and prepaid hotels booked on the American Express Travel website; 1.5X Membership Rewards points on eligible purchases of $5,000 or more (an extra .5 points per dollar, up to 1 million extra points per year);
- Perks: $200 annual airline fee credit, Amex Global Airport Lounge Collection, fee credit for Global Entry or TSA PreCheck, automatic Gold Status with Marriott Bonvoy and Hilton Honors, Platinum Global Access from WeWork, $200 Dell statement credit
- Annual fee: $0
- Rewards: 7X points per dollar on rideshare services, 4X points on flights, hotels, and Airbnb booked through Brex Travel, 3X points on restaurants, 2X points on recurring software purchases
- Introductory offer: 30,000 bonus reward points after approval and waived card fees for life
- Perks: Various credits and discounts for Amazon Web Services (AWS), Google Ads, WeWork, Salesforce, Twilio, HubSpot, ZenDesk, and more.
Unlike the other cards above, Brex doesn’t require a personal guarantee for its cards (there are two other card offers), which are designed for large corporations. That means you can apply using only an EIN.
But your business will have to meet some steep requirements before you’re approved for a Brex card, like having at least $100,000 or so in a corporate bank account or making a certain amount in sales.
According to our Brex contact, you’ll also have a much higher chance of approval if you work for a forward-thinking, high-growth company with a focus on modern technology.
What Is an EIN, and How Do You Get One?
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:
- File business taxes
- Open business bank accounts (EINs are often required, but not always)
- Streamline the business loan application process
- Establish a business credit file
- Apply for and receive business permits
- Keep your SSN private during business dealings
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 With an EIN
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.
Why Would You Apply for a Business Card With an EIN?
There are few reasons why applying for a business card using only an EIN would be necessary, but commonly cited motivations include:
- Keeping your SSN private
- Avoiding a personal guarantee in favor of company liability
- Avoiding a hard credit inquiry on your personal credit
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 cards, mentioned above.
How Do You Apply for a Business Card With an EIN?
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.
Can You Apply for a Business Credit Card Without a Hard Personal Credit Inquiry?
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:
- Use a secured business credit card: Secured business credit cards work basically the same way as secured personal cards. You provide a refundable deposit, and that usually sets the credit limit. Since there’s little risk on the lender’s part, secured business cards can be fairly easy to get, even with poor personal credit.
- Build business credit with trade lines: Credit cards are one good way to build business credit, but trade lines are also vital. If you build a solid relationship with a vendor, you may be able to establish a line of credit and request that your positive payment activity be reported to business credit bureaus (if it wouldn’t be already). Then, once you’ve built a few years of positive business credit using this type of credit line, it might be easier to qualify for business credit cards without dealing with a personal credit check (but that’s not a guarantee).
- Use your banking relationship as leverage: Banks love loyal customers, especially when they’re businesses. So if you’ve forged a long and positive relationship with a bank or credit union, particularly if it’s on a local level, you might be able to get a decent business credit card even with poor personal credit scores. Emphasis on “might.”
Why Use Business Cards?
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.
- Business cards make it easier to separate business and personal finances: Charging all of your company purchases to a business credit card can make it considerably easier to track your expenses.
- Business cards make employee spending simpler: Providing key employees with credit cards connected to your primary business credit card account can stimulate productivity while helping your business earn more rewards. Employee cards are often offered for free or for a relatively small fee.
- You can earn rewards on business-specific bonus categories: Business credit card rewards programs often offer high reward rates in categories you won’t find with personal cards, such as office supply stores, telecom services, and even online advertising purchases. These rewards may take the form of cash back, rewards points, or miles.
- Credit cards can build business credit: While the business card application process may involve your personal credit, most card issuers report positive business credit card activity to business bureaus. Tackling business expenses with a credit card and paying off the statement balance in full by the due date is a good way to flesh out your business credit history. Solid business credit scores, in turn, can lead to easier access to small business loans in higher amounts, lower interest rates on loans and credit cards, and other valuable benefits.
Choose Your Card Carefully
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.
For rates and fees of the The Business Platinum® Card from American Express, please click here.
For rates and fees of the American Express® Business Gold Card, please click here.
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