Best Small Business Credit Cards
But did you know less than 50% of the credit cards obtained by business owners nationwide are actually in the company’s name?
It’s a shocking reality to say the least but the good news is there are plenty of business credit cards that cater to savvy business owners like you who understand the importance of establishing business credit.
Don’t get me wrong the majority of cards you can obtain for a business have a great deal of benefits such as cash back rewards, rewards points, travel rewards and detailed reports.
But for those of you aiming to strengthen the credit of your business it’s vital to obtain cards that report your payment activity to a business credit agency.
When you apply for the best small business credit card one of the ways to identify a non-reporting issuer is by what’s required on the application. If all you are required to supply is your personal information, social security number, and business name then this card issuer in most cases will solely report to a consumer credit agency.
Take it a step further and simply read the disclosure section on the application. It will read something such as ‘I Authorize the receipt and exchange of credit information on the business signer, including the exchange of information between XYZ credit card issuer and its affiliates.’
Nowhere here does it disclose that the ‘Business’ will be included in the receipt and exchange of credit information; it just states the business signer. (That’s you!)
If this is the case then you should be aware that you will be personally liable for all the debt your company incurs on this card. Furthermore all payments including revolving debt loads will be reported only to a consumer credit agency.
In my opinion this type of business credit card is nothing more than a glorified personal credit card with your company’s name on it.
Now don’t get discouraged because there are cards that may require a personal credit check but the good news is payment activity is reported to both consumer and business credit reporting agencies.
Credit cards such as Spark Business fall right into this category and while it’s not my first choice, at least it helps establish your company’s creditworthiness since it reports to several business credit agencies.
The downfall is your company’s revolving credit card debt is still reporting on your consumer credit reports resulting in a negative impact on your personal credit scores.
Ideally, you want high limit business credit cards that only report to the business credit agencies. Thankfully, there are issuers offering these types of cards despite the challenges in the economy.
But before you get too excited most of these issuers will require a personal and business credit check. The most important thing to remember with these cards only your business credit reports will reflect your revolving debt thereby protecting your personal credit and scores.
Here’s what you need to pre-qualify:
- FICO® Scores greater than 680+
- Less than 50% debt to credit utilization
- No personal bankruptcies
- No excessive inquiries
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About the author
Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for Dun and Bradstreet Credibility Corp, the SBA.gov Community, and All Business.com .His articles and blog; Business Credit Blogger.com, have been featured in ‘American Express Small Business’, ‘Business Week’, ‘The Washington Post’, ‘The San Francisco Tribune’,‘Alltop’, and ‘Entrepreneur Connect’. You can also find Marco on Google+.