How to Apply for a Business Credit Card with an EIN

A company should maximize its credit card strategy because, according to a 2022 Mastercard survey, credit cards are the most popular means of funding for small businesses. A business can create a distinct credit history from its owner’s credit profile by applying for a corporate credit card using an Employer Identification Number (EIN). 

Additionally, building a solid, independent business credit score is crucial since it makes it easier for the company to obtain working capital for ongoing expenses, tradelines with suppliers, and funding for expansion. Maintaining financial records and filing taxes are also improved when personal and business finances are kept apart.

What is an EIN

An EIN is a nine-digit tax ID number that uniquely identifies a company organization and is provided by the Internal Revenue Service (IRS). Any kind of business, including corporations and single proprietorships, can get an EIN for free. Companies based in the United States or its territories can apply online, by fax, or by mail for an EIN. To apply online for an EIN, you must have a Social Security Number (SSN) or another tax identifier. 

Businesses with global locations need to get in touch with the IRS directly. Questions like can you use an ein to get a credit card and the answer is yes. Sure, all you need to apply for a company credit card is your EIN. There will be fewer options available to you, though. Most business credit card issuers want an SSN, an EIN, or both from prospective applicants. To be approved for a card using your EIN, you may need to fulfill extra conditions if your company doesn’t have any established credit. These conditions could include having a specific amount of capital in the bank or reaching a given monthly revenue goal.

The Advantages 

Creating a credit history for the company is one of the main advantages of using an EIN when applying for a business credit card. Business credit bureaus maintain a record of the credit profile of the business, and business card issuers report activities to them using the EIN. A strong credit history is crucial for obtaining funding for working capital and capital growth while assisting in the maintenance of liquidity as a business expands and its requirement for capital rises. 

Can a Small Business Owner Apply?

Since an EIN limits liability to the business and removes personal accountability for any unpaid business credit card debt, it is ideal for business owners to use just an EIN when applying for credit cards. The applicant’s personal credit history is similarly shielded from influencing the business’s credit eligibility when merely an EIN is used. 

When requesting an SSN on a business card application, an issuer is requesting access to the applicant’s credit report, which will be used to evaluate the creditworthiness of the business based on the applicant’s credit history. The applicant’s personal credit history, including any late payments, charge-offs, or bankruptcies, will reflect poorly on the business and make it more difficult for it to get financing. 

Therefore, applying for business credit with just an EIN has a distinct benefit for an owner with a bad personal credit history.

Bottom Line 

For small business owners, there are some major advantages to using an EIN when applying for a business credit card. “Can you use an EIN to get a credit card?” is a common question among entrepreneurs, and the answer is affirmative. It aids in building the company’s credit profile, which is crucial for upcoming funding needs. Having an EIN makes it easier to separate financial data related to individuals and businesses, leading to more accurate tax reporting and record-keeping. Additionally, when wondering about the role of an EIN in obtaining a credit card, it’s important to note that it not only streamlines the application process but also contributes to establishing a distinct financial identity for the business, enhancing its overall financial credibility.