Need advice for selecting a credit card to start an online business

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s.jessica
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Need advice for selecting a credit card to start an online business

Postby s.jessica » Tue May 07, 2013 9:02 pm

I'm still kicking around this idea. I'm starting my own little sideline business (sole proprietorship) and I'm wondering just exactly what the advantages are of getting a business credit card. What I really need to know, if I get a card now, will it do anything to build my business credit? I have a DBA, business checking account and EIN.

I was told by Wells Fargo they would pull my personal credit if I apply and I would personally be responsible for any bills not paid by the company. Basically, I'm responsible for the bill, but it's paid by a business check to keep records straight. So then how bad would it be for my personal credit if I get a couple of business cards and have to close them in a few months because the business failed?

Starting out, the plan is to do online sales and start an eBay account. I'll be starting slowly but ordering new product to resell and start my own website. I'm going to either need a personal credit card or business credit card to be able to order my wholesale product, supplies and pay all the merchant fees. While it doesn't seem like much now, I want to do it as a business to avoid problems later. I need some serious recommendations for what kind of a card I should be looking at.


benhollberg
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Postby benhollberg » Tue May 07, 2013 10:20 pm

I run a small business also in the ticket resell business, I use all my credit cards as personal and not business.

I have an Amex Premier Rewards Gold which lets you get a second card for free, both have my name but I use one for business and one for personal. I also have the Chase Marriott Rewards in the same setup for Visa transactions.

I also have other cards that I use only rarely for big ticket sales, still under personal accounts. I don't see the point in opening new accounts or business, I have been invited to AMEX Platinum but it was a business account (new account), I'll wait until I'm invited in July for a personal upgrade.
American Express Platinum Card
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djrez4
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Postby djrez4 » Tue May 07, 2013 10:23 pm

First question - who says you have to close them?
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MB131174
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Postby MB131174 » Thu May 09, 2013 11:06 pm

Honestly, as a sole proprietor myself, I highly recommend having a business credit card vs using a personal credit card. My personal AmEx (Blue Cash Everyday) is used only for personal purchases, and my business AmEx (Business Simply Cash) is used only for business expenses. The fact they both show up under the same online account is very convenient. I have my business checking linked for the business card obviously for payments. If nothing else, when tax time comes around you'll have a much better record of what were business expenses and what were personal expenses. My accountant doesn't need to know what I'm spending my personal funds on; but as far as my business spending, snoop away. Keeping personal and business expenses, and payment cards, separate is by far more beneficial.
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Z06Biker
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Postby Z06Biker » Fri May 10, 2013 3:31 pm

MB131174 wrote:Honestly, as a sole proprietor myself, I highly recommend having a business credit card vs using a personal credit card. My personal AmEx (Blue Cash Everyday) is used only for personal purchases, and my business AmEx (Business Simply Cash) is used only for business expenses. The fact they both show up under the same online account is very convenient. I have my business checking linked for the business card obviously for payments. If nothing else, when tax time comes around you'll have a much better record of what were business expenses and what were personal expenses. My accountant doesn't need to know what I'm spending my personal funds on; but as far as my business spending, snoop away. Keeping personal and business expenses, and payment cards, separate is by far more beneficial.


+1

Keeping your expenses separate not only helps make accounting easier come tax time (and, god forbid, is more transparent if you are ever audited), but a lot of business credit cards (especially the Amex ones) have additional benefits that even their consumer counterparts don't have.

And, possibly the goliath benefit of them all - the credit limits, and your credit utilization, doesn't report on your personal credit score. So even if you ran up some major start-up purchases in getting your business off the ground running, they won't show up on your personal FICO, so there's no risk of it lowering your score.
AMEX: PRG Gold, Business Simply Cash, Business Costco, BCE.
Chase: United MileagePlus Club, Sapphire Preferred, Amazon Rewards
Barclaycard Arrival World Mastercard
HSBC Cash or Fly World Mastercard
USAA World Mastercard, USAA Platinum Mastercard
Wells Fargo Business Platinum
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