The Mega Business Credit Cards Thread

Hello FW,

There has been much mention of the benefits of having business credit cards strewn throughout the board. I'd like this to be a place to answer the questions, reaffirm the assertions, and debunk the myths.

Introduction:

For some time business credit has been known to be one way for an FWer on an AOR to:

(1) Increase the number of cards allowed by an issuer.
(2) Hide balances because often times business cards do not report their balances on your personal credit report.

Ofcourse some have mentioned that one should have a legitimate business purpose before applying for these cards. It would seem the investment of 0% BT money is in and of itself a legitimate method to make money, and with minimal filing (sole proprietor), and perhaps an inexpensive license (if required) for your industry you can be off and running.

Strategy:

One of the most attractive features of the business card is the ability to carry balances that do not reflect on your personal credit report. This sounds great, but how is this achieved? If these cards don't report balances on your credit report, do they report anywhere? What I am sure of is there are at least two bureaus known to focus on business credit; Duns & Bradstreet (DnB) and Experian Business. I would personally like to know more about how business credit is reporting. It's dangerous to suggest to the community that business credit is a mysterious phantom balance, suggesting you could go hog wild with utilization. Some questions that would help our understanding:

(1) How do these bureaus function? Do they track balances, CLs, or just note open tradelines?
Do they track a business by it's EIN/TIN, or short of that use your personal SSN#?

(2) For those of you who only use your SSN# in business Apps, have you experienced these cards reporting on your personal credit? If so which cards? Which cards don't report balances anywhere if you do this?

(3) For those of you who have business cards, do these cards tend to monitor your personal credit with soft pulls? Do they monitor these business bureaus with soft pulls? Which cards have you seen monitoring where?

(4) Is it more permissible to carry higher balances on business cards without "adverse reaction?" My hunch would be yes, as businesses are more likely to be using the cash for money generating purposes, and not frivolous spending.


I am hoping for a brisk discussion from you business users out there, particularly you users who are using these cards for short term financing. I will keep the Summary up to date.
Thanks. Whatever happened to Supercreditman by the way? Would love to hear him chime in.

Edit: Link archived biz credit card thread '04-'05

please link the old threads
http://www.fatwallet.com/forums/arcmessageview.php?catid=52&threadid=240545

The link SIS mentioned was archived. This type of info will be quite useful. Most real business cards don't report to personal CRAs, even if you PG it, from what I hear. I want to build some business credit when I do my next AoR, so I will want to have some biz cards that report to DNB & Experian Biz. There is alot of business discussion over on creditboards, and supercreditman is a regular there. If it is true that biz inqs arent as detrimental to you as personal inqs, I will apply for a new biz card every day ! Also from what I read, biz scores are based on payment timeliness, and that's all! You can get extra points if you pay early (Which I always do) Each day late you pay, and based on the percentage of that payment compared to all payments due, your score goes down. 80 seems to be the standard score for paying ON TIME. DnB is known to red flag files, and try to extort money from you.

If you have a question, just ask. Your question is valid. However, self label it as "The mega ... thread"?

Umm I did just ask. I can see now why people get in fights online (this is really the first time I'm posting in any forum), because first someone assumes, then someone else is offended, and it usually goes back and forth.

In this case (I'm guessing, because I wouldn't want to assume) you seem to think by mega thread I'm saying something grandiose about myself, or my post. That is an assumption, because that in no way was that where I was coming from. All I meant by "Mega," was in hopes that this topic of business cards would get a strong treatment, and contributions from those who know, thereby becoming a solid thread on the subject. SIS pointed out a thread that I hadn't come across, and I have been reading threads here for a while.

1. Most business owners use business cards for business purposes and personal cards for personal uses, it is basic practice for accounting, and for keeping the liability seperate.

A good basic; but I was aware of that.

2. Your questions have nothing to do with the pro and cons of each business cards, or strategy for applying for business cards for business use.

On the first count, I didn't ask the question because, returning to my original concept of "mega-biz card thread," I just thought people would maybe answer the questions given, and in addition offer what wisdom they have on the subject, be that pros cons of each card or whatever they know. On the second part I don't even know where you're getting that. My questions are for the purpose of getting more information with the eventual goal of attaining business cards "for" business use. I'm not asking posters to tell me which cards to get, I just want a clearer understanding of how the system works to guide me in my own planning and decisions.

3. Yes, some people would apply for business cards for personal use, and that's what your questions are about.

Really I don't know why you think this, is it because I ask so much about personal credit? If you're going to be certain you have someone's "number," so to speak, you really better be right, because you risk offending someone, and embarassing yourself. I can see why people lurk now, open your mouth around here and risk being told what you mean.


Edit: BTW thanks for the summary PolarDude

Grobe said: If you want to title a thread a "mega" thread, it is your responsibility to do a comprehensive search of existing FW threads and consolidate the existing information, as well as (in this case) adding information about the major business credit cards.

Guys stop arguing....is this forum for discussion or for ego clashes...damn

How do these cards determine size of credit lines? Is it by actual business income?

I have household income > $100K and some large personal credit lines, but my actual business income is small, < $3000.

Is there any point applying for these, or will the credit lines be too minuscule to bother?

PolarDude said: I have seen approvals where 0 is put in the biz income line. Some banks may even be more generous, because biz laws allow them to be more aggressive with the collection tactics used. Usually up to $50k w/o having to see financials.
I plan on applying for most of these in my next AOR, so I will be sure to document my experience. I may not be ready for another 6+ weeks

Good luck I will be watching. I plan on doing a business-heavy AOR in a few months...

those who already have a Capital One business credit card, can you tell me how much CashBack you can redeem for the miles? i don't want plane tickets, i really just want CashBack. i'm interested in the "Capital One Business Platinum with Preferred No Hassle Miles" card. say if i accrue 2000 miles, is that redeemable for $20 CashBack (so essentially a 1% CashBack), or 2000 miles is only $10 CashBack (like CitiBusiness), or ...? and also in what increment can i request for CashBack.

thanks in advance for the info! ( no one at Capital One seems to be able to tell me, they kept transferring my call from new enrollment, to customer relations, to the miles/rewards dept, back to new-enrollment. still no one could answer my question because i'm not an existing customer, they couldn't look it up with an acct number. :\\ )

What are the tax implications of using biz cards for personal use. In about a years time im considering dumping my 2nd mortgage at 9% to an AOR(hopefully near 0%). Being able to tap into a biz line would be useful to get to the level I would need to fully pay off the 2nd.

Anyone know of this is illegal in any way? I would obviously pay it it back, but not sure what the legalaties of that are. For reference, I do consulting work as an S Corp(single employee). I asked my accountant but she was thrown off by the question(i.e. I don't think she could comprehend the usefulness of an AOR).

Glitch99 said: nesian said: What are the tax implications of using biz cards for personal use. In about a years time im considering dumping my 2nd mortgage at 9% to an AOR(hopefully near 0%). Being able to tap into a biz line would be useful to get to the level I would need to fully pay off the 2nd.

Anyone know of this is illegal in any way? I would obviously pay it it back, but not sure what the legalaties of that are. For reference, I do consulting work as an S Corp(single employee). I asked my accountant but she was thrown off by the question(i.e. I don't think she could comprehend the usefulness of an AOR).

It is a debt on the business financials, and gets repaid from business cash flow. Then you have to get it into your personal funds to pay off your mortgage; either as a dividend (which would create a tax liability) or as a loan which you then have to repay to the Corp. But I'm not sure if there are any rules regarding S-Corp loans to shareholders. Its not illegal, you just have to respect the separation of corporate and personal funds. I'd think that would be a pretty basic question for an accountant to answer.

Thanks for the response glitch. Yes, my accountant basically said to pay it back ASAP... She basically raised an eyebrow when I said I did this. It sounds like if I treat this as a loan in a tax year and dont carry a balance from year to year I should be fine.

nesian said: What are the tax implications of using biz cards for personal use.

That's basically a loan from the company. If less than $10K and/or less than a year, not a big deal. (I think: IANAL or accountant, just a small business owner.) If more, you should sign a loan agreement with definite repayment terms and a "market" ("arms-length") interest rate. If you try to charge no or below-market interest rate (with over $10K or more than a year), the IRS "imputes" an interest rate. Google "imputed" or "Applicable Federal Rate" (AFR) or "below market" loans / interest.

A good accountant may not appreciate AOR but they should understand loans to/from a company.

i just received a mailed solicitation for CitiBusiness (no fee, 1-year 0% BT)

the offer was for $100 Home Depot Gift Card after purchase of $300. There is no code and may be just targeted but i figure you have nothing to lose by calling it in at this advertised #:

866-471-5650

desimond said: i just received a mailed solicitation for CitiBusiness (no fee, 1-year 0% BT)

the offer was for $100 Home Depot Gift Card after purchase of $300. There is no code and may be just targeted but i figure you have nothing to lose by calling it in at this advertised #:

866-471-5650CitiBusiness always has a 10k (or 15k) ThankYou rewards points bonus deal, and you can convert 10k points into many different $100 gift cards, including Home Depot. No minimum purchase required either, you just have to make one to get the bonus.

Fellow191,

I have been working my tail off to make fiscal ends meet. Do you have questions to ask me? I still check in FW but am too busy to stay on all day, so I don't know what's going on.

SCM

How does D&B fit into this? Helpful to get large lines? I went over to Creditboards and it was madness... very difficult to figure out. They are all trying to do something different anyway, getting $1k cards with Circuit City, etc., with no promotions. What I want is to get huge business card lines with BT or bonuses. How do I go about doing this when nothing even reports? Just get a high revenue to report? Without reporting much revenue I am getting $5k+ cards but hey I want $25k, etc. In any case, is there anything to stop you from starting an LLC for each thing you do and getting mad business credit for each LLC?

PolarDude said: The creditboards people know what they're talking about. All the info is in there, you just gotta spend time going through it all. If you buy D&Bs credit builder, you can add trades quicker than if you do it manually getting easy accounts, and waiting 3-4 months for a paydex. I may buy creditbuilder for my corp it is a flat fee to add the trades. Basically D&B charges you to do things the other CRAs charge the creditors to do. D&B lets you report tradelines as well for people, but I don't know the cost, and the details on how that works.

Good advice, though I skipped that and focused mostly on building my score/history with Experian Biz Credit. With just two biz accounts (Staples and OfficeDepot - the easiest to get with no biz history and no PG) I managed to get my score up to 91. I have no doubt it helped a little with some of the business cards I applied for (Citi, Chase, BOA, AMEX) during my January AOR, since I saw some inquiries on my Experian Business file.

You can monitor your EX Biz file and score for $12.95/month - http://www.smartbusinessreports.com/pdp.aspx?pg=Sample&sv=1&link=5002&hdr=PP

Since then, I've applied for ExxonMobil, Valero and WalMart business cards (non-AMEX/MC/Visa) to further build my business credit. It'll get to a point, after several years, and with high enough CL's reporting on my EX Biz file, that I could possibly get a major credit card without the need for a hard pull on my personal credit (PG may or may not necessarily be required).

traker1001 said: nesian said: What are the tax implications of using biz cards for personal use. In about a years time im considering dumping my 2nd mortgage at 9% to an AOR(hopefully near 0%). Being able to tap into a biz line would be useful to get to the level I would need to fully pay off the 2nd.

Anyone know of this is illegal in any way? I would obviously pay it it back, but not sure what the legalaties of that are. For reference, I do consulting work as an S Corp(single employee). I asked my accountant but she was thrown off by the question(i.e. I don't think she could comprehend the usefulness of an AOR).

I have this same question, Except with an LLC. Are the answers that I have read rellativly the same for an LLC?

I heard different opninions, but I believe it's legal, the corp would "loan" you the money, and would have to be paid back, with interest.
If you borrow for more than a year, it may be considered a distribution, and you'd be taxed. I'm sure there are ways to keep it going for longer than a year with documentation. If you do your own taxes, having some accounting knowledge would help. If your accountant doesn't know, you should find a more experienced one. I have a friend taking an accounting class, and will do my taxes for free, so I can save. Quickbooks is useful as well.

Pyro123,

I think most, if not all, of the professional cards report in personal credit reports, and therefore are actually personal cards that are advertised in the business part of the bank websites.

SCM

pyro123 said: Another question

Is there a business card that doesnt pull experian? i know Citi Business, AMEX, Chase, Discover cards do. Is there anything left? gee.

I recently applied for Advanta Business, CitiBusiness, and CitiBusiness Premierpass, and all 3 pulled from Transunion only. I've heard what state you live in can impact which bureau is pulled. All I know is that probably the last 8-9 cards I've applied for (including Citi, Chase, WAMU, AMEX) have only pulled from Transunion.

Sorry but here is another question which is appropriate for this forum

I read that business BT are only available between other business balance accounts and cant transfer from personal credit card accounts. Or is this policy applies only to certain brand business cc? if so which one allows personal BT?

Dus10 said: 1) Open Business checking and savings accounts (must have a high-yield savings, could someone enlighten me about the availability of such for businesses?).

ING Direct Business Savings