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5 False Rumors about Business Credit Cards

Posted by businessfinancing on May 15, 2008

Small business owners, when first attempting to get credit from a credit card company often are accepted as clients with the provision that they personally sign for the business credit card. Otherwise, their application will be rejected. Don’t be scared off by this tactic. The credit card companies prefer to reduce their risk, so they will make it appear that you don’t have a choice.

You may have been told that there are drawbacks to you, as a small business owner for having a business credit card, but be assured that if you strategize correctly, these are not true. Here are 5 rumors we’ve all heard about business credit cards:

  1. You can’t separate your business credit from your personal credit with a business credit card for several years.
  2. You are personally liable for your business credit card.
  3. Your business credit card payment history will be reported on your personal credit. (Experian & Equifax)
  4. Your business credit activities can damage your personal credit.
  5. A large debt tied to your business credit card can make you personally look more extended than you are in fact.

The truth is that if you don’t personally sign for the card, those 5 points do not apply. You can get a business card based strictly on your business credit (Paydex score). Be cautious when signing your name on any type of business credit application and be sure that your signature is not making you personally liable. A business loan underwiter can take educate you how to separate your personal credit from your business credit.


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