Thinking of Getting My First Business Credit Card

 

I’ve been thinking for the past few months of getting my first business credit-card. Between running a part-time business and my blogging business, there come times when I have to use a credit-card to make purchases. It’s easy to make purchases, but separating my business and personal transactions gets pretty confusing at times. Far too many times last year I made purchases on my personal credit card for the businesses. And it’s become a royal pain in the ass with all the paperwork juggling. I know that a change needs to be made, obviously one of the first rules of being a business owner is keeping your business transactions separate from personal transactions.

So, I need a business credit card. Badly!

Due to some past reading on business credit cards, I’m familiar with the process of obtaining a business credit card. It is much like applying for a personal credit card. In both cases, lenders want to know that they’re not taking an undue financial risk by extending you credit.

Essentially this means that before you’re approved, creditor issuers will scrutinize your credit score, your repayment history, and even the years spent at your current residence. Some business credit cards come with costly interest rates, however I’m not interested in those.

I am thinking of waiting until after I do my business taxes in the Spring. This way I can alleviate some pressure and make the process slightly easier. If the creditor reviews my tax statements,  looks at the positive cash-flow and a decent income on monthly basis, it should make it easier for me to obtain a business credit-card.

Previously I was offered a small business line of credit, but I was not ready to take it at that time, so I rejected the offer.  I’d rather get a business credit-card. Sure the interest is probably higher, but I don’t need a massive amount of credit. For me it’s about the convenience. And in order for me to get any small business financing will probably require some sort of personal guarantee from my personal side of finances. We’ll see, maybe not, but than again I wouldn’t be surprised.

So, I’ll keep you guys posted on my journey to getting my first business credit card.

And btw….

Does anyone have any good business credit-card recommendations?

Comments

  1. Hi Eddie,

    Couple things about business credit cards. If you are looking for:

    1. $0 cards with decent interest rates the good options would be:

    - Credit Cards: RBC Business Cash Back with Cash Back feature, Extended Warranty (EW), Purchase Security (PS); BMO Cash Back for Business or BMO Air Miles for Business – both BMO cards have either cash back or rewards and both PS and EW;

    Lines of Credit: RBC Credit Line for Small Business: has in addition to rewards also EW and PS

    2. Cards under $100 (mid-range)
    Here the best option would be probably Amex AirMiles Platinum for $99; Beware of other their cards – many have 30% interest

    3. High-end cards, $120:
    RBC Visa Business Platinum Avion has the largest choice of perks including rewards, rental car protection, bunch of travel insurance perks (but w/o medical), PS, EW, and couple others
    The only comparable one with the same choice of perks would be ScotiaGold Passport for Business

    Cheers,
    Alexey

    • Hi Alexey!

      That’s some pretty insightful info. Which one do you have?
      Thanks for sharing.

      • Hi Eddie,

        I have RBC Credit Line for Small Business: low interest rate and $0 fee. At the same time I get some rewards and have purchase security and extended warranty for business purchases! :-)

        Cheers,
        Alexey

  2. $author you have great blog

  3. In all honesty, I would suggest one of the cards from the Chase Ink line for businesses.
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  4. It is advisable for those who starting a business to get their own business credit card so that every time they want finance a business expenses and don’t have cash, they can use their business credit card.

  5. Eddie – we’ve helped hundreds of people with this problem – if you don’t care about rewards, then a very good card is the CIBC Bizline Visa card. There is no annual fee; and it is a hybrid credit card and line of credit, with convenience checks readily usable.

    The interest rate depends on the quality of your application, but seems to be most favorable (and very low) when your credit score is high (as opposed to how successful your business actually is)

    There likely is not much benefit to waiting for the Spring – most decisions for this card are automated and no one will actually review your financial statements, monthly cash flow etc.

    Finally, most business credit cards actually key on YOUR personal credit history, and not the credit history (or lack thereof) of your business.

    You will be personally liable for the balance on your card – highly unlikely you will have limited or zero liability, even if your business is incorporated.
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