| Home | Free Articles for Your Site | Submit an Article | Advertise | Link to Us | Search | Contact Us |
This site is an archive of old articles

    SEARCH ARTICLES
    Custom Search


vertical line

Article Surfing Archive



Fun with Business Credit Cards - Articles Surfing


Business credit holds a lot of promise for small business owners, but comes with some caveats. Before anyone gets too excited, allow me to temper your enthusiasm by saying most business cards are going to be based primarily on your personal credit scores for companies with less than 1 million dollars in revenue. If you are just starting out, then your personal credit will almost certainly be the prevailing factor as far as you getting approved.

For the beginner, your jaunt into the business credit realm starts with Dun and Bradstreet, the business credit bureau. Experian also has a smaller business directory as well, but D & B as they are called is king. The first thing you need to get is a DUNS number. A DUNS number is needed for any business to report, and the number is free.

Your goal is to get a Paydex score. A Paydex is a business FICO that ranges from a low of 0 to a high of 100. The goal is a score of 80, which equates to a 700+ FICO. Beware of the hard sell for credit builder. The reps will call and send emails incessantly trying to get you signed on for this credit builder program. They'll tell you that you only have a marketing file and you absolutely have to buy this program. The fee for the program will change from the $700 range to the $200 range and everywhere in-between. The truth is that companies report automatically, you can easily get a Paydex score for free, and the hefty commission for hawking the credit builder product is the motivation for the reps. In general, you need 5 companies to report to get a Paydex.

Credit scoring is also different than personal scoring. The main variable is how soon you pay something off. If you buy something and wait 30 days to pay it, your score will be lower than someone who pays it off in 5 days. Larger accounts count more than smaller accounts, so someone with a 100k balance will get more points for paying it off than someone with a 5k balance.

Finding companies to report is fairly simple. Start with the basic office supply companies like staples, office max, office depot, and Viking. They give easy credit to just about anyone and report. Wait roughly 45 days for these companies to report.

Once they report, move up to the Home Depot, Lowes, and Dell level. These are slightly harder to get credit from, as they typically want to see a few positive trade lines first. Again, wait the requisite 45-60 days for all these companies to report before moving up to the next level: general use credit cards.

Getting a general use, regular credit card is much harder. Many companies look at both your personal and business credit scores, although some may only need to glance at your business scores to get an approval. Citibank generally will give you a general use card if your business credit file is strong enough. I personally got approved for three business cards with CITI and only had to endure one credit pull.

Advanta offers really great business credit card offers, with a lengthy promotional APR period, low rate afterwards, and overall very favorable terms. The flipside is that Advanta is also one of the most picky credit issuers, and they base much of their approvals almost entirely on your personal score. If you have any personal credit woes, you'll probably be declined, and this includes having more than 6 inquiries in the last 6 months, too many new accounts, or balances that are too near their limits.

There are two major benefits to having business credit cards. First, they don't report to your personal credit, unless you default, so expenses you may have bore that made you appear to be more risky or close to your credit limits will not show in the future. Secondly, many business cards come with travel and other rewards programs for gifts, concert tickets, or healthy cash back percentages.

For success, make sure your personal credit is clear, and follow the tips listed above. It doesn't take that long to build a business Paydex of 80, probably only 4-6 months at the most.

Submitted by:

Chris McCullough

Chris McCullough is the founder of CreditcardSuperstar.com, a credit card shopping service which allows consumers to shop, compare and apply for low interest rate credit cards online. The leading site offers over 75 different credit cards from Discover, Chase, American Express and other top banks and financial institutions. A free report on how to get the best credit card and avoid common mistakes is available at http://www.creditcardsuperstar.com.



        RELATED SITES






https://articlesurfing.org/business_and_finance/fun_with_business_credit_cards.html

Copyright © 1995 - Photius Coutsoukis (All Rights Reserved).










ARTICLE CATEGORIES

Aging
Arts and Crafts
Auto and Trucks
Automotive
Business
Business and Finance
Cancer Survival
Career
Classifieds
Computers and Internet
Computers and Technology
Cooking
Culture
Education
Education #2
Entertainment
Etiquette
Family
Finances
Food and Drink
Food and Drink B
Gadgets and Gizmos
Gardening
Health
Hobbies
Home Improvement
Home Management
Humor
Internet
Jobs
Kids and Teens
Learning Languages
Leadership
Legal
Legal B
Marketing
Marketing B
Medical Business
Medicines and Remedies
Music and Movies
Online Business
Opinions
Parenting
Parenting B
Pets
Pets and Animals
Poetry
Politics
Politics and Government
Real Estate
Recreation
Recreation and Sports
Science
Self Help
Self Improvement
Short Stories
Site Promotion
Society
Sports
Travel and Leisure
Travel Part B
Web Development
Wellness, Fitness and Diet
World Affairs
Writing
Writing B