No, you don’t need good personal credit to get a business credit card, as business credit cards are available to applicants with credit scores ranging from bad to excellent. The best business credit cards typically do require a good personal credit score, however, which means you need a credit score of 700+ to qualify.
When you apply for a business credit card, the issuer will evaluate your personal credit history as part of the application process to get a better idea of how you manage your finances. This is important because nearly all small business credit cards require a personal guarantee. Given that small business owners are personally liable for unpaid business credit card balances, card issuers must evaluate applicants’ personal credit to determine their risk as a borrower.
Options for People Who Do Not Have Good Personal Credit
Other alternatives include secured business cards, or even unsecured personal credit cards for bad credit. Secured business credit cards are the better choice for people with bad credit because they have low fees and require a refundable security deposit as collateral on the account. The amount of your security deposit will determine your credit limit.
You need a credit score of 700 or higher to get the best business credit cards. The top business credit cards usually require at least good credit for approval, but there are still options for small business owners with fair, limited or bad credit. In other words, you can get a business credit card with pretty much any credit score, though the most attractive offers are reserved for the most creditworthy applicants.… read full answer
By the way, it’s your personal credit rating that really matters, even though you’re applying for a business credit card. The higher your score is, and the more income you have relative to your debt, the better your chances of approval will be.
Popular Business Credit Cards by Credit Score Requirement
In general, good-to-excellent credit gets you access to the biggest sign-up bonuses, the highest ongoing rewards rates, and lots of options with no annual fee. People with lower scores are more likely to have to choose between low fees and other perks.
If you’re wondering why credit card companies rely on personal credit to evaluate business credit card applications, a lot has to do with personal credit histories usually being longer than the business version. Since they’re longer, they tend to be more predictive. Most credit card companies also consider a business owner’s personal finances to be intertwined with the business. That’s often true, since personal savings are the top source of start-up capital for new businesses.
Your personal credit standing is always going to be far more important than your business credit standing, even when you apply for a card branded for business use because credit card companies hold business credit card users personally liable for any debt they incur. It is therefore important to maintain a responsible use by paying your debt on time and staying under your credit limit, as this will improve both your personal and business credit scores.… read full answer
As for your second question, you can open a personal account in your name and use it for business purposes. Personal credit cards are particularly well suited for financing, as they are covered by the CARD Act and thus benefit from its protection against arbitrary interest rate increases on existing balances. With most business credit cards on the other hand, issuers do not have to wait for an account to become 60 days delinquent before increasing the cost of existing balances held on it. That in turn fosters debt instability, which is problematic when you consider that you’ll be held personally liable even for business credit card debt.
With that being said, we still recommend business-branded credit cards for everyday company purchases given their business-specific rewards and accounting features, not to mention the freedom they give you to customize spending limits for employees and then benefit from their spending. You can compare our favorite offers here. Hope this helps.
Yes, you can apply for some business credit cards with an EIN only, but most credit cards will not allow it. Most business credit cards require a Social Security number or Individual Taxpayer Identification Number in addition to an Employer Identification Number (EIN).
The EIN shows that you’re legitimately a business owner. The SSN, or ITIN, allows the credit card company to review your personal credit history when evaluating your application and hold you personally accountable for paying the bill if you’re approved. Almost all business credit cards require personal liability. But there are a few exceptions.… read full answer
Business Credit Cards You Can Apply for With an EIN Only
Office Depot Business Credit Card: You can apply with without an SSN if your company makes over $5 million per year and has been in business for at least three years. Or, if you are a government entity (including schools) or a nonprofit, you can apply without personal liability also. This card only works for OfficeMax and Office Depot purchases. This card requires fair business or personal credit.
Sam's Club® Business Credit Card: You can apply without an SSN if your company makes $5+ million per year, is more than 2 years old and has more than 10 employees. You can only get this card if you’re a Sam’s Club member, and you need good business or personal credit to be approved. You can use the card anywhere that accepts Mastercard.
SuperAmerica Fleet Credit Cards: You can apply for these cards without an SSN if you’ve been in business for at least three years. You can use it at all SuperAmerica gas stations and 45,000 partner stations nationwide. Both cards require good business or personal credit.
Shell Small Business Credit Card: You can get this card without any personal liability if you’re applying on behalf of a government entity or non-profit, or if your business has been open for at least three years and does $1+ million in yearly sales. This card requires fair business or personal credit, and you can use it at any of the 12,000 Shell gas stations nationwide.
If you want to apply for a business card with only an EIN, the choices are slim. But your options become far greater when you consider the full range of cards that require personal liability.
If you’re worried that your personal credit isn’t good enough to qualify for a business credit card, remember that you can apply for a secured business card, or even consider applying for a secured personal card and use it for business expenses. So, consider personal options such as the Discover it® Secured Credit Card as well as the likes of the Wells Fargo Business Secured Credit Card. Both are available to people with bad credit.
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