Small Business Credit Cards for home business entrepreneurs allow you to use your personal credit to begin building your business credit history.
Most consumers are familiar with the Big Three credit reporting agencies: Experian, Trans Union and Equifax. Lesser known outside the corporate world are the credit reporting agencies for business credit: Dun & Bradstreet and the Small Business Financial Exchange (SBFE).
Use Your Personal Credit History
Most credit card issuers allow you to use your personal credit history to obtain a business credit card. Of course it is always recommended that you know your credit score (link to article Why You Should Know Your Credit Score) before applying for any type of credit, credit cards included.
As you might imagine, getting information from some of the credit card issuers is a lot like pulling teeth. Some provided information freely and thoroughly while others provided a little less.
The following companies issue small business credit cards (link to Business Credit Card Ratings on another site will open in a new window) based upon your personal credit history.
- Advanta
- American Express
- Chase
- Citibank
- Discover
Building Your Business Credit History
Some small business credit cards will NOT help you build a business credit history. That seems strange, doesn't it? It is as if those cards are "business" in name only.
Citibank, for instance, reports nothing to business credit reporting agencies and only reports negative information to personal credit agencies. (Source: Phone call to Citibank last week of February 2007).
American Express does report to a "business credit bureau" about once a year. They report positives and negatives (default or collections) and also report the same information to your personal credit history. (Source: Phone call to American Express last week of February 2007).
Chase reports both positive and negative information but cannot disclose to whom they provide the information. They provide the same information to your personal credit bureau. (Source: Phone call to Chase March 1, 2007).
Discover reports both positives and negatives to Dun and Bradstreet and may report both to your personal credit history, but not always. (Source: Phone call to Discover last week of February 2007).
Advanta reports positives and negatives to both Dun and Bradstreet and the SBFE and does not report to personal credit bureaus. (Source: email from Advanta marketing department last week of February 2007)
Business Credit Card Advantage
Establishing and building a business credit history for your home based business can be a very positive step for your future. Business credit cards certainly provide a way for you to keep your personal and business expenses separate for tax purposes.
A business credit history provides a way for you to expand your business in the future. Something to Remember: You are personally liable for payment of your business credit card charges, even if your business goes belly up. So please use discretion in building your business credit history.
Do not over-extend yourself financially and always be sure to pay your credit card expenses by the due date.
http://www.creditcardsforamerica.com/small-business-credit-cards.html links to Business Credit Card Ratings on another site.
Related articles of interest:
Home Business Success Story - Advanta
Why You Need a "Business" Credit Card
Why You Should Get Your Free Credit Reports
Why You Should Know Your Credit Score