When you apply for a business credit card, most companies require your Social Security number (SSN). This also implies that if you apply for a corporate credit card, a hard query will be made on your personal credit record, which not everyone wants.
Fortunately, there is a workaround to consider that enables you to obtain a company credit card with just your EIN if you are looking to obtain one without disclosing too much personal information: apply for a corporate credit card rather than a small business credit card.
Despite having tighter application standards, corporate cards sometimes permit users to apply using an Employer Identification Number (EIN) rather than an SSN.
Unfortunately, the corporate card trick won’t work if your firm is just getting off the ground. Business credit and substantial income are frequently prerequisites for corporate credit cards. A company credit card that doesn’t need a personal guarantee is your second choice to consider.
So, how do you apply for a business credit card using EIN?
What is an EIN for?
An EIN is a unique number that the IRS issues to identify your company for tax purposes, such as on business tax returns. Numerous companies, including sole proprietorships, small enterprises, private employers, nonprofit organizations, and other commercial entities, utilize this IRS EIN Tax ID that have nine-digit number.
Your SSN is similarly nine digits but has a totally different function. The Social Security Administration (SSA) issues your SSN, which is used to monitor your individual earnings. So, when you apply for Social Security benefits, it is also used to identify and monitor those earnings.
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Do You Need an SSN to Apply for a Business Credit Card?
This special IRS identification number functions like the Social Security number for your company. Obtaining EIN business credit cards might assist in creating a unique credit history for your company.
Your SSN may also be required for company credit cards for security reasons.
Businesses can more quickly identify you if there is any questionable activity on your account if they have your SSN on file.
They can be certain you are using the card and will settle the bill this way. The final one serves as a personal guarantee for any credit card obligations.
What kinds of company credit cards are available to applicants with an EIN?
While many credit card companies demand an EIN for business cards, certain cards are available.
Prepaid business card
An EIN-only prepaid business card is another option. Prepaid cards are thought to be low-risk. Thus, your SSN won’t be required. Suppose you need to arrange trips or make an online purchase of supplies. For instance, cash payments aren’t an option. In that case, this choice provides you the flexibility and advantages of a credit card. Additionally, it is safer than cash since you might be able to get your money back if you lose your card.
Once you have the card, you must load it with a predetermined sum and use it as you normally would a company credit card. You would have a $400 credit limit on the prepaid card, for instance, if you loaded it with $400. You’ll need to reload your card with fresh money after reaching the $400 credit limit.
Suppose you don’t have the income that corporate cards demand. In that case, this can be a viable alternative to an EIN-only business card. A prepaid business card’s primary drawback is that, similar to prepaid personal credit cards, it doesn’t raise your company’s credit rating because issuers frequently don’t disclose payments to credit bureaus. Additionally, in this instance, responsibly using your credit card is hurting your credit.
Corporate gas card
A corporate gas card that simply requires an EIN, like the Shell Small Business Card, may be helpful if your company has to fill up on gasoline frequently. Corporate gas cards allow you to establish fuel limitations and may be used to provide several cards to your staff (and sometimes even location limits).
Corporate gas cards offer reports on card activity and require solid company credit to be authorized, much like ordinary corporate credit cards do. The drawback is that they cannot be used for all commercial purchases. Corporate gas cards are only used to fill up at the pump and occasionally to pay for vehicle maintenance.
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Corporate business card
Businesses with yearly revenues in the millions are eligible for corporate business credit cards. These cards have corporate responsibility, as the name would imply, which means no one individual is liable for the account’s unpaid balance. Likewise, as the business is the only party liable for charges made to the account, it also stands to gain from points that have been earned and other card privileges.
A business credit card comes with more comprehensive information. A company’s accounting department will have access to analytics and reporting tools to track how the cards are being used. They can also set spending limits for specially issued cards.
You must, among other things, fulfill the issuer’s mandated revenue barrier and have a strong company credit profile if you’re considering getting a corporate credit card that only accepts an EIN. This makes it difficult for small business owners to use corporate credit cards.
How to improve your business credit using your EIN
When you apply for a credit card using your EIN rather than your SSN, your credit card issuer will normally report your credit card use to the corporate credit agencies but not the personal credit bureaus (though you should clarify this with the issuer). This indicates that as long as you manage your credit card usage carefully, you may establish your company credit and eventually qualify for higher credit products as your business credit score grows.
Although applying for a business credit card with just an EIN is technically feasible, doing so is difficult and has strict qualifying restrictions. For many small company owners, it is not a practical alternative.
Also, it makes sense to apply for a business credit card with your SSN and pick an issuer that either doesn’t report business card activity to the consumer credit agencies or one that only exposes delinquent behavior.