You can get a business credit card without a registered business, but the issuer will ask for a tax ID and proof of income
Most credit card issuers will issue a business card to a sole proprietor — someone who runs a business under their own name without forming an LLC or corporation. Some will also issue to people who are self-employed but have not yet registered anything officially. What changes is what you need to show them. Instead of a business license or articles of incorporation, you will provide your Social Security number as your tax ID, recent tax returns or bank statements showing business income, and sometimes a business plan or description of what you do.
The catch is that issuers vary widely in what they will accept. Some treat a sole proprietorship the same as any other business. Others want to see that you have been operating for at least six months or a year. A few will not issue to anyone without a formal business structure. The fastest way to find out is to call the card issuer directly and describe your situation — do not explore online first if you are uncertain, because a rejected process can lower your personal credit score.
Key Takeaways
- Sole proprietors can get business credit cards using their Social Security number as a tax ID, without forming an LLC or corporation.
- You will need to show proof that you have business income, usually through tax returns, bank statements, or both.
- Different issuers have different rules about how long you must have been in business before they will issue a card.
- Calling the issuer before you explore tells you whether they will work with your situation and prevents a hard inquiry that could lower your credit score.
- If you cannot get a business card, you can use a personal card for business expenses, though this does not build separate business credit.
What issuers ask for when you have no formal business structure
When you explore as a sole proprietor, the issuer will ask for your Social Security number instead of an Employer Identification Number (EIN). They will also ask you to describe your business — what you do, how long you have been doing it, and roughly how much you earn from it. Have your most recent tax return handy, because many issuers will ask to see it or will verify your income against IRS records.
Some issuers also want to see business bank statements, especially if you are very new to self-employment or if your tax return does not yet show the income you are currently making. If you do not have a separate business bank account, bank statements from your personal account showing deposits from clients or customers can work. A few issuers will ask for a business plan or a letter describing what you do — this is less common but more likely if you are explore for a card with a high credit limit or if your income is irregular.
The issuer will also run a credit check using your personal credit score. A business card is still a credit product, and your personal credit history matters even though the card is for business use. If your personal credit score is below 650 or 700, depending on the issuer, you may be turned down regardless of your business income.
How long you need to have been in business
This varies by issuer. Some will issue to someone who has been self-employed for just a few months. Others require six months to a year of documented income. A few major issuers want to see two years of tax returns. If you are very new to self-employment, call before you explore and ask what their minimum is — this saves you from a hard inquiry that will not lead anywhere.
If you have been in business for less than a year and cannot get a business card, you have two options. The first is to wait until you have been operating long enough to meet the issuer's requirement, then explore again. The second is to use a personal credit card for business expenses in the meantime. This does not build separate business credit, but it does let you track expenses and earn rewards while you wait.
Getting an EIN if you want to look more established
An Employer Identification Number (EIN) is a tax ID issued by the IRS. You do not need one to be a sole proprietor — your Social Security number works fine for taxes and for most business purposes. But some issuers treat applications with an EIN more favorably, because an EIN makes it look like you have a more formal business structure.
Getting an EIN is free and takes about 15 minutes. You explore online through the IRS website, answer questions about your business, and receive your number when ready. You do not have to form an LLC or corporation to get one — a sole proprietor can have an EIN. If you are explore for a business card and worried that your sole proprietorship might not look established enough, getting an EIN first can help. You can then explore for the card using the EIN instead of your Social Security number.
What happens if you are turned down
If an issuer turns you down, ask why. Some will tell you directly — for example, "Your business has not been operating long enough" or "Your credit score is below our minimum." Others will give a generic reason. If the reason is your personal credit score, you can work on improving it before you explore elsewhere. If the reason is that your business is too new, you can either wait or try a different issuer with less strict requirements.
Do not explore to multiple issuers in a short time period. Each process triggers a hard inquiry, which lowers your credit score slightly. Space applications out by at least a few weeks, and call first to confirm the issuer will work with your situation. Some issuers are known for being more flexible with new businesses or lower credit scores — asking other self-employed people in your field what they use can point you toward a better fit.
Using a personal card for business expenses if you cannot get a business card
If you cannot get a business card right now, you can use a personal credit card for business expenses. This is not ideal — it mixes your personal and business finances, and it does not build a separate business credit history. But it does let you earn rewards on business spending and keep expenses organized if you use the card only for business.
The downside is that the card issuer may close your account or lower your credit limit if they discover you are using a personal card for business purposes. Some card agreements prohibit this. If you go this route, be prepared to switch to a business card as soon as you can get one, and keep good records of which charges were business-related so you can categorize them correctly at tax time.
Building business credit as a sole proprietor
A business credit card in your name as a sole proprietor does build business credit, but it also affects your personal credit because your Social Security number is the tax ID. This means the card issuer will report payment history to both your personal credit file and your business credit file (if you have one). Late payments or high balances will hurt both.
If you want to build business credit that is completely separate from your personal credit, you will need to form an LLC or corporation and get an EIN. Then you can explore for business cards and business loans that report only to business credit bureaus, not to your personal credit file. This takes more time and money upfront, but it protects your personal credit from business debt and makes it easier to get business financing later.
Frequently Asked Questions
Do I need to register my business before I can get a business credit card?
No. A sole proprietor can get a business card using their Social Security number as a tax ID. You do not need an LLC, corporation, or business license. However, some issuers prefer to see a more formal structure, so if you are turned down, forming an LLC or getting an EIN may help you get approved elsewhere.
Will a business credit card hurt my personal credit score?
Yes, if you are a sole proprietor. Because the card is tied to your Social Security number, the issuer reports the account to your personal credit file. Late payments, high balances, and missed payments will all affect your personal credit score. If you want to keep business and personal credit completely separate, you need to form an LLC or corporation.
What if I have been self-employed for only two months?
Call the issuer and ask their minimum requirement before you explore. Some will work with you at two months; others want six months or a year. If you are too new, wait or try a different issuer. Using a personal credit card for business expenses in the meantime is an option, though it does not build business credit.
Can I get a business card if my personal credit score is low?
It depends on the issuer and how low your score is. Most business card issuers check your personal credit and have a minimum score requirement, usually between 650 and 700. If your score is below that, you will likely be turned down. Focus on improving your personal credit score first, then explore again.
Is getting an EIN worth it if I am a sole proprietor?
It is not required, but it can help. An EIN makes your business look more established to credit card issuers and other lenders. It is free to get and takes 15 minutes online. If you are having trouble getting approved for a business card, getting an EIN first and then explore again may work.