Recently there has been a bang in Business credit card signup offers. There was a 150k Targeted Platinum Card, as wells as a 100k offer. Currently there is a 40k American Express Platinum card offer. There has also been, as well as still available the Chase Ink cards, now at 60k instead of 50k. The question everyone has is, “how does a business card effect my credit score”?
Can I get a business card without a EIN number?
Yes. You are able to use your social security number instead, just indicate that it is a sole proprietorship.
Do I need to own a business to get a Business Credit Card?
This borders a fine line of ethics. Some say if you don’t have a business then you cannot open a business card. Others maintain that as long as you are doing business then you can open a business card. They go further and say that even selling a few items on eBay would be a valid business.
We maintain that applying for a business credit card without operating a business is fraud. We do not advise to open a business credit card if you do not have one.
Business cards have a very big benefit over personal cards. A business cards spending doesn’t get reported to the credit bureau. Your credit utilization will be lower.
What are the benefits of a Business Credit Card?
- Many business cards offers employee cards. This gives a separate card number for each card holder. Tracking employee spending is a breeze. In your account, there will be a separate tab for each employee.
- Keep your personal and business expense separate. When you have only one credit card all of your purchases get mixed together. Having an exclusive card for business purchases separates it.
- Organized financial statements. Banks tend to give out quarterly notices, and reports.
- Business card have extra bonuses in categorizes that consumer cards never have. Some examples are the 5X in office stores, or on advertising.
- Extra signup bonuses!
Is that all?
NO! The biggest benefit is the effect, or lack of effect on your credit score. The credit utilization on a business card doesn’t effect your personal score. You want to keep your credit utilization low, as we discussed here.
A business card has many benefits. It will impact your credit score and make it better, by lowering your credit utilization, additionally give better rewards, and make employee spending easy to track.