Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
According to a 2022 study by Mastercard, credit cards are the number one source of funding for small businesses. Given the prevalence of credit cards in business finances, it makes sense for a business to optimize its credit card strategy.
By using an Employer Identification Number (EIN) when applying for a business credit card, a company can build a separate credit history apart from its owner’s personal credit profile. Establishing a strong business credit score is important as it facilitates the business’ access to funds for expansion, tradelines with suppliers and working capital for day-to-day expenses. Separating business and personal finances is also better for record-keeping and tax reporting.
Featured Partner Offer
Ink Business Unlimited® Credit Card
On Chase Bank USA, NA's Website
4.5
Forbes Advisor created additional star ratings so that you can see the best card for specific needs. This card shines for this use, but overall the star ratings may differ when compared to other cards.
On Chase Bank USA, NA's Website
1.5% Reward Rate
Earn unlimited 1.5% Cash Back rewards on every purchase made for your business
Welcome Bonus
Earn $750 bonus cash back
Annual Fee
$0
Regular APR
18.49% - 24.49% Variable
Credit Score
Excellent, Good(700 - 749)
Editorial Review
Busy business owners will appreciate this card’s simple flat-rate rewards program which doesn’t require time to manage and optimize.
Pros & Cons
- Unlimited 1.5% cash back rewards on purchases
- No annual fee
- Generous welcome bonus
- 0% Intro APR on purchases for 12 months
- Cash back awarded as Ultimate Rewards, which can be combined with premium Chase credit card accounts for better reward redemption options
- High foreign transaction fees
- Not a good card for balance transfers
Card Details
- Earn $750 bonus cash back after you spend $6,000 on purchases in the first 3 months from account opening
- Earn unlimited 1.5% cash back on every purchase made for your business
- No Annual Fee
- Redeem rewards for cash back, gift cards, travel and more through Chase Ultimate Rewards®.
- Earn rewards faster with employee cards at no additional cost. Set individual spending limits for greater control.
- Round-the-clock monitoring for unusual credit card purchases
- With Zero Liability you won’t be held responsible for unauthorized charges made with your card or account information.
- 0% introductory APR for 12 months on purchases
- Member FDIC
Earn $750 bonus cash back after you spend $6,000 on purchases in the first 3 months from account opening.
Credit Score ranges are based on FICO® credit scoring. This is just one scoring method and a credit card issuer may use another method when considering your application. These are provided as guidelines only and approval is not guaranteed.
Featured Partner Offer
Bank of America® Business Advantage Customized Cash Rewards Mastercard® credit card
On Bank of America Small Business New Account's Website
4.3
Forbes Advisor created additional star ratings so that you can see the best card for specific needs. This card shines for this use, but overall the star ratings may differ when compared to other cards.
On Bank of America Small Business New Account's Website
Up to 3% Cash Back
Earn 3% cash back in the category of your choice, 2% cash back on dining purchases and unlimited 1% cashRead More
Welcome Bonus
$300
Annual Fee
$0
Regular APR
18.49% - 28.49% Variable APR on purchases and balance transfers
Credit Score
Excellent Credit(750 - 850)
Editorial Review
For business owners who max out the 50k annual spending on the bonus categories, the rewards are substantial for a no-annual-fee card. Preferred Rewards for Business members can make out like a bandit with the 25-75% rewards bonus. The foreign transaction fee means it’s best to keep this card at home when traveling overseas.
Pros & Cons
- Introductory APR offer on purchases
- 3% cashback rate on the spending category of your choice
- Preferred Rewards for Business members earn a 25-75% bonus
- Foreign transaction fee
- 2% and 3% bonus categories have a combined annual spending cap of $50,000
- No intro APR offer for balance transfers
Card Details
- Get a $300 online statement credit after you make at least $3,000 in purchases in the first 90 days of your account opening.
- Earn 3% cash back in the category of your choice: gas stations & EV charging stations (default), office supply stores, travel, TV/telecom & wireless, computer services or business consulting services, 2% cash back on dining purchases and 1% cash back on all other purchases.
- You’ll earn 3% cash back on purchases in the category of your choice and 2% cash back on dining purchases on the first $50,000 in combined choice category/dining purchases each calendar year, 1% thereafter.
- You can earn up to 75% more cash back on every purchase, if you have a business checking account with Bank of America and qualify for Preferred Rewards for Business Platinum Honors tier. That means you could earn up to 5.25% cash back in your selected choice category and up to 3.5% cash back on dining purchases on the first $50,000 in those combined purchases each calendar year, and up to an unlimited 1.75% cash back on all other purchases.
- No annual fee.
- Choose how to redeem your cash rewards-as a deposit into your Bank of America® checking or savings account, as a card statement credit or as a check mailed to you. Cash rewards don’t expire as long as your account remains open.
- To change your choice category for future purchases, you must go to the Mobile Banking app or Business Advantage 360, our small business online banking. You can change it once each calendar month, or make no change and it stays the same.
- 0% Introductory APR on purchases for your first 9 billing cycles. After the intro APR offer ends, a Variable APR that’s currently 18.49% to 28.49% will apply.
- Contactless Cards – The security of a chip card, with the convenience of a tap.
- This offer may not be available if you leave this page or visit our website. You can take advantage of this offer when you apply now.
Get a $300 online statement credit after you make at least $3,000 in purchases in the first 90 days of your account opening.
Credit Score ranges are based on FICO® credit scoring. This is just one scoring method and a credit card issuer may use another method when considering your application. These are provided as guidelines only and approval is not guaranteed.
What Is an EIN?
An EIN is a nine-digit tax ID number issued by the Internal Revenue Service (IRS) that identifies a business entity. All types of businesses, from sole proprietors to corporations, can obtain an EIN free of charge. Businesses located in the U.S. or U.S. territories may apply for an EIN online, by fax or by mail. A Social Security number (SSN) or another tax identifier is required to apply for an EIN online. Internationally located businesses must contact the IRS directly, by phone, fax or mail.
Benefits of Using an EIN When Applying for Business Credit Cards
A major benefit of using an EIN when applying for a business credit card is establishing a credit history for the business. Business card issuers, using the EIN, report activity to commercial credit bureaus that keep a record of the business’ credit profile. As a business grows and its need for funds increases, a healthy credit history is invaluable for securing funds for capital expansion or working capital. According to the U.S. Small Business Administration, 46% of small businesses use personal credit cards for business expenses, thereby missing out on the opportunity to build a business credit history. Although, you can generate business credit history with a business credit card, even if you use your Social Security number, there may be additional risks involved.
Another benefit of applying for a business card with an EIN is the separation of business and personal finances. A dedicated business credit card provides improved tracking of expenses and provides more accurate record-keeping for accounting and tax reporting purposes. Overall, isolating business from personal financial activities gives the owner better information on business performance and aids in decision-making.
Can a Small Business Owner Apply for a Small Business Credit Card With Only Their EIN?
Ideally, a business owner would prefer to use only an EIN for credit card applications. EIN-only applications can limit liability to the business alone and eliminates personal liability for any unpaid business credit card debt.
Using only an EIN also prevents the applicant’s personal credit history from affecting the business’ eligibility for credit. When an issuer requests an SSN on a business card application, it means that the applicant’s personal credit report will be pulled and their credit history will be used in the issuer’s assessment of the business’ creditworthiness. Any negative marks on the applicant’s personal credit history, such as late payments, charge-offs or bankruptcies, affect the business’ ability to secure credit. So for an owner with a poor personal credit history, there is a clear advantage to applying for business credit with only an EIN.
However, the reality is that submission of the owner’s SSN, in addition to the company’s EIN, is necessary when applying for a business credit card in the vast majority of cases. Federal law, under the Customer Identification Program, requires that financial institutions verify the identity of a customer. Business credit card issuers will use the SSN of an owner for the verification process since a small business may have little credit history to make this verification on business data alone.
Another consideration is that small businesses with limited assets and minimal credit history represent more financial risk to lenders. Credit card issuers reduce their financial exposure by requiring the business owner to provide a personal guarantee for business debts. In reviewing an application for a business credit card, the card issuer may consider the personal credit history of the owner to assess whether they could cover unpaid business debt, should the business default.
This underlines the importance of maintaining a healthy personal credit report when running a business. According to a 2020 Federal Reserve Bank study, 88% of small businesses relied on the personal credit score of an owner to obtain financing.
Corporate credit cards are consistently the only types of credit cards that allow applicants to use an EIN without the additional submission of an SSN. However, they are generally only available to established corporations with significant assets, history and revenue which mitigates the financial risk for credit card issuers.
Business Credit Cards With EIN Only
Since corporate credit cards are typically the only types of cards applicants can secure by solely providing their EIN, the options are slim. Corporate cards are also not built for small businesses. Typically, businesses may only qualify for these cards if they can show a specific amount of assets or revenue. If you do qualify for a corporate card, here are some options you can apply for without having to include your SSN alongside your EIN:
- Brex Card*: Brex issues corporate credit cards to qualifying businesses based on revenue, number of employees, investment thresholds or startups on the path to meeting these metrics. If your business meets Brex’s criteria, you can submit an application as long as you have a U.S. EIN issued by the IRS, a valid U.S. incorporation and a physical address.
- Ramp Business Card: In order to qualify for a Ramp Business Card, you must have $75,000 in a U.S. bank account that you link to your application. If your business meets this criteria, and is a corporation, LLC or LP, you can submit an application with only your EIN.
How To Keep Business Credit Separate
Small business owners can keep their business and personal credit reports separate by applying for business credit cards that don’t report to consumer credit bureaus. Issuers will likely still require the owner’s SSN during the application process, in order to determine creditworthiness. This will trigger a hard credit inquiry on the applicant’s personal credit report.
However, beyond the initial hard pull, subsequent activity on the business credit card account will usually only be reported to commercial credit bureaus. There are some business card issuers that routinely report to consumer credit bureaus, so it’s best to contact the card issuer to verify what their reporting policy is.
One reporting exception is in the event of negative activity in the business account, for example, non-payment. In that case, the card issuer may report the derogatory item to the consumer credit bureau, affecting the owner’s personal credit score.
How Do I Build Credit With My EIN?
After replying for and receiving an EIN for your business, there a few key steps to follow in order to build business credit:
- Apply for a D-U-N-S number. Just as a SSN is used to track your credit history with consumer credit bureaus like Experian, Equifax and TransUnion, a Data Universal Numbering System (D-U-N-S) number is used to track your business credit with business credit bureaus. After receiving your EIN, you can register your business with Dun & Bradstreet—one of the major business credit bureaus—to receive your D-U-N-S number.
- Improve your personal credit score and apply for a business credit card. If your personal credit score is in a strong place, you can use your SSN and EIN to apply for a business credit card. After using a business credit card responsibly, this history will be reported to the business credit bureaus and can help you build business credit over time.
- Make business credit card payments on time and in full. After receiving a business credit card, manage the card responsibly. Pay your balance on time and, whenever possible, in full each statement period.
- Monitor your business and personal credit reports. Mistakes happen, but mistakes on your credit report can result in substantial negative changes of your credit score. It is a best practice to request a copy of both your personal and business credit reports from the credit bureaus, at least once a year, to ensure no mistakes are being reported.
Bottom Line
Using an EIN during the business credit card application process has some significant benefits for the small business owner. It can help establish a credit profile for the business, which is important for future financing requirements. It also facilitates separating personal and business financial data, which results in more accurate record-keeping and tax reporting.
Find The Best Credit Cards For Startups And New Businesses Of 2024
Learn More
