New business credit cards. How does your business get them?
First, there are two types of business credit cards, those that require you to sign personally and those that don’t. For new business credit cards that require you to sign for them personally the approval decision is based solely upon your personal credit card and really have nothing to do with your business or your business’s credit rating. These type of cards typically do nothing to help you build a better business credit rating and if your business should fail you are 100% responsible for all the debt.
Better new business credit cards are those that are based upon your business’s credit rating and not your personal credit rating. Out of the 500 new business credit cards that are available, less than 60 fall into this category. These new business credit cards require that you do a little more work. Before you can obtain one of these your business needs to have some setup work done.
The setup work we are referring to is building your business credit rating. The first step here is to insure that your business is registered with all three business credit bureaus, that you have a bank account in the exact business legal name and that you have at least five vendors or suppliers that have extended your business a small amount of credit and that are reporting how you pay to the bureaus.