Are you a small business owner like I am? Then you already know how challenging it is to build credit for your company. Without an established history on your D&B credit report, banks won’t lend to you, nor give you the chance to build credit. So what gives?
With a small business credit card, you can basically piggyback off your personal credit to build your business credit. But watch out because there are some tricks and tips you need to know about before you apply for the Capital One Business Platinum.
Update: This card has been discontinued. You can compare business card reviews here.
What do I like about it?
1. Business Credit Reporting. Believe it or not, many business card issuers don’t even report the accounts to the credit bureaus (unless you default on the account). This means a lot of small biz credit cards are useless for establishing/building credit.
Does Capital One report business credit card accounts to the reporting agencies? Fortunately they do. Here’s who they report to:
- Dunn & Bradstreet (D&B)
- Equifax consumer and business bureau
- Experian business bureau
The bottom two don’t really matter since D&B practically monopolizes the market, so that’s the important one.
2. Shopping Benefits. You will find these benefits on many other credit cards on the market so they are not special, but still worth mentioning.
Purchase Security: Applies to purchases paid for in full using the Capital One Business Platinum credit card. With it, there is protection for the first 90 days after a purchase is made for fire, some types of damage, theft, and loss. There are exclusions though and not all items will qualify.
Extended Warranty: Also requires that the item was paid for using the card. With it the manufacturer’s warranty is matched in terms of length, up to one additional year. For example, a 6 months warranty will be matched with another 6 months. A 3 year warranty will be matched with 1 additional year. Warranties longer than 3 years won’t qualify and there are plenty of exclusions so you can’t just assume a given item is covered.
What do I dislike about it?
1. No Rewards. You won’t be getting any rewards with the Business Platinum Capital One card. This is a big letdown considering that business cards in general have higher processing fees than personal cards (merchants pay more to accept them). That’s why most biz cards can afford to dish out higher rewards, but apparently not this one.
2. Annual Fee. You will have to pay $19.00 per year to have this card. I don’t see how this makes sense given that there are no rewards, do you?
3. High Interest Rate. If you plan on using this for financing purposes, be prepared to pay through the roof. It was 19.99% as I’m writing this review.
4. Personal Credit Reporting. Having the card reported to your business file = good. But you personal credit file = bad!
Capital One now reports business cards to your personal credit files:
- Equifax – consumer bureau
- Transunion – consumer bureau
- Experian – consumer bureau
Most card issuers don’t do this (except for delinquency) but Capital One reports it monthly regardless. Why is this bad? Well think about it for a moment…
Let’s say you are carrying a high balance on your business card (say, above 40% of its credit line). The percentage of a credit limit that’s used is factored into your credit score… high balances are a no-no. So having that 40% show up on your personal credit report wouldn’t be desirable.
Now in all fairness, the Capital One Business Platinum is not a “bad” card. They are upfront with these drawbacks, so it’s not like they’re being sneaky about it.
Really what it boils down to is why would you pay $19 for their business platinum credit card, when the other guys out there can offer you even more for a $0 annual fee?
If you want business credit reporting, plus rewards and benefits, my recommendation is the Chase Ink cards. I do choose to advertise them but not shamelessly – I put my money where my mouth is and use them for my own business! Check out the 3 different Chase Ink cards to see all they can do for you.