What You NEED To Know Before Applying For Business Credit Cards

Business credit cards saved my business and earned me thousands of dollars. A few of the amazing benefits include no impact on your personal score, having a higher credit limit, and having better welcome bonuses and cash back rewards.

Business Credit Card Application Walkthrough

Before we dive into how you can get your first business credit card I want to go over a few things you NEED to know.

  1. Business itself is a loose term. Its difficult to define what a business really is, so even if you don’t think you have a legitimate business, most likely you do. Be sure to watch this video if you haven’t already to learn more about creative ideas on what business you can start or businesses you may already have.

  2. Business credit will provide tremendous opportunities if you are looking to maximize your points. Business credit is almost alway superior to their personal counterpart for a variety of reasons.



How To Get Started:

  1. EIN or SSN?

    There are two ways you can apply for business credit cards. You can start by using what you already have and that is your SSN.

    Getting started with your social security number:

    1. . Many members inside our community use their SSN to apply for business credit with no problem. Card issuers are business friendly and want as many clients as possible for the long run. According to the SBA, in 2010 the United States had over 27.9 small businesses. Just imagine how many small business owners we have now!

      Here's how to handle it on the application:

      1. Use your social security number in place of an EIN.

      2. Select sole proprietorship as the business type.

      3. Use your full name for the business name (NOTHING ELSE). This is important if the card issuer needs you to verify your business name.

      4. Use your home address for the business address. Many small businesses are based out of their homes. This is completely acceptable and has worked for myself and all of our members. One thing to note is try to avoid using a PO Box as this can cause issues.

      5. As a sole proprietor it's completely acceptable to use a portion of your personal income as a revenue source. I recommend users to always keep in mind personal assets, projected net worth, and estimated revenue as well since this may be used to repay debt on the account.

      6. Have you ever had a spouse or close friend help you with your business? These people can be considered as a part time employee. Keep in mind, you can add additional employees in the future as your business grows, but if you cannot consider anyone as an addition to the business putting down just ONE employee on the application is perfectly acceptable.

  1. Method Two EIN.

    To put it in layman terms, a business EIN is just a business version of your social security number. This is mandated by the federal government so the IRS can identify people who need to pay taxes.

    Do I NEED to pay taxes if I get an EIN?

    You do not need to pay taxes off your business if you do not make a certain threshold. This is dependent on what your business is and how much you make. I recommend consulting a local CPA or an accountant for exact details on taxes as I am not a certified or recommended source for taxes.

    How can I apply for an EIN?

    To apply for an EIN you simply have to go on IRS.gov and fill out the application online during the hours of operation which is Monday to Friday, 7 a.m. to 10 p.m. Eastern Standard Time.

    The application itself is very straight forward and easy to get. You are only allowed 1 EIN, but you are allowed multiple business certifications under your state legislation. The EIN will just be your federal identification number that you can then use for business credit applications and signing up the business as an entity within the state.

    Why should I use an EIN over my SSN?

    I personally use my EIN over my SSN for a variety of reasons.

    1. To separate my business entities from my personal self. I recommend doing this not only for tax purposes but also legal reasons. Think about an LLC, a limited liability company separates you from your personal assets for liability protection. I personally do not like to mix up my business and personal ventures. Creating that EIN allows me to comfortably do this.

    2. I prefer EIN over SSN because it adds more credibility with an established business. I have been asked MANY times for an EIN from credit issuers, banks, and other business services.

    3. Filing business taxes and avoiding any penalties

    4. Preventing identity theft: You will be using your EIN a number of times and this increases the chances of identity theft and fraud. Separate your personal SSN with your EIN for an extra layer of protection.

    5. Building trust with vendors and companies. When you go out to business events and seminars, sometimes they ask you for your EIN. Be prepared and have this on hand. You never want to slide in an awkward position for something as easy to get as an EIN.

    6. Open more business accounts. With this EIN you can start multiple businesses under your state legislation. I’ve created multiple businesses from e-commerce, digital marketing, and even this personal finance blog. I use my EIN to be the umbrella for these ventures I have started rather than using my personal SSN and full name.

  2. What do I do after I apply for my EIN?
    After you apply for your EIN you will receive an email from IRS.gov that looks like this (below). This will give you your official document. Save it and do not lose it.

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Now that we have an EIN we can move on to the application.

Here's how to handle it on the application:

  1. Open up the application to the specific card you want.

  2. Use your EIN number that you received in your email box from IRS.gov to provide in the application form.

  3. Select sole proprietorship as the business type unless you have another registered entity. I recommend sole proprietorship for this as well because it is the cheapest entity you can obtain. In addition if you file your business in another state for example Nevada, Wisconsin, or New Mexico you can avoid paying high state tax and registration fees as you would in California, NYC, e.g.

  4. Use your trade name or your state registered business name for the business name.

  5. Use your home address for the business address unless you have an actual office location. Most digital businesses operate from a home office, so this is completely acceptable.

  6. Estimated income line. Credit issuers are asking you for your projected revenue. I would stay honest with this amount but if you are unsure, take your best revenue day and create and estimated projection for that year. An example is if you made $300 a day and you are projected to scale higher than you can multiply that by 300 on the safe side as your projected revenue.

  7. How many employees do you have? Most people are going to have just one employee which is yourself, but has your family member ever helped you ship out orders? With employees this is also in a gray area. I myself have 2 virtual assistants that help me with my businesses. They are part-time employees based out of the United States, but I most definitely include them in my business credit applications because they work for me. I’ve had times where I needed to add them as AU’s on my account and give them a card because the digital work that they do for me which requires for me to provide them a credit card number when working with vendors and other manufacturer companies.

Congratulations you just finished applying for your business credit card. So whats next?

If you are in the small minority of lucky candidates the issuing credit card company will auto approve you for the business credit card. If you were someone like me then you will have to submit additional documents after you get a notice in the mail. The documents you need to submit to the credit card company include verification certificates such as the EIN number, a utility bill. Now they will require you to send a physical document through the mail, or fax it to them .They do not take digital documents via email for security reasons of forging documents but these are easy documents to provide.

Here is a video of my experience when submitting the additional proof documents.

What documents should I send to the credit issuers?

Start with your sole proprietorship certification, your EIN document you receive from the IRS and a utility bill. I recommend going above and beyond because when I first submitted just one document it took an additional 2-4 weeks to go through the process again because everything was going through snail mail express.

There are easy ways to obtain a utility bill. Sign up for platforms such as Shopify, Squarespace, or even a g-suite account and provide evidence of your company name on these bills to the credit issuers:

ADDITIONAL FACTS TO KNOW

1 . You will get a hard pull on your first business card application but like I mention in many of my videos. Hard pulls only lower your credit score temporarily, but the advantages outweigh the small point drop immensely.

2. After your first business card it will be easier to get auto approved for the rest of your cards. Most of the issuers will not do a Hard Pull on your personal credit account but your miles may vary for this. After I got my first Chase business card I have not received a hard pull from them and other issuers when applying for other cards.

3. You will have two seperate account username for business cards and personal cards. I recommend calling the credit issuer and asking them to merge everything under your business account so you do you do not have to log in multiple times to check your cards and points.

4. MOST IMPORTANT. Enjoy your business card. Make sure you are able to hit the welcome bonus requirements, enjoy your points, and be smart with that awesome business credit line.

If any of this helped you out feel free to browse my list of favorite best small business credit cards. Congratulations!