If you’re a small business owner, you know the importance of having a separate business credit card to manage your business expenses. While it’s common for business owners to use their personal credit cards for business expenses, having a business credit card can help you keep your personal and business finances separate, build business credit, and access better rewards and benefits tailored for business spending.
One of the challenges in getting a business credit card is the requirement for a personal guarantee, which means you are personally liable for any debt the business accumulates on the card. However, if you have an Employer Identification Number (EIN) for your business, you may be able to qualify for a business credit card without a personal guarantee.
Here are the steps to getting a business credit card with EIN only:
1. Establish a business entity: To apply for a business credit card, you must have a legal business entity, such as a corporation, limited liability company (LLC), or partnership. Having a business entity shows that your business is separate from your personal finances, which is crucial for getting a business credit card without a personal guarantee.
2. Obtain an EIN: An EIN is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to identify your business for tax purposes. You can apply for an EIN online on the IRS website for free. Having an EIN is essential for establishing your business as a separate entity and applying for a business credit card.
3. Build business credit: Before applying for a business credit card, it’s important to establish and build your business credit history. You can do this by opening a business bank account, obtaining a business phone line, and using trade credit from suppliers. Building a strong business credit history will increase your chances of being approved for a business credit card without a personal guarantee.
4. Research business credit card options: Once you have your business entity and EIN in place, research business credit card options that do not require a personal guarantee. Look for cards with favorable terms, rewards, and benefits that best suit your business needs.
5. Apply for a business credit card: When applying for a business credit card, be prepared to provide your EIN, business address, and other business information. Some issuers may require additional documentation to verify your business, such as articles of incorporation, business license, or financial statements.
6. Build a strong business profile: Even if you are initially approved for a business credit card with EIN only, it’s important to continue building a strong business profile by using the card responsibly and making timely payments. This will help you qualify for higher credit limits, better rewards, and more favorable terms in the future.
In conclusion, getting a business credit card with EIN only is possible if you have a legitimate business entity and have built a strong business credit history. By following these steps and choosing the right business credit card, you can effectively manage your business expenses and take advantage of the benefits of having a separate business credit card.