If you’re an entrepreneur who’s been turned down for a business credit card, don’t give up hope. You can still get a great credit card deal even without a Social Security number. All you need is an EIN (Employer Identification Number).
In this blog post, we’ll teach you everything you need to know about getting a business credit card with only an EIN. We’ll discuss the different types of cards available and list some of the best deals currently on the market.
What Is an Employer Identification Number (EIN)?
An EIN is essentially a tax ID nine-digit number given to sole proprietors, partnerships, LLCs, and corporations by the IRS. It’s used to identify a business for tax purposes, similar to a Social Security number.
Any business owner can apply for an EIN with the IRS online as long as they are located in the US. To apply for an EIN, the applicant must provide a Social Security number but once approved, you’ll only have to give your EIN for credit or loan applications.
Typically, corporate cards allow you to apply without needing a Social Security number, but they are harder to be approved for. A business credit card that doesn’t require a personal guarantee is the best option for new business owners.
Benefits of Using an EIN to Apply for Business Credit Cards
While any business can still apply for a business credit card without an EIN, having one offers certain advantages. Below are a few reasons you’d want to use an EIN instead of sharing your SSN with credit companies.
Your Personal Credit History Is Not Considered
By using an EIN instead of an SSN when applying for business cards, companies won’t use your personal history in consideration for approval. This is especially helpful if you don’t have a good personal credit history to begin with. Low personal credit scores that wouldn’t normally be approved for cards with lots of perks may still have a chance with business cards.
Having a poor credit history could also affect your ability to get higher credit limits with your business cards. Companies that plan on doing a lot of spending will need larger limits in order to purchase expenses that help foster growth.
Individuals who don’t have a good personal credit history have a second chance to rebuild a good credit history with their business.
Business and Personal Credit History Will Be Separate
The biggest advantage of using an EIN to apply for business credit cards is it will keep your personal credit history and business credit history separate.
The more you can separate your personal and business finances, the easier it will be to file taxes at the end of the year. Your organization will improve, and you won’t have to separate expenses for every quarter.
To make things even better, companies typically report business credit cards to commercial credit bureaus only instead of reporting activity to personal credit bureaus. This means any negative activity you accrue on your business credit history won’t affect your personal credit history (and vice versa).
No Personal Guarantee Required
The last benefit of using an EIN for business credit cards is avoiding a personal guarantee. A personal guarantee is when you agree to be held personally responsible for business card debt if the business can’t make payments. This means that even if your business defaults on the credit card, the credit card company can come after your personal assets to recoup their losses.
For small businesses and entrepreneurs just starting out, this could be a huge risk. New business owners typically don’t have a lot of assets to their name, and being held personally responsible for business debt could ruin their personal finances. If you can find a business credit card that doesn’t require a personal guarantee, it’s always best to go with that option.
How to Apply for a Business Credit Card With an EIN
Although the actual application process is fairly straightforward, there are several steps you want to take before seeking approval from business credit card companies.
Apply for an EIN
Your first step to applying with an EIN is to get your EIN from the IRS. To do this, you can either apply online, by fax, or by mail.
The quickest and easiest method is to apply online through the IRS website. The whole process will take less than 15 minutes as long as you have all the necessary information on hand. To apply for an EIN online, you’ll need:
- Your business name and address
- Your SSN
- Your business structure (sole proprietorship, corporation, etc.)
Once you have all the necessary information, simply head to the IRS website and fill out Form SS-4. The online application will ask a series of questions related to your business and then generate your EIN once it’s complete.
Keep this number close either in a note on your phone or on a piece of paper you can easily access. Not only will you use an EIN for applying to credit companies, but you’ll need it for tax purposes as well.
Research the Best Business Credit Card for Your Needs
Not all business credit cards will accept businesses with only their EIN. Typically, most business cards will require an SSN that works as a personal guarantee.
Corporate cards are one option that only requires an EIN for approval. However, corporate cards typically have strict application rules or require a very high profit margin to be approved. Some might even require a high minimum balance to be kept in your account at all times.
See our list below for a number of cards that don’t require a personal guarantee.
Fill Out the Application
Most credit companies make it incredibly easy to fill out their applications because they want as many businesses to apply as possible. You’ll see a specific field that requires an EIN input in the form, and you can copy and paste your number into the field. Once you are finished, complete the rest of the application and submit it.
Almost all credit card companies process your application within minutes (if not seconds), and you’ll likely know if you’re approved or not immediately.
Business Credit Cards That Don’t Require an SSN
Finding credit card companies that don’t require an SSN requires reading through terms and conditions and cross-referencing different companies. To make it easier on you, below is a list of the best credit cards that don’t require an SSN you can apply to only using your EIN.
Rho
Rho is an excellent choice for companies with a large capital reserve and high-growth potential. The card doesn’t require any personal guarantee but still offers a generous 1.75% cash back on eligible purchases.
The challenge with the Rho Corporate Card, and corporate cards in general, is the $50,000 minimum account balance you must keep available at all times.
If your business doesn’t have that much capital, you can still be approved, but you must spend at least $5,000 each month in expenses.
Businesses that can meet the strict requirements by Rho will enjoy a handful of budget management tools that are made for large companies.
Ramp
The Ramp Business Card doesn’t require a personal guarantee and works as a charge card. That means your business won’t be able to carry a balance from month to month but at least you can keep your personal and business credit history separate.
For businesses that have smaller expenses and don’t need large, upfront capital, the card will work just fine. There isn’t any annual fee, and because you can’t carry a balance, you won’t have to worry about APR interest rates eating into your budget.
Your business will, however, need an excellent credit rating in order to be considered for approval, and sole proprietors are not eligible to apply.
Ramp includes a few budget management tools that work for your entire team, making the card more attractive for smaller businesses with several team members.
Frequently Asked Questions
Can you use an EIN to get a credit card?
Yes, you can use an EIN to get a credit card, although most companies will require a personal guarantee to be approved. Corporate cards are often the only ones that only accept an EIN, but restrictions for applying are strict.
Can an EIN help you build your business credit?
Yes, using an EIN to get a credit card can help you build your business credit. Cards like the Rho Corporate Card approve companies with only an EIN and accept companies with poor or bad credit ratings.
Can I use my business’s EIN on a personal credit card application?
Giving your business EIN number on a personal credit card application may impact your approval, although not all personal credit companies do a business credit check. You’ll have to look at the terms before applying or contact the credit card company to see if they take business credit history into account when approving applicants.