Apply for a Business Credit Card: 7 Mistakes to Avoid


Apply for a Business Credit Card: 7 Mistakes to Avoid

At one point or another a small business owner will need to apply for a business credit card. While there are different types of cards to choose from each one has its own strengths and weaknesses.

One of the major factors that can have a serious impact on you personally is what is outlined in the fine print. Even though you are applying for a business credit card for your company the terms and conditions are what matter most.

Every small business owner should be aware of certain errors to avoid when applying for a credit card.

These mistakes have the potential of damaging your personal credit scores as well as putting your personal assets at risk.

While applying for a business credit card may not be the most exciting thing to do but it's necessary and requires your careful attention to every part of the process.

First of all, when it comes to business credit cards there are six major types of applications with each requiring different types of information.

Some credit card issuers require a personal credit check and guarantee while others may only require a personal credit check if your company has a strong enough credit file that stands on its own.

In addition, some issuers may base its credit approval solely on the creditworthiness of your company which is what most small business owners should strive to achieve.

Let's take a look at seven mistakes that you never want to make that can cost you money, damage your personal credit and put your personal assets at risk.

7 Mistakes to Avoid When You Apply for a Business Credit Card

1) Not conducting a credit assessment.

Before you apply for a business credit card you should be fully aware of where your credit stands on a personal and company level. Get copies of your personal credit reports and scores from the three consumer credit agencies as well as copies of your business credit files and scores with the three major business credit bureaus.

2) Applying for the wrong type of card.

You should understand the primary functions of the card you are applying for including its limitations. Choosing the best small business credit card requires a full understanding of all the types of cards that are available.

3) Failing to read the fine print.

Just because a business credit card offers all kinds of special perks and rewards doesn't mean it's necessarily the best card. Always read the fine print so you completely understand the terms and conditions of the credit card agreement.

4) Chasing teaser rates and special offers.

While promotional offers like a no-interest promo look really attractive most of them come with strings attached. Make sure you understand what conditions must be met and how long your teaser rate stays in effect

5) Applying for the wrong business credit card.

To protect your personal credit you should apply for cards that report your payment experience solely to your business credit files.

6) Providing a personal guarantee.

You can avoid a personal guarantee with specific credit card issuers if your business has established strong business credit files. You can also avoid supplying a PG with certain secured business credit cards.

7) Applying for too many cards.

Be selective on which cards to apply for because too many inquiries on your business and personal credit files can raise a red flag with creditors as well as negatively impact your personal credit scores.

So the next time you apply for a business credit card pay close attention to what you're signing up for. Don't get caught making mistakes that can now be easily avoided.



Apply for a Business Credit Card: 7 Mistakes to Avoid

By: Marco Carbajo

About the Author

About the Author Marco Carbajo is founder of the Business Credit Insider's Circle. Looking to apply for a business credit card? Claim Marco's popular FREE business credit seminar ($597 Value)! Follow Marco on Twitter @MarcoCarbajo.

(ArticlesBase SC #3424558)

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