Your guide to applying for small-business credit cards

Jan 15, 2021

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Editor’s note: This is a recurring story, regularly updated with new information. 

Small-business credit cards are one of the secret tools to unlocking award travel.

You can double dip to earn twice as many sign-up bonuses and the accounts won’t show up on your personal credit report, so you won’t exceed the 5/24 rule with Chase. And you don’t need to be a large corporation to be eligible. Dozens of enterprises make you eligible for a business credit card, ranging from tutoring to consulting to selling online.

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It’s important for small-business owners to understand the application process to avoid mistakes, which might cause you to be rejected for a card. For instance, you may be thinking about applying for the welcome offer available on The Business Platinum Card® from American Express. Earn 120,000 Membership Rewards® points after you spend $15,000 on eligible purchases with the Business Platinum Card within the first three months of card membership.

Aren’t sure how to fill out the application for a business card? Well, you’re in luck. Today, we’re going to tell you everything you need to know to apply for business credit cards.

Related: Your guide to applying for small-business credit cards

Photo by Hero Images / Getty Images
(Photo by Hero Images / Getty Images.)

In This Post

What’s my business structure?

(Photo by Dickson Lee/South China Morning Post via Getty Images)

If your business has been around for a while and is more formalized, you already know the answer to this question. You may have registered your business as a corporation or a partnership, and you should make sure that the information on your credit card application matches the description you report to the Internal Revenue Service (IRS).

Informal business owners such as eBay sellers, freelancers, tutors may not be familiar with this type of business designation or the paperwork. Most card issuers allow you to apply for business credit cards as a sole proprietor with no paperwork necessary. In most cases, you become a sole proprietor simply by doing business.

Can I use my Social Security Number to apply?

When you apply for a personal credit card, you give the card issuer your Social Security Number (SSN) so it can pull your credit report to determine your creditworthiness. Your business has its own line of credit. However, card issuers still use your personal credit to guarantee the account. That’s why business-card applications generate a new inquiry on your personal credit report, but in most cases the account will not show up on your personal report.

That’s a long-winded way of saying that yes, you will use your SSN on your application for a business credit card. However, you’ll also see an option for a Federal Tax ID Number or Employee Identification Number (EIN). Depending on which card you’re applying for, it might appear differently on your application. For example, American Express® Business Gold Card has a box to input your Federal Tax ID Number, and the asterisk indicates that this is a required field. However, if you select “sole proprietorship” under company structure, this box disappears. Only corporations or partnerships are required to provide an EIN.

The application for the Chase Ink Business Preferred Credit Card also has a field requesting your tax identification number. If you mouse over it, you’ll see that it instructs Sole Proprietorships to use their Social Security Number instead.

(Screenshot courtesy of Chase)

What is an EIN?

If you run a small side business and never plan to grow or hire employees, you can probably skip this section. An EIN and Federal Tax ID Number are the same thing.

You can think of it as a Social Security Number for businesses, which links relevant credit reports and tax filings to the correct organization. Most sole proprietors do not need an EIN (though you should consult a licensed tax professional if you’re unsure).

According to the IRS, you need an EIN if you answer yes to any of the following questions:

  • Do you have employees?
  • Do you operate your business as a corporation or a partnership?
  • Do you file any of these tax returns: Employment, Excise, or Alcohol, Tobacco and Firearms?
  • Do you withhold taxes on income, other than wages, paid to a nonresident alien?
  • Do you have a Keogh plan?
  • Are you involved with any of the following types of organizations?
    • Trusts, except certain grantor-owned revocable trusts, IRAs, Exempt Organization Business Income Tax Returns
    • Estates
    • Real estate mortgage investment conduits
    • Nonprofit organizations
    • Farmers’ cooperatives
    • Plan administrators

Applying for an EIN is relatively simple and straightforward. If you need an EIN to apply for a business credit card, you should be able to complete the paperwork and receive the number within a few days.

Related: Credit Card Chronicles: How a freelance writer and stay-at-home mom maximizes points and miles

Woman entering credit card number into laptop
(Photo by Carlina Teteris/Getty Images)

What business name should I put on my application?

In my experience, this creates the most problems for people. Some people feel uneasy applying for business credit cards, or think that they need to invent a name to use on their application. This is the exact opposite of what you should do.

Related: What name should I put on my business credit card application?

Although you become a sole proprietor simply by doing business, you need to file a “DBA” (doing business as) form to operate under a name other than your own.

For example, I can form a sole proprietorship with the legal business name “Ethan Steinberg” by selling some old books on eBay, but if I want to use the name “Ethan’s Online Bookstore,” I’d need to file paperwork with the government to do so.

Related: How to complete a Chase business credit card application

It is illegal to lie on a credit card application (and claim to represent a business that doesn’t exist). Also, if your application isn’t approved instantly, you can run into real trouble here. Some issuers, especially Chase, will often ask for supplemental documentation verifying the existence of the business before approving your application.

Although I could produce plenty of rent statements and utility bills with my name on them (i.e., Ethan Steinberg, the name of my sole proprietorship), I don’t have any documentation of “Ethan’s Online Bookstore.” In the past, I have known many people who end up getting rejected and wasting a hard credit inquiry because they thought they had to invent a name in order to be approved.

Related: The ultimate guide to credit card application restrictions

Bottom line

Earning travel rewards is all about learning new skills. One of the first times I pushed out of my comfort zone was when I began applying for business cards to support my tutoring side gig in college.

The application for business and personal credit cards is almost the same. However, your answers to questions about business structure, business name and federal tax numbers may determine whether you get the card and points you deserve or end up with a confusing rejection.

The rule of thumb is to keep things simple and to never lie. Your business isn’t a corporation or a partnership unless you specifically set it up as one, and your business doesn’t have a legal operating name different from your own name unless you’ve filed the right paperwork with your state and local authorities. It can be unnerving to apply for a heavyweight card like the Business Platinum without a “real” business name, but this is a far more common occurrence than you realize. When in doubt, consult a lawyer or tax professional about how you structure your business.

Additional reporting by Chris Dong. 

Featured image by Alexi Rosenfeld/Getty Images

The Business Platinum Card® from American Express

Aside from the 120,000-point welcome bonus, Amex recently made huge improvements to the Business Platinum Card, including the fact that you will now earn 50% more points on purchases of $5,000 or more (up to a cap amount), earn 5x on flights and eligible hotels at Amextravel.com and cardholders will receive an up to $200 annual airline fee credit each calendar year (enrollment required).

Apply Now
More Things to Know
  • Welcome Offer: Earn 120,000 Membership Rewards® points after you spend $15,000 on eligible purchases with your Card within the first 3 months of Card Membership.
  • Plus, 0% Intro APR for 12 months from the date of the account opening on purchases eligible for Pay Over Time. After that, your APR will be 14.24% to 22.24% based on your credit worthiness and other factors as determined at the time of account opening.
  • Get 5X Membership Rewards® points on flights and prepaid hotels on amextravel.com, and 1X points for each dollar you spend on eligible purchases.
  • Earn 1.5X points on eligible purchases at US construction material & hardware suppliers, electronic goods retailers and software & cloud system providers, and shipping providers, as well as on purchases of $5,000 or more everywhere else, on up to $2 million of these purchases per calendar year.
  • Unlock over $1,000 in value per year for statement credits on select purchases with your Card, including up to $400 with Dell Technologies, up to $360 with Indeed, up to $150 with Adobe and up to $120 on wireless telephone purchases. Enrollment required.
  • $200 Airline Fee Credit: Get up to $200 in statement credits per calendar year toward baggage fees and more at one qualifying airline.
  • $179 CLEAR® Credit: Use your Card and get up to $179 back per year on your CLEAR® membership.
  • The American Express Global Lounge Collection® can provide an escape at the airport. With more than 1,400 airport lounges across 140 countries and counting, you have more lounge location options than any other credit card on the market as of 9/2021.
  • $695 Annual Fee.
  • Terms Apply.
  • See Rates & Fees
Intro APR on Purchases
See Pay Over Time APR
Regular APR
14.24% - 22.24% Variable
Annual Fee
$695
Balance Transfer Fee
N/A
Recommended Credit
Good, Excellent
Terms and restrictions apply. See rates & fees.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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