Business credit cards can be an excellent tool as a business owner. In addition to allowing you to purchase essential items for your business, you can also keep your business expenses and personal finances separate. As a business owner, this is vital for your financial and tax records.
However, when applying for a business credit card, you’ll often be asked to supply your SSN (Social Security Number) as well as your EIN (Employer Identification Number). But what do you do if your credit rating is poor or non-existent?
In this article, we’ll explore the different options if you only have an EIN, or are unable to use your SSN to apply for a business credit card.
What is an EIN?
An EIN, also known as the Federal Employer Identification Number, is a 9-digit number assigned by the Internal Revenue Service (IRS) to businesses in the US. It’s similar to a Social Security Number (SSN), but the difference is that it’s meant to be used for business-related items only.
If you’re a business owner, you’ll need an EIN to open a business bank account, apply for licenses, and file your returns. If you have employees or operate as a corporation or partnership, you’ll need an EIN.
It’s a good idea to apply for it early after starting your business. Once you’ve been assigned an EIN, the number will never change.
If you lose it, you should be able to find it on your business paperwork (such as previous tax returns). However, if in doubt, you can always call the IRS to double-check.
EINs additionally help protect against identity theft and fraud, as they aren’t personally connected to you but to your business. If you’re a sole proprietor, you aren’t required to have an EIN- but you may still want to apply for one.
Can You Get a Business Credit Card with an EIN Only?
When applying for a business credit card, some issuers will ask for your SSN as well as your EIN so that they can access your personal credit profile.
They then use this information to assess whether or not you’d be a good candidate for the card you’re applying for, and as a personal guarantee. Most require you to have good to excellent personal credit, with a FICO score of 690 minimum.
The card issuer will use your SSN to run a personal credit check to determine your level of risk as a potential new cardholder, especially if your business is new or has zero or minimal credit history.
Depending on your personal credit history, this may also affect the offered credit limit and APR on your new card.
If your business fails, the card issuer will be able to get you to repay your balance on the card. If they have your SSN on file, you will be personally liable for any repayments.
You should be aware that some business credit card issuers who require your SSN report payments on these cards to personal credit agencies. This means that if you don’t manage to make your payments on time, or are irresponsible with your card, it could affect your personal credit rating.
How to Apply for a Business Credit Card Without an SSN
If you have poor personal credit history or a low rating, then you may want to try to apply without your SSN and using your EIN only. However, not many card issuers will allow this, and it will very likely be more difficult to be approved for a business credit card.
If you try to apply for a business credit card without an SSN, you’ll be required to fill out a large amount of paperwork and jump through hoops. Even then, it may be hard to find a business card issuer who will approve a card without your SSN.
Some cards, such as corporate credit cards, don’t require a personal guarantee. However, corporate credit cards are not the same as small business credit cards, and may not suit your needs.
In addition, corporate credit cards often require you to have annual revenue in the millions, as well as a high number of users of the account. You’ll also need to have a particular business structure in order to apply, which small businesses and sole proprietors often do not have.
Benefits of Applying for a Business Credit with Only an EIN
Considering how difficult it is to apply for a business credit card without a SSN, why would you want to apply with just an EIN?
Well, there are a few important benefits:
- Build business credit, as well as earn card-specific rewards and benefits
- You won’t be personally liable if your business is unable to pay
- Personal credit score won’t affect your eligibility for a business credit card
- It’s easier to keep your business and personal finances separate
- You can apply for a business credit card without a Social Security Number. This is particularly applicable to those who aren’t US Residents
Types of Business Credit Cards That Only Require an EIN
As mentioned, most business credit card issuers will not offer cards without your SSN, however, there are a few possible options.
Corporate Business Cards
If you have a business with millions of dollars of revenue and a specific business structure, you may be eligible for a corporate business credit card. With corporate business credit cards, you can apply using only an EIN- but you’ll need to have good business credit (amongst other things).
You should be aware that small businesses and sole proprietors often struggle to meet the threshold limits for corporate cards.
The benefit of having a corporate business credit card, if eligible, is that the company is liable, not the individual. On the other hand, as there is no individual associated with the account, all rewards and card perks go to the business.
Corporate business credit cards also have more in-depth reporting, allowing the business to access analytics and tools which show how the cards are being used. They can set limits for each card in order to track spending.
Corporate Store Cards
If you’re a regular at a particular store for your business, a corporate store card could be a good option. Some of these don’t require personal liability, meaning you can just use your EIN to apply for it.
Additionally, you may be able to cash in various rewards and benefits, such as discounts, cash-back, and points.
Corporate Gas Cards
Corporate gas cards, or fleet fuel cards, can be helpful for those who need to fill their vehicle often. Some will only require an EIN, which could be useful for your business.
However, like corporate business credit cards, it does require good business credit in order to be approved. There is also more in-depth reporting, and you can give multiple cards to employees- as well as set fuel and (in some cases) location limits.
Bear in mind, however, that corporate gas cards cannot be used for business purchases that do not include fuel (and occasionally, vehicle maintenance purchases). It’s also important to note that most corporate gas cards only work at specific brands, meaning that you will have limited use of them.
Business Credit Cards Without a Personal Guarantee
Some traditional business credit cards do not require an SSN when applying, and you’ll be able to apply with an EIN only.
Do your research well as all business credit card applications are different, and the decision will ultimately come down to the individual card issuer.
Some alternative cards will also accept an Individual Taxpayer Identification Number (ITIN) instead of your SSN. This is also issued by the IRS and will allow you to build your business credit rating.
Prepaid Business Cards
Prepaid business cards can be applied for with just an EIN and, because they’re low-risk, do not require your SSN in order to be approved.
Any credit that you load onto the card can be used for purchases. Once this runs out, you simply reload it with more!
In certain circumstances where you are unable to use cash but are not eligible for a business credit card, a prepaid business card could be a good option. Examples of this include booking travel, or ordering various supplies online.
However, prepaid business cards do not report payments to credit bureaus, as you are funding the credit yourself. Therefore, they will not be able to help your business credit score.
Prepaid business cards can still be a good option if you are ineligible for a corporate credit card, and don’t want to (or are unable to) supply your SSN for a traditional business credit card.
Alternatives to Getting a Business Credit Card with Just an EIN
If you’ve looked into it and your circumstances or business mean that applying for one of the above options with only an EIN are out of the question, that doesn’t mean you’re at a total loss. There are other options you can utilize.
If You Have Bad Credit:
- Apply for a secured business card. When applying for a secured business card, you may only be required to share your EIN. When you’re approved, you simply put down a deposit, which then acts as your credit limit. If you eventually decide to close this card, you receive your deposit back. Secured business credit cards are easier to be approved for and have the bonus of being able to improve your business credit over time, as long as you use it responsibly. Eventually, you may even be able to upgrade to an unsecured card.
- Apply for a secured personal card. While you will need to supply your SSN for a secured personal card, if you have bad credit and have been unable to apply for a business credit card, this could be a good option for you. Secured personal cards work in the same way as a secured business card. You put down a deposit, which then acts as your credit limit, and eventually when you close the card you receive your deposit back. The benefit of a secured personal card is that you can build your personal credit score. Eventually, you may be able to upgrade to a better card, or become eligible to apply for a business credit card. On the other hand, a secured personal card will not affect your business credit rating.
Bear in mind that with both of these options it’s very important that you keep up repayments and make sure they’re on time, or it could negatively affect your personal or business credit rating.
If your main purpose in applying for a business credit card is to separate your business and personal finances, then there is another alternative to the above:
- Apply for a traditional business card that does not report to the credit bureaus. Certain business credit cards will only report to the credit bureaus if you have issues such as late payments. However, the card issuer will still likely require your SSN, which will start a hard credit inquiry on your personal credit rating. You may also need to sign a contract and be personally liable.
Be sure to read the terms and conditions of any card agreement carefully before signing on the dotted line. If you don’t, you may face unwanted and unexpected charges and responsibilities!
No matter what credit card you end up going for, be sure to use it responsibly and only apply for credit you really need. If you apply, and keep being rejected for various cards, this will negatively impact your credit rating.
Frequently Asked Questions
What is the easiest business credit card to get?
Any secured business credit card will be the easiest to be approved for, as they don’t typically require good or excellent credit in order to be approved.
Does applying for an EIN affect your credit score?
No, applying for an EIN will not affect your credit score. An EIN itself is simply a way for the IRS to identify you.
Do you need an EIN to get approved for a business credit card?
No, you don’t necessarily need an EIN to be approved for a business credit card. You can be approved just by signing up with your SSN, but you should be aware that this will open a hard line of inquiry into your personal credit history.
What is needed to qualify for a business credit card?
You’ll need to be a business owner and provide various information about your business. This may include your annual business revenue, number of employees, and how long you’ve been running your business.
You’ll also need to provide various personal information, such as your name, address, birthdate, total gross annual income, and SSN.
Can an EIN help you build business credit?
Having an EIN itself won’t help you build business credit, but it is a step towards doing so.
When you apply for business credit, you’ll need your EIN. As long as you are then using your business card responsibly and managing your repayments in a timely fashion, this can help you build business credit.
Should you apply for a business card with your SSN?
If you apply for a business card with your SSN, this will link your personal and business finances together- which you may not want to do.
It may also affect your personal credit score, depending on how responsible you are with your business card. However, if you are a small business or sole proprietor, this may be the only way to get a business card.
Is there a downside to getting an EIN?
There are no downsides to obtaining an EIN even if you never end up using it, as there are no negative repercussions. Your EIN will always be tied to your business- not to you- and is simply used by the IRS for identification purposes.