7 Mistakes to Avoid When You Apply for a Business Credit Card

It’s time to review those costly errors that can damage our personal credit scores as well as put our personal assets at risk. Now I know applying for a business credit card may not be the most exciting thing to do but it’s necessary and requires your careful attention.

As with the last time we covered the six major types of business credit applications, I feel compelled to mention that there are certain mistakes that you should avoid before you sign the dotted line.

So, let’s take a look at seven mistakes that you never want to make that can cost you money, damage your personal credit and put your personal assets at risk.

Apply for a Business Credit Card

(7 Mistakes to Avoid)

1. Not conducting a credit assessment – Before you apply for a business credit card you should be fully aware of where your credit stands on a personal and company level. Get copies of your personal credit reports and scores from the three major consumer credit agencies as well as copies of your business credit files and scores with the three major business credit bureaus.
2. Applying for the wrong type of card – You should understand the primary functions of the card you are applying for including its limitations. Choosing the best small business credit card requires a full understanding of all the types of cards that are available.
3. Failing to read the fine print – Just because a business credit card offers all kinds of special perks and rewards doesn’t mean it’s necessarily the best card. Always read the fine print so you completely understand the terms and conditions of the credit card agreement.
4. Chasing teaser rates and special offers – While promotional offers like a no-interest promo look really attractive most of them come with strings attached. Make sure you understand what conditions must be met and how long your teaser rate stays in effect
5. Applying for the wrong business credit card – To protect your personal credit you should apply for cards that report your payment experience solely to your business credit files.
6. Providing a personal guarantee – You can avoid a personal guarantee with specific credit card issuers if your business has established strong business credit files. You can also avoid supplying a PG with certain secured business credit cards.
7. Applying for too many cards – Be selective on which cards to apply for because too many inquiries on your business and personal credit files can raise a red flag with creditors as well as negatively impact your personal credit scores.

So the next time you apply for a business credit card pay close attention to what you’re signing up for. Don’t get caught making mistakes that can now be easily avoided.

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About the author

Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. A business credit solutions membership helping business owners build small business credit. He is a business credit blogger for AllBusiness.com, a subsidiary of Dun and Bradstreet and author of “Eight Steps to Ultimate Business Credit” and “How to Build Business Credit with No Personal Guarantee.” His articles and blogs have also been featured in American Express Small Business, Business Week, The Washington Post, The San Francisco Tribune, Scotsman Guide, Alltop, Entrepreneur Connect, and Active Rain.