charge card for business?

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sweeper
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charge card for business?

Postby sweeper » Wed Mar 19, 2014 4:21 pm

I have read on this site the past hour that most don't think a charge card is beneficial to them so they are going to close theirs. My question is, what makes that beneficial or not beneficial as opposed to a credit card?


linuxmachine
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Postby linuxmachine » Wed Mar 19, 2014 5:00 pm

A couple things FOR charge cards:

1. Although technically there is an internal limit, charge cards have no spending limit. Meaning you don't have a hard limit on how much you can spend on your card. I've found the internal limit to be more generous than the actual hard limits given by credit cards, so as long as you can pay it all back and keep a good history, you can spend more on the charge card than a regular credit card. Of course, if you have MANY credit cards, you could just distribute your spending across the cards and keep under the spending limit.

2. In the newer FICO scoring models, charge cards don't count towards utilization.

sweeper
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Postby sweeper » Wed Mar 19, 2014 5:44 pm

So basically i won't have a CL with a charge card?

What does that mean towards utilization?

linuxmachine
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Postby linuxmachine » Wed Mar 19, 2014 5:55 pm

sweeper wrote:So basically i won't have a CL with a charge card?

What does that mean towards utilization?


correct. charge cards have no CL, but that doesn't mean you can put 50k on a nice luxury car on a random day (unless perhaps you have a amex centurion card or special circumstances on the plat). typically banks will monitor your usual spend and keep a threshold so you don't suddenly charge a lot of money and disappear.

utilization is basically the amount of debt you owe on your cards with respect to your overall credit limit. if your utilization is high, your score takes a hit. the balance on your charge card will not be counted towards utilization.

sweeper
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Postby sweeper » Wed Mar 19, 2014 6:56 pm

Thanks never knew that!
For a corp that's jut been filed will it be hard to qualify for a charge card? Or my great credit history (personal) will help qualify?

linuxmachine
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Postby linuxmachine » Wed Mar 19, 2014 8:04 pm

sweeper wrote:Thanks never knew that!
For a corp that's jut been filed will it be hard to qualify for a charge card? Or my great credit history (personal) will help qualify?


If there's no credit history established with your EIN, it's likely that they will use your own credit history to determine approval and credit limits.

flan
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Postby flan » Wed Mar 19, 2014 10:30 pm

linuxmachine wrote:If there's no credit history established with your EIN, it's likely that they will use your own credit history to determine approval and credit limits.


Unless you've got revenues in the 7 digits, and years of history on the corporation, you're almost certailnly going to use your personal credit, and require a personal guarantee.



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