For small business owners, getting a credit card with favorable terms and rewards is essential for efficient financial management, cash flow, and building business credit.
Unfortunately, many entrepreneurs may face difficulties getting approved for business credit cards, especially when they are just starting up, have low credit scores, or limited collateral.
However, if you have obtained an Employer Identification Number (EIN) from the IRS, you may have a higher chance of securing a business credit card with more favorable terms and without personal guarantees.
In this article, we will guide you through the process of how to get a business credit card with an EIN only.
What Is an EIN?
Before we dive into the details of how to apply for a credit card with an EIN for business purposes, let’s first understand what an EIN is.
An EIN is a unique nine-digit number assigned by the IRS to identify your business entity for tax and legal purposes.
It is also known as a federal tax ID number, and it is like a social security number for your business. You need an EIN to file business taxes, open a business bank account, hire employees, and apply for business licenses and permits.
Obtaining an EIN is free and easy, and you can do it online, by phone, by fax, or by mail.
Why Get a Business Credit Card with an EIN Only?
You may wonder why getting a business credit card with an EIN only is beneficial compared to using personal credit cards or applying for a credit card with a personal guarantee.
Here are a few advantages of using a credit card for business with an EIN:
Build business credit
By using a business credit card with an EIN and making timely payments, you can establish and improve your business credit score, which is separate from your personal credit score.
A good business credit score can help you qualify for better loan terms, insurance rates, and vendor contracts, as well as signal your creditworthiness to potential investors.
Separate business and personal expenses
It is important to keep your business and personal finances separate for legal and tax purposes.
Using a credit card for business use with an EIN can help you track and categorize your business expenses more easily and accurately, avoiding confusion and hassle during tax season.
Higher credit limit
Credit cards for business with an EIN only may offer higher credit limits than personal credit cards or business credit cards with personal guarantees, which can help you cover larger expenses and invest in growth opportunities.
Rewards and perks
Many credit cards with an EIN only offer rewards, cashback, and other benefits that can help you save money and earn incentives for spending in certain categories, such as travel, marketing, office supplies, and more for your business.
How to Get a Business Credit Card with an EIN Only
Now that you understand the benefits of using a business credit card with an EIN, let’s explore the step-by-step process of how to apply for one.
Step 1: Research Business Credit Card Options
The first step in getting a credit card for your business with an EIN only is to find the right credit card that suits your business needs and goals.
You can start by researching various credit card options for business use available from different issuers, such as banks, credit unions, and online lenders. Some factors you may want to consider in your search include:
The interest rate, or annual percentage rate (APR), determines how much you will pay annually on your credit card balance.
Look for a business credit card with a low interest rate if you plan to carry a balance, or a 0% introductory APR period if you want to transfer a balance or make large purchases without interest for a certain period.
Different credit cards may have different types and amounts of fees, such as annual fees, balance transfer fees, cash advance fees, foreign transaction fees, and penalty fees for late payments or exceeding credit limits.
Make sure to check the fine print and compare the fees of each credit card to avoid surprises and unnecessary costs.
Rewards and benefits
Depending on your business spending habits and preferences, you may want to choose a business credit card that offers rewards or benefits in the categories that matter to you.
Some common rewards programs include cashback, travel rewards, points, miles, or discounts on specific business expenses, such as office supplies, advertising, gas, or dining.
Some credit cards also offer extra perks, such as extended warranties, purchase protection, travel insurance, and concierge services.
While obtaining a business credit card with an EIN only may increase your chances of approval, you still need to have a good credit history and score to qualify for certain credit cards.
Most business credit cards require a FICO score of at least 670 or higher, but some may accept lower scores or cater to businesses with no credit history.
Some popular credit cards for business with EIN only options include the Capital One Spark Cash for Business, American Express Business Gold Card, and Chase Ink Business Preferred.
Step 2: Prepare Your Business for the Credit Card Application
Once you have identified the business credit card you want to apply for, you need to make sure that your business is ready for the application process.
Here are some tips:
Check your credit report
Before you apply for a business credit card with an EIN only, review your business credit report to make sure there are no errors, inaccuracies, or fraudulent activities that may hurt your credit score or affect your approval chances.
You can get a free copy of your business credit report from one of the major credit bureaus, such as Experian, Equifax, or Dun & Bradstreet.
Build credit history
If your business has no credit history or a limited credit history, you may want to consider building credit by using a business credit card with a low limit, paying your bills on time, and applying for small loans or lines of credit.
You can also ask your vendors or suppliers to report your payments to the credit bureaus to help establish your creditworthiness.
Organize your finances
Make sure your business financial records are up-to-date, organized, and accurate. You may need to provide your tax returns, bank statements, profit and loss statements, balance sheets, and other financial documents to the credit card issuer as part of the application process.
Create a business plan
Having a solid business plan can help you showcase your vision, mission, strategies, and goals to the credit card issuer and demonstrate your ability to manage financial resources responsibly.
A business plan should include information about your target market, competition, industry trends, products or services, marketing and sales plans, and financial projections.
Step 3: Apply for a Business Credit Card with an EIN Only
After you have done your homework and prepared your business for the credit card application, it is time to fill out the application form.
Here are the general steps you need to follow:
Go to the credit card issuer’s website or visit a branch to start the application process. Make sure you select the option for a credit card with an EIN only, and provide your EIN on the application form.
Fill out the application form accurately and completely, including your business name, legal structure, address, phone number, tax ID number, financial information, and contact information.
You may also need to provide your Social Security Number (SSN) for identification and personal guarantee purposes, depending on the credit card issuer’s policy.
Read the terms and conditions carefully, and make sure you understand the interest rate, fees, rewards, benefits, and other important details of the credit card.
If you have any questions or concerns, contact the credit card issuer’s customer service or sales representative.
Submit the application form and wait for a response from the credit card issuer. Depending on the credit card issuer’s policy and your creditworthiness, you may get an instant approval, a conditional approval pending further review, or a rejection.
If you are approved, congratulations! You should receive your new credit card in the mail within a few business days.
Pro Tips for Getting a Business Credit Card with an EIN Only
While getting a business credit card with an EIN only can be a smart move for your business finances, it is not always a guaranteed success.
Here are some pro tips to increase your chances of getting approved and enjoying the best credit card terms:
Build a strong credit profile
In addition to using a business credit card with an EIN and making timely payments, you can boost your credit score and reputation by paying your bills on time, keeping your credit utilization low, and disputing any errors or inaccuracies on your credit report as soon as possible.
Apply with multiple issuers
Just like with personal credit cards, you may want to apply with several credit card issuers simultaneously to shop for the best options and diversify your credit portfolio.
However, don’t apply for too many credit cards within a short period, as this may hurt your credit score and signal desperation or overspending.
Negotiate the terms
If you get approved for a credit card but are not happy with the interest rate, fees, or rewards, you can try to negotiate with the credit card issuer to improve the terms.
For example, you can ask for a lower interest rate or waive the annual fee in exchange for a higher credit limit or longer payment terms.
Q: Can I get a business credit card with no personal guarantee?
A: Yes, some business credit cards may allow you to apply with no personal guarantee, but this may require a good business credit score, strong financials, and a proven track record of paying your bills on time.
Q: What credit score do I need to get a business credit card with an EIN only?
A: While there is no set credit score requirement for business credit cards with an EIN only, most issuers prefer businesses with a FICO score of 670 or higher. However, some issuers may accept lower scores or cater to businesses with no credit history.
Q: How long does it take to get approved for a business credit card with an EIN only?
A: The approval time for a business credit card with an EIN only may vary depending on the credit card issuer’s policy, your creditworthiness, and the completeness of your application.
Some issuers may offer instant approval, while others may take a few days or weeks to review your application.
You can speed up the process by providing accurate and up-to-date information, preparing your business financial documents in advance, and following up with the credit card issuer if necessary.
Getting a business credit card with an EIN only can be a great way to manage your business finances more effectively, earn rewards and benefits, and build business credit.
By following our step-by-step guide and pro tips, you can improve your chances of getting approved and enjoying the best credit card terms for your business.
Remember to use your credit card responsibly, stay within your budget, and pay your bills on time to maximize the benefits and avoid debt.