Just be careful, because if you default on a business credit card, the issuer can come after you personally - since your personal credit guarantees those cards. That's good news if you run big balances through your business cards, since it won't damage your personal credit score. However, other than this initial credit inquiry, the business line of credit sits separately from your personal credit line, so your utilization ratio and other factors shouldn't affect your personal credit score. That's because these cards are still usually personally guaranteed. Related: What name should I put on my business credit card application? Business credit cards don't sit on your personal reportīusiness credit card applicants typically experience a two-to-five-point hit on their personal credit scores when they apply for a business credit card, since banks generally use your personal credit report to assess your creditworthiness. In most cases, you don't need any paperwork to form a sole proprietorship you become one by simply doing business.īy signing up, you will receive newsletters and promotional content and agree to our Terms of Use and acknowledge the data practices in our privacy policy. If you're starting a small company as a sole proprietorship, you can provide your Social Security number when asked for an EIN, and usually that will suffice. So if you start a small eBay business and want to keep those finances separate from your personal expenses, it would be conceivable that you'd want a small-business credit card. However, many small businesses start as simple DBAs (doing business as), which denotes a business name used by a person or entity different from the person's or entity's true name. Chase is generally the toughest, often requiring proof of your business, including government EIN and business checking account information. Some, like American Express, are very flexible. While you should aim to use your business credit card for work-related expenses, each credit card issuer has a different threshold for what information it requires for someone to get a small-business card. In fact, you might be eligible for a business credit card without even knowing it. This seems to trip up many people who think you need an incorporated business with its own tax ID number or employee identification number, or even a brick-and-mortar store, to apply for a business credit card.
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