That’s because most small-business cards require applicants to personally guarantee the debt on the card. In other words, you are still responsible for paying back any debt, even if your business goes under.
As a result, when you apply for a small-business card with an EIN, the issuer will typically use your Social Security number to check your personal credit. Many small-business cards require good to excellent personal credit (typically FICO scores of at least 690) for approval.
Keeping business separate
If you prefer to keep your business and personal accounts separate, then you can look for a card that reports only to commercial credit bureaus and not the consumer credit bureaus. Or you can look for one that doesn’t report payments at all. Bank of America®, Citi and Wells Fargo don’t report the activity from their small-business cards to the consumer credit bureaus. BBVA, which offers the
BBVA Visa® Business Rewards Credit Card, doesn’t report small-business card activity to any of the credit bureaus, consumer or commercial.
Nerdy tip: Some issuers, such as Chase and U.S. Bank, report to consumer credit bureaus only if the account is seriously delinquent. Similarly, American Express reports only negative information.
If the card does report to the consumer credit bureaus, as in the case of Capital One and Discover small-business cards, then the effect can be positive or negative: If you make your payments on time and have a low credit utilization ratio (ideally less than 30%), then the account could improve your credit scores. But if you miss payments and accrue substantial debt, it could drag down your scores.
Your personal liability
Regardless of whether your small-business card reports to the credit bureaus, the personal guarantee still applies: Even if your small business goes out of business, you will still be responsible for paying off the card.
Card issuers often spell out these rules in the terms and conditions that come with the card. Before signing up for a card, you can read through the terms and conditions and look for terms like “personally responsible” and “liable” to see just what you’re signing up for.
Exceptions to the rule
There are some credit card issuers that require an EIN to apply but not a Social Security number. The
Brex Card, for example, is a corporate card for startups that doesn’t require an SSN or a personal guarantee. Instead, it evaluates creditworthiness based on things like the company's cash flow and spending patterns. It also requires a bank balance of $50,000 to qualify ($100,000 if you're self-funded).
In general, though, corporate cards — where the company is on the hook for the debt and not the individual cardholder — are available for businesses with established credit histories, not for new businesses or very small businesses.
If you just opened up shop or are running a one- or two-person business, it will be difficult to find a small-business credit card that doesn’t require your Social Security number along with your EIN.