Does Your Business Credit Card Show on Your Personal Credit Profile? It Might!

How to Get Your Business Credit Card Off Your Personal Credit Profile

If you have a business credit card, you probably think it isn’t affecting your personal credit profile. While ideally this would absolutely be the case, the fact it, it could be. There are ways to keep your business debt off your personal credit report, but it isn’t something that happens automatically. There is a very specific process that actually takes some time.

It also has to be intentional. A business owner must be active about building business credit. It doesn’t happen passively. The idea is to set up your business in a way that it easily exists in the eyes of credit reporting agencies (CRAs) and lenders as an entity separate from yourself. How do you do that? After you do, how do you get accounts that will report to the CRAs before you have a business credit score?

We can answer all these questions and more. We can walk you through the process and show you not only how to establish business credit that will not show up on your personal credit profile, but how to build it so that it is strong enough to qualify for any financing you may need.

One Business Credit Misunderstanding

One major misunderstanding when it comes to business credit is that if you have a business credit card, it isn’t on your personal credit profile. While this can be true, if you haven’t actively built business credit and you did not apply for the credit card with your business information, it likely is not true. The fact is, that card is a personal credit card that has a few extra perks due to its business designation. It is not actually a credit card that is based on the merits of your business credit profile. If a business credit card is in the owner’s name, it is on the owner’s personal credit profile.

Share our foolproof business credit building checklist and tell your friends about how you’re building business credit the quick and easy way.

How to Establish Your Business as Separate from Yourself

The question then becomes how do you separate your business from yourself. Many new small business owners operate as a sole proprietorship because it is just easier. They simply use their own contact information as their business contact information, and business finances mingle with personal finances.

When it comes to establishing business credit however, this just will not work. Here is what you need to do.

Get Incorporated

The first step is to incorporate. There are three options for this.

C Corp– This is the most definitive separation, but it is also the most complicated and expensive. Before choosing this option, be certain there are reasons other than establishing business credit that it needs to be done. If it isn’t necessary for some other reason, there are other, simpler, less expensive options.
S Corp– This option basically offers the same separation as the C Corp, but taxes are paid at the personal level, rather than requiring the business to be taxed as well, resulting in double taxation. It is also cheaper than incorporating as a C Corp. If you aren’t required to file as a C corp, this is a good alternative.

LLC– forming a Limited Liability Corporation results in less liability, thus the name, and offers enough separation to serve the purpose of establishing business credit. If you are not required to be a C Corp or S Corp, this is the easiest and most cost-effective way to create the separation of business and personal credit needed.

The option you choose will depend on your specific tax and liability needs, as they each offer different levels of protection and expenses.

Get an EIN to Keep Accounts off Your Personal Credit Profile

You need to apply for an EIN. Stop using your Social Security Number as the identifying number for your business. Your SSN is a direct link to you personally. It is virtually guaranteed that anything connected to it credit wise will end up on your personal credit reports.

In fact, even if you follow all the other steps for establishing business credit but skip this one, accounts could end up on both reports. You don’t want that.

The process of applying for and EIN is easy. The IRS has an online form, and as soon as they verify all the information, you receive your number. It typically happens almost immediately.

Don’t Forget to Get a D-U-N-S Number

Dun and Bradstreet (D&B) is the most widely used business credit reporting agency. They issue each business on file a 9-digit D-U-N-S number. Application is easy and free, and once you have that number, you will be even closer to establishing credit for your business separate from your own.

Get Shiny New Contact Information

Your business needs its own phone number and address. This way, when you apply for credit, you can enter contact information that is separate from your own. When information is reported to agencies, sometimes the phone number and address are used as identifying factors. If you and your business share a number and address, that just decreases the level of separation.

Be sure you get your contact information listed in the directory under your business name.

Get a Dedicated Business Bank Account

If you don’t have one already, you need a dedicated business bank account in the business name. Make sure all business expenses run through this account. Not only does this help separate you from your business, but it will keep business expenses separate from personal expenses for tax purposes as well.

Business Website and Email Address

A lot of business owners do not realize how important this is. Truly, these days if you do not have a website, you do not exist. However, your business website needs to be professionally built and hosted on a paid service such as GoDaddy. The email address needs to have the same URL as the website. Free web hosting and free email services such as Gmail and Yahoo do not work well.

These things make your business look fundable to lenders. This is the first step to building business credit.

Establish Credit Lines with Vendors

If you are a new business and just starting with vendors, look for those that will extend credit and report to the top credit agencies. We call this the vendor credit tier.

Share our foolproof business credit building checklist and tell your friends about how you’re building business credit the quick and easy way.

If you have been around for a while and do not have credit with your existing vendors, ask for it. If they comply, ask if they currently report to the credit agencies, or if they will. Not all vendors do because it is not required. Not all are willing either. If your current vendors do not want to cooperate in this endeavor, consider switching to vendors that will.

Here are some of the starter vendors that are the easiest to get started with.

Quill Office Supplies

o Use Quill to order supplies you use every day, including pens, pencils, folders, printer ink, copy paper, and even cleaning supplies.

Uline

o Order shipping supplies, janitorial equipment, and more through Uline.

Grainger

o Grainger offers industrial supplies as well as tools that you will need in the course of regular business.

It may be necessary to place a few initial orders with each of these before you can get net terms. There is no need to order anything you do not need however. They each sell things that business owners need in the everyday operations of a business. Once you make your on-time invoice payments and they begin reporting those payments to the credit agencies, your credit score will start to grow.

Talk to the Utility Companies

Sometimes utility companies are willing to report payments to credit agencies. However, you almost always have to ask. The worst they can do is refuse. If they do, no damage is done. If they agree, you will only establish your business credit faster.

Talk to them all, including telephone, electric, gas, and even internet. Before you do this, be certain that all of these utilities are in your business name with your business contact information.

Topsy Turvy: Your Personal Credit Profile Still Matters for Your Business

Taking these steps will help you establish separate credit for your business. That means your business credit cards and other business credit accounts will not show up on your personal credit profile. However, it is virtually impossible for the reverse of this to hold true all the time.

It’s true, your personal credit accounts will not show up on your business credit report. However, your personal credit can still affect your ability to get a loan even if you are using business credit. It doesn’t always, but it can. Here’s how.

First, some lenders insist on checking personal credit even if you have business credit. The thing is, if your personal credit isn’t up to par but you have strong business credit, you are more likely to get the loan anyway. That not so great personal credit score can affect your terms and rates however.

The other way that your personal credit profile can affect your business credit is this. Some CRAs actually use your personal credit in the calculation of your business credit score. While not all of them do this, there is really no way to know which of the CRAs your lender will choose to use.

The moral of this story is that you cannot ignore your personal credit profile while you are building business credit. You have to stay on top of your complete credit history.

Why Does it Matter if Business Credit Cards are on Your Personal Credit Profile?

You may be wondering why it matters. If your personal credit can affect things anyway, wouldn’t it be easier to just have everything in one place? The answer is a resounding no. In the long term, not having separate business credit is a bad idea.

The thing is, even if you make all your payments on time, your personal credit cannot handle the level of spending that running a business requires. Business credit cards that you get on your business credit have higher spending limits. These higher limits are designed to handle the larger spending amounts necessary to run a business.

Why does that matter? Well, when you carry balances at or near your credit limit, your debt-to-credit ratio goes up. A high debt-to-credit ratio has a negative impact on your personal credit score. With the level of monthly spending that most businesses require regularly, it is all but impossible to keep a low debt-to-credit ratio with business accounts on your personal credit profile, even with an immaculate credit history. This can impede your ability to get personal financing for things such as houses, home renovation, automobiles, and more.

Share our foolproof business credit building checklist and tell your friends about how you’re building business credit the quick and easy way.

Are Your Business Credit Cards Affecting Your Personal Credit Profile?

How can you know if your business cards are affecting your personal credit? Well, if you have not taken the steps necessary to separate your business credit from your personal credit, you can bet for sure this is happening. To know for certain, get a free copy of your personal credit report from each of the main personal credit CRAs. These include Experian, Equifax, and Transunion. You should be able to see them on there.

If you have strong business credit, call the credit card company and inquire about shutting down the card on your personal account and switching to a card on your business credit. If you do not yet have strong business credit, start building it now. When you have a high enough business credit score, take the steps necessary to remove the card that is on your personal credit and open new ones using your business credit.

You Don’t Know What You Don’t Know

If you aren’t sure if this is happening to you, or if you didn’t even know it was possible, find out now. Get copies of your personal credit profile and see what is on there. At the same time, start building business credit if you do not have it already. Then you can access all the funding you need to ensure your business is able to continue to grow and thrive.

The post Does Your Business Credit Card Show on Your Personal Credit Profile? It Might! appeared first on Credit Suite.

5 Awesome Ways to Build Business Credit Score

Build Business Credit Score to Get the Funding You Need

Business owners hear it all the time. You need business credit to run a business. You shouldn’t run your business using personal credit. Business credit is the best way to ensure you can get the funding you need to build and grow your business. The problem is, you don’t hear a lot about what business credit is, how to get it, or how to build business credit score.

Did you know you can’t automatically build business credit score? That’s right. It isn’t like your personal credit score where accounts are automatically reported. You have to be intentional when you want to build business credit score. In fact, if you have not been intentional, you may not even have business credit yet, despite the fact that you own a business.

How Do You Get Business Credit?

Before you can even begin to build business credit, you have to establish your business as an entity separate from yourself. Here is how that happens:

You have to incorporate

This is the most decisive first step in separating your business credit from your personal credit. When you cease operating as a sole proprietorship and incorporate your business, it will be easier for credit agencies to recognize your business separately. You have a few options.

C Corp

This is the most definitive separation, but it is also the most complicated and expensive. Before choosing this option, be certain there are reasons other than establishing business credit that it needs to be done. If it isn’t necessary for some other reason, there are other, less complicated, and less costly options.

S Corp

This option basically offers the same separation as the C Corp, but taxes are paid at the personal level, rather than requiring the business to be taxed as well, resulting in double taxation. It is also cheaper than incorporating as a C Corp. If you aren’t required to file as a C corp, this is a good alternative.

LLC

Forming a Limited Liability Corporation results in less liability, thus the name, and offers enough separation to serve the purpose of establishing business credit. If you are not required to be a C Corp or S Corp, this is the easiest and most cost-effective way to create the separation of business and personal credit needed.

Share our foolproof business credit building checklist and tell your friends about how you’re building business credit the quick and easy way.

Get an EIN

You need to apply for an EIN and stop using your Social Security Number as the identifying number for your business. Your SSN is tied to you, personally, and it is virtually guaranteed that anything connected credit-wise will end up on your personal credit reports.

The process for applying for and EIN is easy. The IRS has an online form, and as soon as all the information is verified you receive your number. It typically happens almost immediately.

Get a DUNS Number

Dun and Bradstreet (D&B) is the most widely used business credit reporting agency. They issue each business on file a 9-digit DUNS number. Application is easy and free, and once you have that number, you will be even closer to establishing credit for your business separate from your own.

Separate Contact Information

Your business needs its own phone number. This way, when you apply for credit, you can enter contact information that is separate from your own. When information is reported to agencies, sometimes the phone number is an identifying factor. If you and your business share a number, that just decreases the level of separation.

Be sure you get your business phone number listed in the directory under the business name.

Business Bank Account

There has to be a dedicated business bank account. Run all business transactions through this account. Resist the temptation to pay personal expenses from it by paying yourself a salary instead.

What if You Already have Business Credit?

The next question is, how do you build business credit score if you have business credit already, but it is bad? How do you improve your business credit score? It is impossible to improve on anything if you do not know what you are starting with, what you have to work with, and what you have control over. Let’s break down where exactly your business credit score comes from and what it means. This is important to get a good starting point.

Dun & Bradstreet

Dun & Bradstreet offers several different types of business credit reports. In fact, there are six different reporting options in all. They all offer different information related to credit worthiness. It takes all of them to get the whole picture.

The report most used is the PAYDEX. This is probably because it is the easiest to understand. It is the options most like the consumer FICO score. It measures how quickly a customer makes payments and ranges from 1 to 100. Scores of 70 or higher are acceptable. For reference, a score of 100 shows payments are made in advance, and a score of 1 indicates that they are 120 days late, or more.

Experian Commercial

Experian uses what it calls Intelliscore as its credit ranking. There are more than 800 different factors that they use to predict a company’s credit risk. With Intelliscore, a score of 76 or higher indicates a low risk of default or late payment. If a score falls between 51 to 75, it indicates a low to medium risk. Scores from 26 to 50 are medium risk, and from 25 down to 1 is medium high to high risk.

Experian Commercial offers a number of other scores as well, similar to Dun & Bradstreet.

Equifax Business

Equifax gets its business credit data in ways similar to D&B and Experian. They get Net 30 type industry trade credit information from a wide variety of suppliers that provide products and services to businesses on an invoice basis.

In addition, they use financial data with this industry trade data, and they add in utility and telephone payment data. They also use public records information.

Share our foolproof business credit building checklist and tell your friends about how you’re building business credit the quick and easy way.

Equifax Business credit scores include:

The Small Business Credit Risk Score for Suppliers

It is scored on a scale of 1 to 100, with 90+ indicating that a business has paid its obligations as agreed. An 80 to 89 means they are 1 to 30 days past due, 60 to 79 indicates they are 31-60 days overdue, 40 to 59 is 61 to 90 days past the payment date. It just goes down from there.

Business Failure Risk Score

This score indicates the chance of a company paying its bills late on the following scale:

497 – 816: 25% or less chance of payment being overdue
452 – 496: 26 – 50% chance of payment going overdue
415 – 451: 51 – 74% chance of delinquent payments

FICO SBSS

The FICO SBSS is the business version of your personal FICO credit score. It is becoming increasingly more common for lenders to use this score, rather than the Experian or even the D&B PAYDEX business credit score.

Unlike your personal FICO, the SBSS reports on a scale of 0 to 300. Of course, the higher the better, but most lenders require a score of at least 160.

This is a lot different from other business credit scoring models because it combines your business credit score, personal credit score, and other financial information such as business assets and revenue. It is a total global financial picture rolled into one score.

How Do You Know What Your Score Is?

Unfortunately, there are not a lot of ways to find out what your business credit score is without paying. Find out how to get business credit reports for free here. Most options do not work on a continual basis however. You will eventually have to pay.

The prices are not cheap. Here are the prices for the top 3 business credit reporting agencies:

Dun & Bradstreet reports range in price from $61 to $229 per report.
Experian reports are $49.95 per report.
Equifax is $99.95 per report.

As for your FICO SBSS, that is a whole other story. You cannot really get a copy of it because it will be different from lender to lender. They system calculates a score based on what the lender tells it to look for. This means the lender can weight certain aspects of the calculation. For example, if one lender says that they want the personal credit history to be heavily weighted and another prefers to focus on another type of debt, those two lenders will have two different scores. Meanwhile, another lender may leave out student loans all together. The next may not want any personal credit information at all. With the huge number of possibilities, you could feasibly have a different FICO SBSS score every time.

With Credit Suite, you can monitor your scores with Dun & Bradstreet and Experian for a fraction of the cost. Get more information here.

5 Way to Build Business Credit Score

Once you understand where it comes from, what it is, and what it means, you can get to work and build business credit score. Here are some of our favorite tips.

1. Get more accounts reporting

The fastest way to build business credit score is to get as many accounts as possible reporting on-time payments. The fastest way to do this is to work with starter vendors.

These are vendors that will offer net terms on invoices without a credit check. After you pay, they will report those payments to the credit agencies. As more and more of these vendors report your payments, your business credit score will start to grow.

Another way to get more accounts reporting on-time payments is to ask vendors you already work with to report. You pay things like rent, utilities, and your telephone bill each month. Sometimes if you ask them, they will report those payments. They are not required to though.

2. Dispute Mistakes on Your Credit Report

This is one thing that a lot of business owners do not realize they can do to build business credit score. Once you are able to see your business credit report, be sure to dispute any mistakes you find. Do this in writing. When you send the letter, you have to be very detailed about what the mistake is. Be clear about the correct information, and send copies of supporting documents. These are documents like receipts and cancelled checks. Additionally, use certified mail to send dispute information. .

Dispute your or your business’s Equifax report by following the instructions here: www.equifax.com/small-business-faqs/#Dispute-FAQs.

You can dispute mistakes on your or your business’s Experian report by following the instructions here: www.experian.com/small-business/business-credit-information.jsp.

And D&B’s PAYDEX Customer Service contact number is here: www.dandb.com/glossary/paydex.

Share our foolproof business credit building checklist and tell your friends about how you’re building business credit the quick and easy way.

3. Do Business with SBFE Members

The Small Business Finance Exchange collects information from its members for their database. They then provide this information to partner credit agencies. These credit agencies can then distribute that information to other SBFE members seeking credit data on potential borrowers. Consequently, by doing business with members of the Small Business Exchange, you ensure that the credit agencies have as much information as possible related to your business.

4. Work on Credit Utilization

It’s important to remember that using too much of your available credit can cause problems. Your credit utilization, as indicated by your debt-to-credit ratio, needs to stay as low as possible. So you cannot use up every bit of credit you have. Carrying balances close to your limits will raise this ratio. As a result, your credit score will go down. Granted, you need to carry balances and make payments to get those payments reported. However, avoid getting too close to your limits.

5. Don’t Forget About Your Personal Credit Score

Despite the fact that business credit is separate from your personal credit, there are some business credit reporting agencies, like Experian Business and FICO SBSS, that use your personal credit history in the calculation. As a result, it is possible for a poor personal credit score to have a negative effect on your business credit score. So don’t neglect it.

Follow These Tips and You Can Build Business Credit Score

Here’s the thing. It will not do you any good to get more accounts reporting, correct mistakes, or work with SBFE members if you are not making payments on time. Regardless of how much credit you have available and how little you are using, not paying will tank your score fast. Hence, it will totally negate any progress you make to build business credit score. You just have to pay, on-time, and consistently.

Whether you are starting from scratch or trying to build up a bad score, trying to build business credit score can be completely overwhelming. Honestly, you have to start somewhere though, right? These tips can help you find a good starting point, and from there you just keep swimming.

The post 5 Awesome Ways to Build Business Credit Score appeared first on Credit Suite.

Just Funded… $50,000 in Unsecured Credit Lines

Congratulations to our successful graphics design company client who received $50,000 in unsecured credit lines!

They’ll be using their newly acquired funds to implement marketing strategies to grow and scale their business.

Click Here to see how much funding you can get for your business.

The post Just Funded… $50,000 in Unsecured Credit Lines appeared first on ROI Credit Builders.

What’s the Best Way to Build Business Credit? We Have the Secret!

Learn the Best Way to Build Business Credit We can show you the best way to build business credit! Get the kind of business funding that can take your business to new heights! The Best Way to Build Business Credit – But What’s Business Credit, Anyway? Small business credit is credit in a business’s name. … Continue reading What’s the Best Way to Build Business Credit? We Have the Secret!

What’s the Best Way to Build Business Credit? We Have the Secret!

Learn the Best Way to Build Business Credit

We can show you the best way to build business credit! Get the kind of business funding that can take your business to new heights!

The Best Way to Build Business Credit – But What’s Business Credit, Anyway?

Small business credit is credit in a business’s name. It doesn’t link to a business owner’s personal credit, not even if the owner is a sole proprietor and the sole employee of the small business.

Accordingly, a business owner’s business and individual credit scores can be very different.

The Benefits

Because business credit is distinct from consumer, it helps to secure a business owner’s personal assets, in the event of a lawsuit or business bankruptcy.

Also, with two separate credit scores, a business owner can get two different cards from the same merchant. This effectively doubles buying power.

Another benefit is that even start-ups can do this. Heading to a bank for a business loan can be a recipe for frustration. But building company credit, when done the right way, is a plan for success.

Individual credit scores rely on payments but also various other factors like credit usage percentages.

But for company credit, the scores actually just hinge on whether a company pays its debts on a timely basis.

The Best Way to Build Business Credit – The Process

Building business credit is a process, and it does not occur automatically. A business will need to actively work to build company credit.

Nonetheless, it can be done easily and quickly, and it is much speedier than building consumer credit scores.

Merchants are a big aspect of this process.

Undertaking the steps out of order will lead to repetitive rejections. Nobody can start at the top with business credit. For example, you can’t start with retail or cash credit from your bank. If you do, you’ll get a denial 100% of the time.

The Best Way to Build Business Credit – Enhancing Company Fundability

A company must be fundable to credit issuers and vendors.

Therefore, a company will need a professional-looking web site and email address. And it needs to have site hosting bought from a vendor like GoDaddy.

Also, business telephone and fax numbers must have a listing on ListYourself.net.

Also, the business telephone number should be toll-free (800 exchange or comparable).

A business will also need a bank account dedicated strictly to it, and it needs to have all of the licenses essential for operation.

Licenses

These licenses all have to be in the exact, appropriate name of the company. And they need to have the same business address and telephone numbers.

So bear in mind, that this means not just state licenses, but possibly also city licenses.

Learn more here and get started toward establishing small business credit.

The Best Way to Build Business Credit – Working with the IRS

Visit the IRS website and get an EIN for the small business. They’re totally free. Select a business entity such as corporation, LLC, etc.

A company can begin as a sole proprietor. But they will more than likely wish to change to a type of corporation or an LLC.

This is in order to limit risk. And it will optimize tax benefits.

A business entity will matter when it pertains to taxes and liability in case of litigation. A sole proprietorship means the owner is it when it comes to liability and tax obligations. No one else is responsible.

Sole Proprietors Take Note

If you operate a business as a sole proprietor, then at the very least be sure to file for a DBA. This is ‘doing business as’ status.

If you do not, then your personal name is the same as the company name. Hence, you can wind up being personally accountable for all small business debts.

In addition, according to the IRS, by having this arrangement there is a 1 in 7 possibility of an IRS audit. There is a 1 in 50 possibility for corporations! Avoid confusion and significantly reduce the chances of an Internal Revenue Service audit as well.

The Best Way to Build Business Credit – Starting Off the Business Credit Reporting Process

Begin at the D&B website and obtain a cost-free D-U-N-S number. A D-U-N-S number is how D&B gets a small business into their system, to produce a PAYDEX score. If there is no D-U-N-S number, then there is no record and no PAYDEX score.

Once in D&B’s system, search Equifax and Experian’s web sites for the business. You can do this at www.creditsuite.com/reports. If there is a record with them, check it for correctness and completeness. If there are no records with them, go to the next step in the process.

By doing this, Experian and Equifax will have something to report on.

Vendor Credit Tier

First you should build trade lines that report. This is also known as the vendor credit tier. Then you’ll have an established credit profile, and you’ll get a business credit score.

And with an established business credit profile and score you can begin to obtain credit in the retail and cash credit tiers.

These kinds of accounts tend to be for the things bought all the time, like marketing materials, shipping boxes, outdoor work wear, ink and toner, and office furniture.

But first off, what is trade credit? These trade lines are credit issuers who will give you starter credit when you have none now. Terms are often Net 30, versus revolving.

Hence, if you get approval for $1,000 in vendor credit and use all of it, you need to pay that money back in a set term, like within 30 days on a Net 30 account.

Details

Net 30 accounts have to be paid in full within 30 days. 60 accounts need to be paid in full within 60 days. In comparison with revolving accounts, you have a set time when you have to pay back what you borrowed or the credit you made use of.

To begin your business credit profile the proper way, you should get approval for vendor accounts that report to the business credit reporting agencies. When that’s done, you can then make use of the credit.

Then pay back what you used, and the account is on report to Dun & Bradstreet, Experian, or Equifax.

Vendor Credit Tier – It Helps

Not every vendor can help in the same way true starter credit can. These are vendors that will grant an approval with very little effort. You also need them to be reporting to one or more of the big three CRAs: Dun & Bradstreet, Equifax, and Experian.

You want 5 to 8 of these to move onto the next step, which is the retail credit tier. But you may have to apply more than once to these vendors. So, this is to verify you are dependable and will pay punctually. Here are some stellar choices from us: https://www.creditsuite.com/blog/5-vendor-accounts-that-build-your-business-credit/

The Best Way to Build Business Credit – Accounts That Do Not Report

Non-Reporting Trade Accounts can also be helpful. While you do want trade accounts to report to a minimum of one of the CRAs, a trade account which does not report can yet be of some worth.

You can always ask non-reporting accounts for trade references. And also credit accounts of any sort will help you to better even out business expenditures, thereby making budgeting less complicated. These are companies like PayPal Credit, T-Mobile, and Best Buy.

Retail Credit Tier

Once there are 5 to 8 or more vendor trade accounts reporting to at least one of the CRAs, then move to the retail credit tier. These are service providers like Office Depot and Staples.

Just use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use the small business’s EIN on these credit applications.

One good example is Lowe’s. They report to D&B, Equifax and Business Experian. They need to see a D-U-N-S and a PAYDEX score of 78 or higher.

Fleet Credit Tier

Are there 8 to 10 accounts reporting? Then move to the fleet credit tier. These are companies such as BP and Conoco. Use this credit to purchase fuel, and to fix, and maintain vehicles. Only use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, make sure to apply using the business’s EIN.

One such example is Shell. They report to D&B and Business Experian. They want to see a PAYDEX Score of 78 or better and a 411 business phone listing.

Shell might say they want a specific amount of time in business or revenue. But if you already have enough vendor accounts, that won’t be necessary. And you can still get approval.

Learn more here and get started toward establishing small business credit.

Cash Credit Tier

Have you been responsibly handling the credit you’ve up to this point? Then move to the cash credit tier. These are businesses such as Visa and MasterCard. Just use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use your EIN instead.

One example is the Fuelman MasterCard. They report to D&B and Equifax Business. They want to see a PAYDEX Score of 78 or higher. And they also want you to have 10 trade lines reporting on your D&B report.

Plus, they want to see a $10,000 high credit limit reporting on your D&B report (other account reporting).

Additionally, they want you to have an established company.

These are businesses such as Walmart and Dell, and also Home Depot, BP, and Racetrac. These are normally MasterCard credit cards. If you have 14 trade accounts reporting, then these are doable.

Learn more here and get started toward establishing small business credit.

The Best Way to Build Business Credit – Monitor Your Business Credit

Know what is happening with your credit. Make certain it is being reported and deal with any inaccuracies ASAP. Get in the habit of taking a look at credit reports and digging into the specifics, and not just the scores.

We can help you monitor business credit at Experian and D&B for 90% less than it would cost you at the CRAs. See: www.creditsuite.com/monitoring.

At Equifax, you can monitor your account at: www.equifax.com/business/business-credit-monitor-small-business. Equifax costs about $19.99.

Update Your Data

Update the data if there are mistakes or the data is incomplete. At D&B, you can do this at: https://iupdate.dnb.com/iUpdate/viewiUpdateHome.htm. For Experian, go here: www.experian.com/small-business/business-credit-information.jsp. So for Equifax, go here: www.equifax.com/business/small-business.

The Best Way to Build Business Credit – Fix Your Business Credit

So, what’s all this monitoring for? It’s to challenge any inaccuracies in your records. Mistakes in your credit report(s) can be taken care of. But the CRAs normally want you to dispute in a particular way.

Get your company’s PAYDEX report at: www.dnb.com/about-us/our-data.html. Get your company’s Experian report at: www.businesscreditfacts.com/pdp.aspx?pg=SearchForm. And get your Equifax business credit report at: www.equifax.com/business/credit-information.

Disputes

Disputing credit report inaccuracies generally means you mail a paper letter with duplicates of any proof of payment with it. These are documents like receipts and cancelled checks. Never mail the original copies. Always send copies and keep the original copies.

Fixing credit report inaccuracies also means you precisely itemize any charges you dispute. Make your dispute letter as clear as possible. Be specific about the concerns with your report. Use certified mail so that you will have proof that you mailed in your dispute.

The Best Way to Build Business Credit – A Word about Building Business Credit

Always use credit smartly! Don’t borrow more than what you can pay off. Monitor balances and deadlines for payments. Paying promptly and in full will do more to raise business credit scores than nearly anything else.

Building company credit pays. Good business credit scores help a small business get loans. Your credit issuer knows the small business can pay its financial obligations. They recognize the small business is bona fide.

The business’s EIN links to high scores and lenders won’t feel the need to ask for a personal guarantee.

The Best Way to Build Business Credit – Takeaways

Business credit is an asset which can help your company for many years to come. Learn more here and get started toward growing small business credit.

The post What’s the Best Way to Build Business Credit? We Have the Secret! appeared first on Credit Suite.

Affordable Credit Cards Help to Leave Fees Behind

Low-cost Credit Cards Help to Leave Fees Behind

Reduced rate of interest bank card are cards that supply substantial buying power for customers while reducing their general financial obligation tons. The term might appear ‘deal cellar’, however it is making good sense to a growing number of customers.

You must take into consideration all costs while looking for a reduced rate of interest bank card including, consisting of yearly costs, equilibrium transfers, as well as any type of additional appropriate costs.

Additional Fees

Charge card charges can usually be stayed clear of, however still call for an extensive understanding. When these costs are all existing in a charge card use it might be a good idea to stay clear of the deal entirely. Some charges will certainly be inevitable, yet others are totally preventable.

Different added costs consist of:

– Late repayment charges
– Set-up costs
-” Over-the-credit-limit” charges
– Return things charges
– Fees for orders made by telephone

Equilibrium Transfer Fees

Reduced Interest credit report cards are usually made use of in moving equilibriums from a greater passion price credit rating card to a brand-new reduced rate of interest price card. The ideal cards will certainly provide no transfer charges or incredibly reduced initial yearly percent prices (APR).

Yearly Fees

Bank card deals will normally note the quantity needed as a yearly charge. Numerous economical charge card deals have actually removed this charge in “basic usage” cards, however might still need them for their particular incentives programs. See to it to comprehend what yearly cost is being billed as well as if it makes monetary feeling for your circumstance.

After that it is crucial for you to make certain you locate a card with the least costs, if you are a customer that pays your credit rating card off each month. Affordable bank card been available in a selection of arrangements as well as fast paying customers can be punished for approving a card which contains charges that can be evaluated also when the card is not being made use of.

Are These Fees Hidden?

When you use, Credit card business should provide all costs linked with your card choice. Checking out the deal in its whole is the only method to ensure you have actually the understanding required to make smart use the charge card.

Review

Low-cost bank card are frequently specified by their reduced rate of interest and also less included functions such as luxurious benefits programs. A number of economical credit score cards have benefits programs, however the incentives might be less or much less pricey.

The charge card industry is very affordable, which has actually caused a wide range of selection in the field of non-mortgage consumer debt. By recognizing the different facets of non-mortgage consumer debt, you have the power to pick a card that finest fits your way of living as well as investing practices.

An on-line search of the bank card supplies that suit your demands is an advantageous means to contrast the range of aspects of a bank card deal. When a customer is efficiently matched with the very best bank card for their scenario, it shows a feeling of customer empowerment that is expanding with every on-line bank card contrast.

Credit history card charges can frequently be prevented, however still need a detailed understanding. When these costs are all existing in a credit report card supply it might be smart to stay clear of the deal entirely. The finest cards will certainly provide no transfer costs or extremely reduced initial yearly portion prices (APR). Credit scores card deals will usually provide the quantity called for as a yearly charge. Lots of inexpensive credit history card deals have actually removed this charge in “basic usage” cards, however might still need them for their corresponding benefits programs.

The post Affordable Credit Cards Help to Leave Fees Behind appeared first on ROI Credit Builders.

Time for a Change? 6 Reasons to Swap Your Old Card for a New Business Credit Card

…And How to Find the Best New Business Credit Card for Your Business

Just as Thor has his hammer and Captain America has his shield, every business super hero needs an ultimate tool. You cannot really call them all weapons right? I mean, a shield is not about destroying, but about protection. Everyone knows a hammer is a tool. So, in short, tools can be used as weapons, and superhero tools can serve a variety of purposes, all for the greater good. So too, can your business credit cards. Sometimes, however, it is necessary to pursue a new business credit card, also for the greater good. How do you know when that time has come? Read on and we’ll tell you.

How Do You Know It’s Time for a New Business Credit Card?

You might not think it’s a hard decision. Most business owners fall into two camps. Either they are happy with their card and there is no need for a new one, or you just get a new card whenever you feel like it. Unbeknownst to most, there actually is a right time and a wrong time to get a new business credit card. Not only that, but there is also a right and a wrong way to handle the old one. We can help you with both.

It might be time to ditch the old business credit card and get a new one if:

1. The Fee is More than the Benefits are Worth

Maybe you are paying a hefty annual fee, but you justify it by weighing it against the rewards and interest rate you receive with the card. It’s always wise to review that however. Next time you are about to fork over that fee, take a look at what your options are. Do you actually use the rewards offered with that credit card? Are the rewards based on fuel spending and maybe you don’t travel? Perhaps the rewards are at dining establishments you do not frequent.

Is that interest rate really the best? Maybe you had a great promotional rate when you first got the card but now it’s nothing special. Maybe the interest rate was the best available at the time but you are not so sure any more.

If either or both of these situations sound familiar, it may be time to ditch the old card and look for a new business credit card. There is no point in paying the annual fee if you are no longer reaping the benefits that made you willing to pay it in the beginning.

2. Your Spending Habits Have Changed

Have you outgrown the credit limit on your own card? Maybe you spend more now that your business has grown. It could also be that you spend on different things now. In the beginning you may have used your card mostly for business supplies and sales dinners, whereas now you may use the funds for travel expenses and inventory more often.

Things change, and those things include spending habits. The card that worked for your spending habits before may not be the best option for your current spending habits. Take a look at what you have versus what’s available in light of this, and you may see its time to ditch your old card and get a new one.

3. You Now Qualify for Better Perks

For most business owners, their first business credit card is the first one for which they qualify for approval. As your business, and your credit score, grows, you can get so much more. If it’s been awhile since you shopped around, or if you see that you are getting unsolicited offers for cards that offer better perks than your currently have, it may be time to check out what new business credit cards are out there and ditch your old one.

Hit the jackpot with our best webinar and its trustworthy list of seven vendors who can help you build business credit.

4. You Can Get a Better Interest Rate with a New Business Credit Card

Another thing that you can get stuck with in the beginning, simply because you qualify for nothing better, is a lousy interest rate. After you spend some time managing your business, and your finances, wisely, you are likely eligible for much better.

You can start with calling your current credit card company, but if they won’t budge, it’s time to drop the old card and start looking for a new business credit card.

5. There is Any Better Offer With No Fee

Aside from a lousy interest rate and non-existent or useless perks, you can get stuck with an annual fee. Sometimes the fee it worth it for the perks. However, it is important to keep watch for cards that have better perks, better rates, and no annual fee. Even if you get the same perks and the same rates, if there is no fee you are better off. If you are getting offers that do not include an annual fee, it might be time to find a new business credit card.

6. You Anticipate an Upcoming Large Purchase

Sometimes it is simply a matter of dollars. If you foresee a larger purchase in the near future, you may need to start looking for a new card. For example, if you need to buy a new industrial refrigerator or oven, or both, you might not want to put that on a card you use for regular purchases. Not only can it mess with the amount of funds you have available, but often you can find great deals on interest rates from dealers that sell what you are looking to buy. It can help to save money and manage finances, by keeping larger purchases separate, if you just go ahead and open a new business credit card.

Bonus: Your Old Card Is Connected to Your Personal Credit Score

You need your business cards to be based on and reporting to your business credit. In the beginning however, most businesses do not have business credit. They can get cards based on their personal credit score, so they never even think about business credit.

When it comes to running a business however, business credit is better.

If you have great personal credit, you may think business credit is a non-issue. Regardless of what your personal credit looks like, as a business owner it is important that you begin to build business credit. Here’s why.

If you use business credit to handle business transactions, your personal finances will not be affected by those transactions. This means that if your business fails, your personal credit score will stay intact. Also, you will not be personally liable for your business debts.

In addition, paying business expenses with personal credit cards can keep balances near the credit limit. This is true even if you pay everything off each month. Business expenses are large, and personal credit cards usually have smaller limits than business credit cards.

Your debt-to-credit ratio is affected by this. That will negatively affect your personal credit score even if you make payments on time.

How to Build Business Credit

You know the why, now here’s the how.

Get an EIN

It is a number for your business, kind of like your personal SSN. Apply on the IRS website. It doesn’t cost anything, and you can use it on business credit applications instead of your SSN. You may still need to provide your SSN for fraud prevention, but it will not be used to access your personal credit score.

Formally Incorporate

A business must be incorporated to have business credit. The idea is that your business needs to be established as an entity separate from yourself in every way. Incorporation not only accomplishes that, but it also offers you some liability from business debts.

Dedicated Contact Information

You need a dedicated business address and telephone number. The phone number should be toll free, and the business should be listed in the directories with its own contact information.

Professional Website and Email

All businesses these days need a professional, user friendly website to be able to compete. You also need an email address that is specifically for the business. Do not use a free email service such as Gmail or Yahoo. The business email address should use the same URL as the business website.

Business Bank Accounts

A separate business banking account is a must. You can pay yourself from this account, but do not run personal expenses through it.

You Need a D-U-N-S Number

Yes, another number. This time it comes from Dun & Bradstreet. They are the largest and most commonly used business credit reporting agency, so having a credit report with them is necessary for getting business credit. The number is free on the D&B website, but they will try to sell you other services. You don’t need any of them.

A Quick Note on How to Start Building Business Credit

Once you accomplish this, it is time to work on building your business credit score. There is a process, and you have to work your way through it patiently. It takes time, but the payoff is big.

Hit the jackpot with our best webinar and its trustworthy list of seven vendors who can help you build business credit.

The Vendor Credit Tier

This is your way in. These are vendors that will extend net 30 terms on invoices and then report your payments to the credit reporting agencies. Once they start doing that, your business credit score will be established and grow from there.

This tier includes vendors such as Quill.com, Granger, and Uline that sell items you can use in your business every day. Make a few purchases with net 30 terms, make your payments on time, and watch your business credit score explode. Find more about vendors that can help you build business credit here.

Working Through the Credit Tiers

After you have 7 to 10 accounts reporting from the vendor credit tier, it should be possible to get approval in the retail credit tier. These are credit cards attached to specific stores such as Best Buy, Amazon, and Office Depot.

After you have several accounts reporting from the retail credit tier, you will qualify for cards in the fleet credit tier. These cards are issued by companies like Shell, Fuelman, and WEX to be used for fuel and vehicle repair and maintenance.

The last tier is the cash credit tier. When you have enough accounts reporting from each tier, and if you are keeping current on all your payments, your score will be strong enough to get your approval for these cards. They are general credit cards such as MasterCard and Visa that are not attached to a specific store. Typically, they have higher limits and more rewards options.

What to Look for in a New Card

This part is easy. You want something, everything if possible, to be better than the old card. Your old tool should by default be more powerful than the old one.

Annual Fee– Whether the fee is the actual reason for the change or not, if you are changing anyway look for the lowest annual fee possible that also fulfills all your other needs.
Interest Rate– Again, maybe you are changing specifically for the lower rate, and maybe you aren’t. Either way you need to find the lowest interest rate possible that still gives you everything else you need.
Perks– look for perks you will actually use. If it’s all travel miles and you never travel, there is no point.
Credit Limit– A limit that will not handle your spending habits or the amount of your new purchase isn’t going to do you any good. Look for the highest limit you are eligible for. Remember that if you do not use it all, it will only help your debt-to-credit ratio, which in turn helps your credit score.

Hit the jackpot with our best webinar and its trustworthy list of seven vendors who can help you build business credit.

As with all things, you can do an analysis of the cost versus the benefit. If the annual fee means you get a super low interest rate or perks that will save you several hundred dollars a year, it may be worth it. Before you make a decision, consider this in light of the reason why you are changing versus what is available to you at the moment.

Should You Shut Down the Old Card?

This is where it can get iffy. You might think it obvious that you close the old account. That is not always the best option however. It can actually be beneficial to keep it open.

The average age of all of the accounts on your credit report affects your credit score. The older your accounts are, the better it is for your score. Opening a new account already lowers that average, so closing an older account is going to lower it even further.

If you have had the account for a while, it might be better to zero it out and keep it active. Be sure to determine what level of activity is necessary to keep the account active. If you have to make a small monthly purchase and pay it off every month or so it may be worth it to keep and older account open.

Is it Time for a New Business Credit Card?

The short answer is, maybe. If your credit is at a point where you can get better rates and incentives with a lower annual fee, then it is time to get a new card. If your credit limit on your old card can’t support your current or changing spending habits, it’s time for a new card. Lastly, if your business credit cards are on your personal credit report, it’s time to build business credit and get a new business credit card.

The post Time for a Change? 6 Reasons to Swap Your Old Card for a New Business Credit Card appeared first on Credit Suite.

The post Time for a Change? 6 Reasons to Swap Your Old Card for a New Business Credit Card appeared first on Buy It At A Bargain – Deals And Reviews.

Time for a Change? 6 Reasons to Swap Your Old Card for a New Business Credit Card

…And How to Find the Best New Business Credit Card for Your Business

How Do You Know It’s Time for a New Business Credit Card?

It might be time to ditch the old business credit card and get a new one if:

1. The Fee is More than the Benefits are Worth

2. Your Spending Habits Have Changed

3. You Now Qualify for Better Perks

Hit the jackpot with our best webinar and its trustworthy list of seven vendors who can help you build business credit.

4. You Can Get a Better Interest Rate with a New Business Credit Card

You can start with calling your current credit card company, but if they won’t budge, it’s time to drop the old card and start looking for a new business credit card.

5. There is Any Better Offer With No Fee

6. You Anticipate an Upcoming Large Purchase

Bonus: Your Old Card Is Connected to Your Personal Credit Score

When it comes to running a business however, business credit is better.

Your debt-to-credit ratio is affected by this. That will negatively affect your personal credit score even if you make payments on time.

How to Build Business Credit

You know the why, now here’s the how.

Get an EIN

Formally Incorporate

Dedicated Contact Information

You need a dedicated business address and telephone number. The phone number should be toll free, and the business should be listed in the directories with its own contact information.

Professional Website and Email

Business Bank Accounts

A separate business banking account is a must. You can pay yourself from this account, but do not run personal expenses through it.

You Need a D-U-N-S Number

A Quick Note on How to Start Building Business Credit

Once you accomplish this, it is time to work on building your business credit score. There is a process, and you have to work your way through it patiently. It takes time, but the payoff is big.

Hit the jackpot with our best webinar and its trustworthy list of seven vendors who can help you build business credit.

The Vendor Credit Tier

Working Through the Credit Tiers

What to Look for in a New Card

This part is easy. You want something, everything if possible, to be better than the old card. Your old tool should by default be more powerful than the old one.

Annual Fee– Whether the fee is the actual reason for the change or not, if you are changing anyway look for the lowest annual fee possible that also fulfills all your other needs.
Interest Rate– Again, maybe you are changing specifically for the lower rate, and maybe you aren’t. Either way you need to find the lowest interest rate possible that still gives you everything else you need.
Perks– look for perks you will actually use. If it’s all travel miles and you never travel, there is no point.
Credit Limit– A limit that will not handle your spending habits or the amount of your new purchase isn’t going to do you any good. Look for the highest limit you are eligible for. Remember that if you do not use it all, it will only help your debt-to-credit ratio, which in turn helps your credit score.

Hit the jackpot with our best webinar and its trustworthy list of seven vendors who can help you build business credit.

Should You Shut Down the Old Card?

This is where it can get iffy. You might think it obvious that you close the old account. That is not always the best option however. It can actually be beneficial to keep it open.

Is it Time for a New Business Credit Card?

The post Time for a Change? 6 Reasons to Swap Your Old Card for a New Business Credit Card appeared first on Credit Suite.

Business Credit Card Rates: Everything You Might Need to Pay

Find Out What Hidden Business Credit Card Rates to Look For and How to Avoid Them

Credit cards are a fact of life for most small businesses. They get a bad rap, but used properly they can be hugely beneficial. It is a precarious walk on a balance beam, however, to balance the benefits versus the cost. When you think of business credit card rates, the first thing that comes to mind is probably interest rates. These are, of course, one of the largest costs of credit cards. They are also widely variable, ranging from as low as 0% for an introductory rate to almost 30% in some cases.

There are many more costs that can be associated with these cards however. So many in fact, that many business owners do not even realize the business credit card rates they are paying. It can be frustrating to continually make payments yet never see a corresponding decrease in the balance. We dug in to find out everything you need to know about the business credit card rates you know, those you don’t know, and how to handle or avoid each one.

Business Credit Card Rates: The Devil You Know

Here are some common business credit card rates you are probably familiar with, and some tips on how to save on each.

Check out our professional research and score the best business credit cards for your business.

Interest

This is a given with any credit card, and most likely the number one cost most associate with them. The only way to avoid it is to pay off the entire balance every month. Short of that, it cannot be eliminated. It can be reduced however.

First, keep your personal and business credit score strong. The better the score, the lower the interest rate options available to you. Then, shop around. Just look for the cards with the best rates. Be aware however, many lower rates are promotional only, so they will go up after a set period of time.

Annual Fees

When it comes to business credit card rates, this one is no secret either. Many cards charge an annual fee for the administration of the account. Most often they are associated with cards that earn rewards such as miles or points that can be converted to gift cards, airline miles, or cash back. The key to keeping annual fee costs to a minimum is to simply use cards that do not charge this fee.

If, however, you find a card with a fee that has rewards that you will use to the point that you recover the cost of the fee plus some, then the benefit may outweigh that cost. There could be other benefits associated with a card that charges a fee as well. A cost-benefit analysis based on your specific business situation is the only way to know if it is worth it.

Late Fees

This one is self-explanatory. Late fees are charged to your card when you pay after the due date. The best way to avoid them is to not pay late. However, know that if you do pay late and it is a first offense, you may be able to have that fee removed. You have to call and ask. It doesn’t always work, but sometimes it does for a first offender.

Hidden Business Credit Card Rates

Now for the part you are really wondering about. What are you paying that you do not realize? How much could you save if you knew about these things and either avoided them or chose cards that did not charge them? Here are the hidden costs to look for, and how to reduce or avoid them all together.

Balance Transfer Fees

These are fees on balances that you transfer from another card. Typically this would be done in an effort to get a lower, promotional interest rate on the balance transfer. Usually the fee is a percentage of the amount being transferred with some minimum. So if, for example, you were to transfer $3,000 and the transfer fee was 3%, your balance on the new card would increase by $3,090.

The only way to avoid this is to not do a balance transfer. Of course, there could be cases where the savings with the promotional rate makes it worth the fee. That will have to be determined on an individual basis.

Cash Advance Fees

These are just as they sound, fees paid on cash advance funds. Similar to balance transfer fees, they are typically a percentage of the advance. Cash advances can come in the form of cash advance checks that you simply write and deposit into your account, or funds that you get from an ATM with your credit card and a cash advance PIN. If you do not do cash advances with your credit card, you do not have to worry about this fee.

Reward Redemption Fees

Did you know that sometimes you have to pay a fee on rewards that you earn? The credit card companies say that this is to pay for the processing of the rewards. Avoid these fees by reading the fine print in the rewards section before you apply for the card. Most do not even know that these fees exist, and sometimes they end up costing more than the rewards are even worth.

Reward Recovery Fees

This fee is closely related to late fees. Some cards revoke rewards earned during the month if you are late on your payment for that month. They then charge a fee to reinstate those rewards. To avoid this fee, be sure to pay on time.

Inactivity fees and Account Closure Fees

The inactivity fee is assessed after you go a certain length of time without any activity on the card. Most often that amount of time is one year. The first thing you have to do to avoid this fee is know which cards have if. After you determine that, figure out the minimum you must spend in a year to avoid the fee. Then, either make certain you spend that amount, or cancel the card.

Beware however, because some cards do charge a fee for closing accounts.

Payment Protection

Most cards offer a payment protection plan. This is basically insurance that will cover your payments in the event you become ill or unemployed. While is sounds great, it can be quite expensive and add up quickly. Avoid it by either opting out on the front end, or canceling it if you already have it and do not want to pay it.

Paper Statement

The push to save the environment is a noble one, and the credit card companies are doing their part. One way they are doing this is by charging a fee for paper statements. You can opt in for electronic statements and avoid paying the fee.

Foreign Transactions

Did you know that if you use your credit card to pay for goods from a company that is not located in the United States, you may have to pay a fee for that transaction? This is true even if you never leave the country, and even if you do not know the other company is foreign. Read the fine print about fees before making any purchases from companies you are not familiar with to determine if this will be an issue.

Taxes on Rewards

While this isn’t exactly a credit card fee, it is a potential hidden cost of using credit cards. There are times when, depending on how rewards are earned and how they are used, that you may have to pay taxes on them. Find out more about this and how to avoid it here.

Check out our professional research and score the best business credit cards for your business.

Here’s the big key to avoiding unexpected fees and costs. Know what to look for. Now that you have a list of the most common hidden credit card costs, you can be diligent to pay close attention on the front end and not apply for any credit cards that charge fees you do not want to pay.

No one wants to pay more than they have to. On the other hand, some of these fees may be worth it to you to pay depending on the benefit associated with it and whether or not your specific business could benefit. For example, if you have a chronic health issue, it may be worth it to you to pay for the payment protection plan.

Why Business Credit Card Rates May Be Worth It: Benefits of Business Credit Cards

While all these costs can make it seem that credit cards are the devil, and though they do get a bad rap, there are actually plenty of benefits to using business credit cards. Here are just a few:

Build business credit
Finance business needs without the hassle of a loan, including:
- Taking advantage of special bulk pricing
- Equipment maintenance and repair
- Working capital
- Unexpected, or expected, cash gaps
Use rewards to reduce costs

Of course, we all know credit can get out of hand, but used properly and with the proper attention to business credit card rates, they can be an amazing tool for your business.

How Can They Help Build Business Credit?

Not only can these cards help you build business credit, they are actually vital to the process. Of course, regardless of the business credit card rates, you will have to have business credit to get business credit. That is why you start with vendors in the vendor credit tier first. These vendors will give you net 30 terms on invoices and report those payments to the credit reporting agencies, without a credit check. After you have enough of these accounts reporting, you will have enough business credit to apply for your first business credit cards.

You’ll start with store cards. Cards tied to retail stores such as Best Buy, Office Depot, and Lowes will approve accounts with very new business credit earned from accounts in the vendor credit tier. They will also report payments to the credit agencies, which will further grow your score

After enough of these are reporting, you can apply for cards in the fleet credit tier and the cash credit tier. As these cards report your on-time payments, your score will only grow stronger. This will also mean you start getting offers from cards with more favorable business credit card rates, such as lower interest. Find out more about the credit tiers and building business credit using credit cards in each one here.

Side Note: Hidden Business Credit Card Rates When Accepting Credit Cards

Just as there are hidden fees when it comes to using credit cards in the course of your business, there are also hidden rates on the other side. If you accept cards as payment in the course of your business, be aware of these little-known costs.

Manual entry fee

Did you know that it costs your business more in credit card processing fees if you manually enter the credit card number rather than swiping it? It’s because of the increased security risk. If at all possible, make sure customers swipe instead of type in the number.

Check out our professional research and score the best business credit cards for your business.

Below Limit Costs

Okay so this isn’t an “extra” fee per se, but it is a definite cost. It is entirely possible that you can lose money on a credit card sale if it doesn’t hit a certain dollar amount. This is because the business credit card rate on processing that transaction may actually be more than the profit earned from it.

That’s why you see many businesses, such as donut shops and other businesses with frequent low dollar amount purchases, require a minimum purchase if you intend to use a card. This not only avoids the problem of losing money on low dollar amount purchases due to processing fees, but it can increase profits when you consider the number of people that do not carry cash.

Stop Paying Business Credit Card Rates You Do Not Know About

It is impossible to find a card with no unsavory fees. The key is to determine which ones are worth it to you to pay. Then, apply only for cards that charge business credit card rates you are willing to pay. The credit card industry is fiercely competitive, and if your business credit score is solid, you can have your pick of the cards that will work best for you.

The post Business Credit Card Rates: Everything You Might Need to Pay appeared first on Credit Suite.

The post Business Credit Card Rates: Everything You Might Need to Pay appeared first on BUSINESS DEMO WEBSITES.

The post Business Credit Card Rates: Everything You Might Need to Pay appeared first on Buy It At A Bargain – Deals And Reviews.

Do You Owe Tax on Business Credit Card Rewards? The Answer Might Surprise You

And 3 Surprising Things Other than Tax on Business Credit Card Rewards that May Impact Your Taxes

When choosing a credit card, whether personal or business, there are several factors to compare. Interest rate is probably the one most consumers consider first, followed closely by credit limit, and then rewards. Throw an annual fee in the mix, and you have even more to ponder. Back to the rewards thing though. Who doesn’t love a good reward? Cash back, points, airline miles galore, these are often the things that make the choice between one card or the other most interesting. When it comes to rewards however, one thing most do not consider is that they may have to pay a tax on business credit card rewards.

When Do You Have to Pay Tax on Business Credit Card Rewards?

Whether or not you pay tax on credit card rewards on your business credit cards will depend. Depends on what you ask? It depends on whether you had to spend money to get those rewards. For example, if you earn cash back, that would be a discount rather than income. It is therefore not taxable. The same is true if you earn points or travel miles as a percentage of the money you spend. If you earn $1 cash back for every $5 spent, that is considered a $1 discount, not $1 of income, and therefore not taxable.

If, however, all you had to do was open the account to earn the reward, and you did not have to spend anything to get it, then you may have to report it as income. This is the case with the bonuses that many credit card companies are fond of offering for opening an account with them. They may come in the form of cash, points, or miles. It doesn’t matter what form they take. If you didn’t have to do anything to get them, they are likely going to be taxable.

If your credit card information specifically states the funds are taxable, or if you receive a form 1099 from your credit card company, you can be sure there will be a tax impact. However, the absence of these two things does not set you free. A company only needs to to send a form 1099 if the amount is $600 or greater. Amounts under $600 are still taxable, but companies only have to send a form 1099 if the amount is over $600.

Check out our professional research and score the best business credit cards for your business.

Real Life Example of Tax on Business Credit Card Rewards

In 2012, some Citibank card holders received frequent flyer miles as a gift for opening their accounts. At tax time, a 1099-Misc came in the mail. It indicated the miles had been reported to the IRS as income with a value of 2.5 cents per mile. As you can imagine, this was an unwelcome shock to most. Since they did not have to spend anything to receive the miles, the reward was taxable income.

Special Considerations for Tax on Business Credit Card Rewards

When it comes to tax on rewards from business credit cards, there are some special considerations that can affect the tax impact of the rewards.

Using Rewards to Offset Business Expenses

If you are using business credit card rewards to reduce the cost of business purchases, that affects the amount of a business expense that is tax deductible.

For example, if you purchase a new printer for your business for $300, and you offset the cost with rewards equal to $100, you can only deduct $200 as a business expense. In this way, business credit card rewards can still increase your taxable income, though they are not technically taxable as income directly.

Using Business Credit Card Rewards to Offset Personal Expenses

If you happen to use rewards earned on business credit cards for personal expenses, rather than business expenses, you will not have to worry about them reducing business expense and thus indirectly affecting your tax liability. The question has come up about whether rewards earned on business cards and used for personal purposes should be personal taxable income. The IRS has said no. They will not consider this to be taxable income. As a result, there is zero impact on your taxes from these rewards.

Charitable Donations

If you receive a $500 bonus for opening an account, that is taxable income because no spending took place to get those funds. If, however, you have the option to donate that amount to a charity, you do not have to report that $500 as income. And it is also tax deductible as a charitable contribution. It’s a win/win.

Recap: How Do You Avoid Tax on Business Credit Card Rewards?

What’s the takeaway? To best use your business credit card rewards with minimum tax impact, do the following:

Donate any bonuses, such as rewards not attached to required spending, to charity.
Use rewards such as cash back, points, or miles for personal expenses rather than to reduce business expense.

How Do I Find the Best Business Credit Cards for My Business?

There are a ton of options when it comes to choosing a business credit card, and which one is the best for your business will depend on many factors. The first, as mentioned earlier, should probably be interest rate. You want the interest rate to be as low as possible.

Next, consider the credit limit. Does it give you access to enough funds to handle what you need it to? If you are going to consistently have balances at or near your credit limit, that’s no good. It will lower your debt-to-credit ratio, which directly impacts your credit score in a negative manner.

The next thing to look at is rewards. You need to find the card with the rewards that will be the most useful to you. A great travel rewards program is only great if you travel a lot. Triple points earned at gas stations and restaurants sounds good, but it is only a good deal if you spend a lot of money at gas stations and restaurants. If most of your credit cards spending is on supplies or inventory, these rewards will not be useful to your business.

Check out our professional research and score the best business credit cards for your business.

Next, balance the cost of the rewards versus how much you will actually benefit from them. For example, you may have a card with rewards that are good for you. But if it has a high annual fee, determine if the rewards benefit actually makes up for the cost of the annual fee. Do you pay $100 fee each year? Then be sure to earn more than $100 worth of useable rewards with that card annually.

How To Get Business Credit Cards

Of course, the business credit card discussion is moot if you don’t even have one. Perhaps you have tried, but you can’t get approval. Here’s the key. You need to have strong business credit to get the best business credit cards. This is credit that is separate from your personal credit, and therefore the accounts on your business credit report do not affect your personal credit score.

Business credit doesn’t just happen on its own however, and most new businesses do not realize this. In fact, many new small business owners are not aware that business credit is even a thing, and consequently they have no clue how to set up their business properly to allow them to build business credit.

How Do You Set Up a Business to Build Business Credit?

Before you can worry about tax on business credit card rewards, you have to have business credit cards. Before you can get business credit cards, you need business credit. To get business credit, you have to set up your business to be a separate entity from yourself.

The first step in this process is to incorporate. It is easy for a new business owner to simply operate as a sole proprietorship or a partnership, but this ties up all your personal credit data with your business information. By incorporating, you are taking the first step in separating your business from your personal credit.

Next, apply for an EIN. You can do this for free at IRS.gov. It is a number that functions as an identifier for your business the same way your SSN is a personal identifier. You will use this number on business credit card applications instead of your SSN.

Then, you will need to get a DUNS number. This is a unique identifying number that you get from Dun & Bradstreet. Since D&B is the largest and most commonly used business credit reporting agency, this number is essential to building business credit. Get it for free on the Dun & Bradstreet website, but don’t let them fool you. They will try to sell you a bunch of stuff you don’t need. You really only need the number, and it is free.

Other Things that Will Make Your Business Appear Fundable On its Own to Lenders

What else does your business need to appear as a fundable entity separate from you personally?

A phone number and address that is different from your personal phone number and address. The phone number should be through a toll -free exchange and listed in the directories along with the business name and address.
A business bank account that all business transactions run through. Not only does this help separate your business as its own entity, but it also makes it easier to separate business expenses come tax time. In addition, some lenders actually make a business bank account a requirement for approval.
A professional website and dedicated email address. The email address should have the same URL as the website, and the web address should be something professional and paid for. A free email or website service is not suitable for these purposes.

Surprise! Here Are 3 Other Things that are Taxable that May Not Know

Now you know whether or not your credit cards rewards are taxable, how to avoid tax impact from business credit card rewards as much as possible, and how to get the best business credit cards for your business. How about a few fun facts? Here are 3 things that are taxable that you probably did not realize.

Bitcoin

Yes, if your bitcoin is currently worth more than you paid for it, the gains are taxable just like with stocks and bonds. This also rings true of Bitcoin you get from your employer as compensation, a bonus, incentive, or even as a gift.

Gifts from an Employer

Speaking of gifts from employers, they are usually taxable. This includes more than cash bonuses. Did your boss give you an awesome new set of golf clubs or a weekend in his beach condo? That may be taxable too.

Check out our professional research and score the best business credit cards for your business.

Bartering

This one was a total shock to me. One of my favorite small business budget hacks is to barter within my network for goods and services. It is not uncommon for small business owners to trade off for any number of things. Graphics, social media management, content writing, cleaning services, printing services, and more. The cash value of those trades can actually be taxable. Who ?

Do You Owe Tax on Business Credit Card Rewards? Maybe, Maybe Not

It all depends on how you got those rewards and what you do with them. Most credit card rewards are actually a discount, because they are directly related to some level of spending. These are not taxable, but they can still increase your taxable income by decreasing your business expense deduction if you choose to use them to reduce your business expenses. But if you choose to use those rewards to reduce personal expenses, they have no tax impact at all.

Bonuses for opening an account are different. They are taxable as income, even if they do not reach the $600 threshold to trigger a form 1099. This changes if you get the option to donate these funds to charity and choose to do so. Not only are they then not taxable, but they also count as a tax deduction.

The best option to avoid tax on business credit card rewards is to choose the card with the rewards that will best benefit you personally. Then you can redeem rewards for personal use. For bonuses, just donate them to charity if given the option. It looks good for your business, and it will only help you come tax time.

Always be careful to weigh the tax benefit of not using rewards for business expense against the actual benefit of the cost reduction however. You may find reduced expenses to be worth the cost come tax time.

The post Do You Owe Tax on Business Credit Card Rewards? The Answer Might Surprise You appeared first on Credit Suite.