- Improve Your Business Credit by Applying For a Business Credit Card
Are you still using your personal credit for your business?
- One of the most underestimated items you can have in your credit arsenal is a business credit card. Many people do not choose to
apply for a business credit card because they do not understand its positive long term impact on their business credit score and
therefore on their overall business image. They use their own credit to start the business and wait until they need to get a bank loan
to try and get credit in the business name. Even though a business credit card has more requirements compared to other types of
credit cards, it can be very helpful if used properly.
Using personal credit for early business needs wastes the early years when you should be building your business credit slowly and
negatively impacts your personal credit by showing large debts on your personal credit report that are not identified as actually
belonging to the business. Large balances hurt your personal credit score.
Business and personal credit are tightly tied together from the lenders perspective (link to Free business credit seminar). It is critical
to keep them separate. A good personal credit score will help you get your business credit cards and other accounts. But business
credit is not built overnight. It takes at least a year to properly build your business credit. If you apply for business credit cards when
you first create your business entity you will reduce the need to use your personal credit for smaller expenses and you will start to
build that good business credit reputation right from the start.
How is a business credit card different from personal credit card? Basically, business credit cards are for business use only. The main
difference is that compared to the personal credit card, a business credit card will have a higher limit, usually $25,000 or more. You
will need to personally guarantee a business credit card, but that card will not show up on your personal credit report.
A business credit card helps your new business by extending payments while improving the cash flow. Depending on the card you
choose, a business credit card may also bring a lot of automatic benefits. Business credit cards offer detailed spending reports and
give quality customer service. A business credit card also provides many alternatives and numerous credit options for small
businesses, like a line of credit. Customized company logos and access to instant cash are available when you access your account
online. Most business credit card applications offer no fee for the first year and no pre-set spending limit or finance charges, and
even free cash advance checks. Other business credit card offers membership reward programs that enable the member to earn
points towards travel, merchandise and other rewards for the business.
It is important to learn all you can about how to build business credit properly so you can grow your business credit while protecting
your personal credit.
Credit Article by Linda Adams - The Clean Credit Queen
Good Day and Good Credit
- Learn more about business credit - how to start it and how to use credit to ignite the growth of your business!
Sign up for the FREE Business Credit Teleseminar - Click here for more details
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Linda Adams, The Clean Credit Queen is not a registered investment advisor and the information provided on this website should be considered educational in nature, but it is not a substitute for legal or professional financial advice. If you believe you need the help of a Certified Financial Planner or other investment counselor, please seek a qualified professional. |
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