Can I obtain a business credit card without being personally liable?

Business credit cards and personal liability

A great majority of business credit cards will hold the business owner personally liable for debts accumulated by making business purchases with the card. When you apply for a business credit card, you will have to apply using both your Social Security Number and the Tax ID, or Employer Identification Number (EIN), number for the business. Note: In some cases, your Tax ID and your Social Security Number are the same, such as with some sole proprietorships.

Because a potential cardholder is personally liable and must include his or her Social Security Number with the application, his or her credit report will usually be checked much like with an application for a personal credit card. However, it is important to note that the many business credit card accounts don’t show up on personal credit reports.

In summary, the issuer of the business credit card will often check a potenital cardholder’s credit report to verify identity and also to check credit history in order to determine whether or not to extend credit.

But if approval is granted, the business credit card may not show up on the cardholder’s personal credit report. Thus, although the business owner will usually be personally liable for debts accumulated with the card, the card’s history will not usually affect his or her personal credit score, whether positively or negatively.

However, some business credit card issuers will report the credit bureaus if a cardholder misses a payment or does something else deemed negative within the provisions of the cardholder agreement.

Keep in mind that all business credit cards are a bit different, and policies, terms and conditions will vary from issuer to issuer, so be sure to thoroughly look over the terms and conditions for each specific business credit card before applying.