Can you get a Business Credit Card without an EIN?
Can you get a Business Credit Card without an EIN?
Whether you're embarking on a new side hustle or managing a thriving business poised for growth, obtaining a business credit card could be a viable option. Even if your business isn't formally incorporated yet, as long as you're generating income through legitimate means, you can apply for a small business credit card using your Social Security number if you haven't acquired an Employer Identification Number (EIN) yet.
In this guide, we'll walk you through the essentials of business credit cards and why they might benefit your venture.
What is an EIN?
An EIN (Employee Identification Number) is issued by the IRS to identify businesses in the U.S. It serves multiple purposes, including detailing the state of registration and specifying the type of business tax filings required. This number is sometimes referred to as the Federal Tax Identification Number.
Applying for an EIN is free and can be done online. The application asks for basic details about your business and typically does not require any official documentation. Upon submission, the IRS validates the information and issues the EIN during the same online session.
Qualifying Work for a Business Credit Card
Any endeavor that generates legitimate income can potentially qualify for a business credit card. Examples include freelance writing, ridesharing services, tutoring, independent consulting, entertainment services, handywork, social media management, pet services, and online artisan sales.
Requirements for a Business Credit Card
While a formal business name or EIN isn't mandatory, issuers assess various factors related to your business, such as its duration and profitability. Business credit cards typically hold the business owner personally liable for the credit line, so the issuer may consider personal details like credit score and income during the application process. Once approved, however, the business credit card operates separately from personal finances, affecting only the business credit score.
Advantages of a Business Credit Card
Choosing a business credit card over a personal one offers distinct advantages tailored to business needs:
Business-specific perks: Many cards provide expense management tools, employee cards, purchase protection, and even airport lounge access for frequent business travelers.
Rewards on business expenses: Earn rewards on purchases like office supplies, travel expenses, and equipment purchases, which can be redeemed for cash back or travel benefits.
Building a business credit score: Responsible use of a business credit card helps establish a business credit profile, crucial for future financing and vendor relationships.
Choosing the Right Business Credit Card
Before applying, consider these factors:
Rewards: Opt for a card that aligns with your business spending habits, whether it's cash back on office supplies or travel rewards for frequent business trips.
Features and benefits: Look for perks like employee cards, discounts on business-related services, travel insurance, extended warranties, and account management tools.
Interest rates and credit limits: Compare interest rates based on your creditworthiness and consider the credit limit that suits your business's financial needs.
In conclusion, whether your business is just starting out or well-established, a business credit card can provide financial flexibility and benefits tailored to business expenses. Keeping personal and business finances separate can streamline accounting and offer additional value through rewards and perks.
If you're unsure where to begin, consider exploring Chase's range of business credit cards, such as the Ink Business Premier™, designed to meet diverse business needs.
