1. An Employer Identification Number Is Often Needed
When applying for a business credit card, you may need an Employer Identification Number (EIN). An EIN is a unique 9-digit number assigned by the Internal Revenue Service (IRS) to business entities operating in the United States for identification.
Depending on the issuer of the business credit card, an individual might be able to use their social security number. It is generally recommended that when you form a business, you should get an EIN so that your business is an identifiable entity. That will be especially useful come tax time.
2. Businesses Have Credit Reports
Just like individuals, businesses do have credit reports. With an EIN, it is even easier to track the credit history of your business. The establishment of your business’ credit report with a business credit card is important. You will be able to position your business for the best loans, deals, and insurance plans with a strong business credit report.
The common items tracked on your business credit report includes business registration details, business operations data, industry classification, public filings, payment history, and number of accounts. The common credit-scoring scale used for business credit cards is 1 to 100, with 100 being the best possible score.
When it comes to checking your business credit report, the common tools to use are Dun & Bradstreet CreditSignal and Experian Business Credit Report.
With Dun & Bradstreet’s tool, it is a free service that allows you to monitor changes to your Dun’s & Bradstreet score and rating to help ensure you have the latest business credit information on your company. Dun & Bradstreet also offers premium services known as CreditBuilder Plus and CreditBuilder Premium, which give you full access to your credit report.
With Experian’s tool, it is a premium service that allows you to view your Experian business credit score, alerts you when your credit file changes, and will enable you to understand better what factors affect your business credit score.
3. A Personal Guarantee Might Be Required to Get a Business Credit Card
When you are a new business and do not yet have an established business credit report, you may have to do a personal guarantee to get a business credit card. A personal guarantee is a provision that states that the individual applying for the business credit card is liable for payments and fees for the card.
The issuer of a business credit card may require a personal guarantee to protect themselves further and make sure that your business credit will be held accountable by a real person in the case of any late payments.
4. Business Credit Cards Offer Rewards and Benefits
Like personal credit cards, business credit cards offer rewards and benefits. You can earn rewards such as cashback, airline miles, and hotel points. There are benefits such as sign-up bonuses, purchase protection, and travel protection. Common websites to use to find the best business credit cards for your needs include WalletHub, The Points Guy, and NerdWallet.