[B]usiness credit cards are a great option for people who own a small business. It allows them to use credit to pay for purchases or expenses when they have limited or delayed cash flow. It also makes it easier to keep personal and business expenses separate.
You should know that if your personal credit history was used to approve your business credit card, your personal credit history is where it will report. Not all creditors report business accounts to personal credit accounts. For instance, American Express and Bank of America don’t at the present time. Capital One does and so does Discover. You should read the fine print of any credit card application and policy notices to know the details of any changes.
Protecting Your Credit Score
If you’re worried about your business credit affecting your personal credit history, you’ll want to manage all accounts carefully. Any creditor is going to look at business accounts on your personal credit history the same way as a personal account unless you can provide an explanation of the activity.
Work to keep your credit rating in good shape if you know you’ll be taking on extra debt with a business account. Make sure you can make all minimum payments on time, which would be the biggest negative impact. If you find you’re not getting enough income in to cover your business expenses and the payment is coming out of your personal funds, you may want to reanalyze your business plan.
Watch your business finances closely to monitor for issues or concerns that may arise. Don’t wait until you can no longer pay your bills or when you have more debt than you can handle to look at other options. Even a business that has been doing well can begin to have problems. It’s a case of constant monitoring to make sure your business remains solvent and doesn’t damage your personal credit.
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