Business Credit Cards

[markvert]

I am a small business owner and my company is set up as an S -Corp. When I ran my recent personal credit report several months ago, I learned that this business credit card was not on my personal credit score. This really surprised me, but I thought this might be a good thing because I was also building business credit seperate from personal credit. I had a balance of approximatlety $4,000 on this Delta American Exprees Business card and had a credit limit of $18,000. Earlier this week AMEX called me and told me that they were cutting my credit limit from $18,000 to $4,800 due to revolving credit card debt on my other personal credit cards??? Now I am confused, is this business credit card effecting my personal credit and vice-versa? Why then is this business credit card not showing up on my personal credit report?

I am wondering if there is any real benefit to having a business credit card vs. a regular credit card for a small business owner. I have both to keep expenses seperate, but I am wondering if I might be better off just getting the best credit card that I can get at the lowest rate and just use one for business. Is there any real advantage to having a specific business card? I know that I pay $150 a year for the privledge of having this Delta Amex. The miles are nice, but I really kept it open because I thought the high credit limit was helping me establish better business credit. Now, I am not seeing much value in this card and it makes me want to pay it off and shop around.

I appreciate any advice anybody can provide.

Mark

[mik]

if you had used another business credit card for your personal expenses Amex could not have used this reason to reduce your CL, because they would not know when checking your credit report. That is the main advantage of business credit cards. I would suggest you get the best credit card instead of keeping this card.

[ilyab0dner]

A true business credit card is a line of credit that is taken in the name of the business, under the business' credit. Activity, whether good or bad, is reflected on your business' credit report through D&B and other financial institutions, and the liability for any debts incurred and bills owed is with the business.However, some companies out there offer "business" credit cards which they require a person guarantee for. These institutions will often ask for a personal guarantee, and will almost always ask for a social security number from the person applying for the card. If this is the case, the credit card is not a business credit card, but is simply a personal credit card which is used for the business. The business is not liable for bills and debts - you are.When applying for a credit card for your business, watch out for areas asking for your SSN (and not your TaxID or EIN) and be wary of any credit card that asks for a personal guarantee. By ensuring that your credit card is in the name of your business, you can help to build your business' credit, while avoiding creating problems with your own.


Many companies offer a list of credit cards that are issued under the business name only. Those lists typically run $300-$900, depending on the quality of the information inquiring. I would suggest starting your search online via google or yahoo. Search for "strong business credit" (just like that in quotes) to find services that sell the information.


Good luck,

Ilya Bodner
Small Business Owner
Initial Underwriting Group

[optomos]

Sounds like they were worried that you might default when they looked at your personal credit standing. Like mik said, the main benefit of the business card is to hide debt. I have 3; Citi Business, Amex Platinum and Advanta, though I don't consider Advanta a good business card nor am I using it for such. I used all of them for a BT promo or o% promo to reduce my private student loan balance and to buy equipment for my business. None of them show on my report and the promos from each one allowed me to keep my utilization low on my personal credit, which helped me improve my scores.

If you want to create a credit history for your business then you should look into dnb.com for "small business owners". Other than that, get a venture capitalist to invest in your business; if you want to sell your soul

[Polonius]

Perhaps that Delta card was worth the $150/year fee because of its high limit for you, but with a $4800 limit it's not worth it today.

AmEx is reducing the credit limits for many of its cardholders, both business and personal. Don't take it personally--it's a business decision by AmEx to basically exit this market.

AmEx can see all the cards it issues directly, including your business and personal cards. But others checking your personal credit won't see the business cards. And when you apply for a business card, your personal credit is almost always checked as well, since for almost all business cards you're personally liable for the card as well as your company.

[expertcredit09]

I think Ilyadodner's advice is very good.Thanks for your thread.It is useful for me.

[pettersean]

Sounds like they were worried that you might default when they looked at your personal credit standing. Like mik said, the main benefit of the business card is to hide debt. I have 3; Citi Business, Amex Platinum and Advanta, though I don't consider Advanta a good business card nor am I using it for such. I used all of them for a BT promo or o% promo to reduce my private student loan balance and to buy equipment for my business. None of them show on my report and the promos from each one allowed me to keep my utilization low on my personal credit, which helped me improve my scores.

If you want to create a credit history for your business then you should look into dnb.com for "small business owners". Other than that, get a venture capitalist to invest in your business; if you want to sell your soul

leaving him to juggle business expenses on his personal cards... Accepting Credit Cards

_________________
Letterhead printing