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Home Business Finance Applying For A Business Credit Card Using An EIN
*All information included in this article was current on its publication date (August 27, 2021) and is subject to change.
Because business credit cards don’t require collateral and are easy to use and apply for, they’re a very common way for small businesses to secure a boost of funding. If you’ve ever applied for a personal credit card, you know you need to input your Social Security number (SSN), a unique 9-digit number that identifies you as an individual with the United States government, including the Internal Revenue Service.
For small business owners, there are other ways to identify yourself and your business when applying for credit cards—most commonly, businesses have an Employer Identification Number, or EIN. You can apply for some business credit cards using an EIN, although in most cases—but not all—you have to provide a personal SSN as well. There are good reasons to utilize an EIN for business credit cards, so you should understand how you should identify yourself before you submit any applications.
An EIN is a 9-digit number (for example, 12-3456789) assigned to employers, sole proprietors, corporations, partnerships, estates, trusts, certain individuals, and other entities for tax filing and reporting purposes,” the IRS’s official definition states.
The IRS identifies taxpayers using several methods, which vary based on the type of taxpayer: SSN is used for individuals, EIN for employers, and Individual Taxpayer Identification Number (ITIN) for certain categories of nonresidents.
Therefore, an EIN is a number that identifies your business with the IRS and other entities.
“An EIN is a 9-digit number (for example, 12-3456789) assigned to employers, sole proprietors, corporations, partnerships, estates, trusts, certain individuals, and other entities for tax filing and reporting purposes,” the IRS’s official definition states.
In many cases, like if you have employees, an EIN is required for your small business. In other cases—if you run a sole proprietorship, for example—an EIN is not necessary to pay taxes. However, there may be reasons you might still want an EIN separate from your personal SSN, one being that you might want to use your EIN to apply for business credit cards.
There are many cases in which the IRS requires a business to have an EIN. The agency has a checklist to see if your operation needs an EIN to do business in the US. Unless you are self-employed and have no employees other than yourself, an EIN is probably required.
If you answer yes to any of the following questions, the IRS requires your business to have an EIN:
You might want to apply for an EIN even if you don’t technically need one—if you know you’ll need to hire employees but haven’t done so yet, for example.
The IRS application for EINs is always free, and the process is straightforward. Importantly, beware of any companies or websites that require payment for an EIN—these are scams. The IRS allows businesses to apply online using its EIN assistant. You can also apply for an EIN through fax or mail. To do so, you have to fill out IRS Form SS-4. Either way, the information you need to provide (like your name and business industry) is the same.
After you apply for an EIN online or with Form SS-4, the IRS will send you a notice of approval. The notice will include your EIN.
If you lost your EIN or need a copy of your Form SS-4, contact the IRS Business and Specialty Tax Line.
If you want an EIN specifically to apply for business lines of credit or a business credit card, the process is the same—use the IRS’s online system or fill out Form SS-4.
The personal guarantee requirement means that it’s pretty rare to be able to apply for a credit card without inputting an SSN at all—even if you have an EIN. Generally, business credit cards that don’t require an SSN are considered “corporate cards.” Usually to bypass submitting an SSN, credit card companies will require you to have a high income and a high-revenue business. Many also are invite-only.
If you think your business qualifies, there are options available from Stripe, Brex, and Bremer Bank.
Most business credit cards accept applications that use an EIN, but you often have to provide your SSN to fulfill the company’s personal guarantee requirements. Here are several business credit cards that you can apply for with an EIN, but they are far from the only options available:
The Capital One Spark Cash for Business Card is a straightforward option with 2% cash back on everything you spend. There is no fee for the first year of use and an annual fee after that. Capital One offers substantial cash bonuses depending on how much you use the card when you first open it.
Featuring no annual fee, the Chase Ink Business Cash Credit Card is a popular option because of cash bonuses and cashback rewards, depending on what you spend money on.
While the American Express Business Platinum Card costs a hefty $595 annual fee, it provides expansive rewards on flight and hotel purchases as well as eligible purchases over $5,000.
In most cases, you’ll have to provide an SSN on a business credit card application—even if you provide an EIN. Because credit cards are unsecured, credit card companies want to ensure that someone is liable for the card’s debt, even if a business is dissolved. This personal guarantee is a layer of security for the credit card issuer.
Generally, credit card companies will conduct a “hard pull” for your personal credit report even if you apply for a business credit card with an EIN. Even if your business has its own credit history, credit card companies will most likely want your personal credit report. Hard inquiries can negatively impact your credit score, so proceed with caution.
Compare and apply for business credit cards
Once you have an EIN, you can apply for credit with it instead of your personal SSN. However, most credit card companies and banks will still require an SSN because they require personal guarantees.
If your company is structured as a limited liability company (LLC), you can apply for an EIN. If your LLC has no employees, you do not need an EIN. If you’d like to apply for a business credit card using your LLC’s EIN, though, then you should apply for an EIN with the IRS.
The Capital One Spark Classic for Business Card is known for being attainable for business owners with less than stellar credit, and it has no annual fee. Generally, when credit cards are easier to get approved for, the terms, interest, and fees are more expensive. Therefore, it is best practice not to carry a month-to-month balance on the card.
Even if the IRS doesn’t require your business to have an EIN, you may want to apply for one anyway. You might have plans to grow into an operation that requires an EIN. In terms of business funding, many lenders require an EIN on their applications.
“As a business owner, you’ll need an EIN to open a business bank account, apply for business licenses and file your tax returns,” writes business expert Ijeoma Nwatu for the Small Business Administration. “It’s helpful to apply for one as soon as you start planning your business. This will ensure there are no delays in getting the appropriate licenses or financing that you may need to operate.”
One reason you might want an EIN: you can use it to apply for business credit cards.
Barry Eitel has written about business and technology for eight years, including working as a staff writer for Intuit's Small Business Center and as the Business Editor for the Piedmont Post, a weekly newspaper covering the city of Piedmont, California.
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