I want to use a credit card for my business expenses, as I figure I might as well rack up reward points since I have a lot of recurring business expenses. It seems the two popular business credit cards are CapitalOne and American Express OPEN.

But I was curious: are there actually any good reasons to get a "business" credit card if you're a sole proprietorship? The only one I could think of is that you get your business name on the card.

I understand the importance of separating business from personal expenses, but you could do that just by opening another personal credit card that is used only for business expenses. What I'm asking is, are there reasons specific to opening a business vs. a personal credit card?

I love AmEx (have Optima Platinum for personal) but I don't like having to pay $75 annual fee for their Small Biz Gold Card. I'm thinking of going with Blue for Business or maybe even CapitalOne.

Thanks for any input!

ever here the phrase " play with snakes and your bound to get bit"

We use business credit cards all the time, it makes accounting for expenses alot easier.

Just have to make sure that it is only used for business use and not for personal use though otherwise it could get messy.......

credit cards are a must for the hosting business... it makes paying for software & services much easier. However I doubt you'll be able to get a credit card under the business - you have to be well established with v.good accounts before a credit card co. will look at you.

A 2nd personal card used solely for business is the route to go.



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Originally posted by pezzer
credit cards are a must for the hosting business... it makes paying for software & services much easier. However I doubt you'll be able to get a credit card under the business - you have to be well established with v.good accounts before a credit card co. will look at you.

Well I don't know where you are located but this isn't true for Canada, and I'm sure its the same way in the United States.
If they can't find anything in a credit check of your company name they will do a personal credit check.

This isn't true for Sweden either. I signed up for a business credit card together with some other banking services. The total price was about 170 USD/year. I got it in 3 days, and I am not a big customer, although I also use the same bank for my personal finances.

I'll say the same for the UK as well, getting a business credit card was part of getting our business account, and we did that about a week after officially setting up the business.

If your business gets approved for it - go for it. If not - use a second personal one just for business purposes. In the second case - points and rewards are less 'critical' - if you plan on using the actual credit make sure that you get a low interest rate. If things go south you want to be able to keep your personal credit history as clean as possible.

Its good for credit history and always that extra backup if funds are low.

Some banks offer you a free credit/debit card when you open a business checking account with them.

CCs are vile temptations---- :fork: ----don't fall victim to them!

seriously... I am a sole proprietorship as well and month ago I opened a SB checking account with Washington Mutual and I have a Visa Check Card with the checking account...

this works for me as you can make purchases like with a credit card yet not run the risk of additional debt... also has my companies name on in --- pretty swanky ;)

I suppose the day will come when I will need a Corp CC... but I am not rushing it

I am a big fan of AMEX cards. We have both AMEX Business Platinum cards. The $300 yearly fee may seem steep at first, but every time I travel using the card saves me a minimum of $15 per day in car rental expenses since I'm still under 25 and they get me a preferred rate that lowers the underage fee. The membership rewards program is also great. I am currently saving up some frequent flyer miles so that I can fly to Europe first/business class for free on my honeymoon.

I'm not sure how universal this is, but one benefit of having the business card is that my business cards do not show up on my personal credit report, even though they are attached to my SSN. This is very helpful because while we pay off in full each month, but even so we still have balances due that very, very high - this would look quite nasty on my personal credit report.

In summary, business card is good. Travel perks and no negative impact to my personal credit report. One thing to note, though, is that AMEX, at least in our case, was very difficult to obtain initially. However, this was probably compounded by my age and overall limited credit history.

sh-directssl - we're based in Hong Kong. For such an advanced financial service centre, HK is positively backwards and banks get away with daylight robbery re: rates & charges when it comes to credit (cards, loans mortages etc).

Personal credit cards are easily obtainable but banks won't touch companies less than 2yrs old and then your turnover & profitability have to be of a certain level. You migh be able to get round this if you have assets to leverage off of - but if you're starting a small co. this is very unlikely !

cheers


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Originally posted by pezzer
sh-directssl - we're based in Hong Kong. For such an advanced financial service centre, HK is positively backwards and banks get away with daylight robbery re: rates & charges when it comes to credit (cards, loans mortages etc).

Personal credit cards are easily obtainable but banks won't touch companies less than 2yrs old and then your turnover & profitability have to be of a certain level. You migh be able to get round this if you have assets to leverage off of - but if you're starting a small co. this is very unlikely !

cheers


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Thanks for clearing that up.
Just seemed really weird that they'd operate like that.

Credit cards can come in handy for some large purchases - and it sure makes monthly operations easier as you only have the one statement to go through and it's all business expenses, but it's not different than personal credit.

If you don't pay your bills, you'll run into problems. If you do get a credit card for business, be sure to use it for business ONLY. Also, pay it off - AMEX is nice as you MUST pay at the end of the month.

We do large hardware purchases on cards all the time $15,000-30,000) but then come 2 months or 3 months down the road that card is paid off and ready for the next expense.

Conor
handsonwebhosting.com

We pay everything off each month as well. In the UK as far as I know companies cannot get Switch cards so we had to go for a Mastercard. But then I would of asked for this anyway since we deal with people in the USA almost everyday and it's the best way to pay.