business credit cards is one early step towards building your business
credit. This is not the same as using your personal credit to obtain a
credit card with your business name on it. Obtaining a business credit
card relies on your business credit information, not on your personal
When you are beginning your business, you will probably need to use your
personal credit. After you have fulfilled certain basics, your business
should rely on itself for credit.
These basics include incorporating your business as a legal business
entity. This does not include DBAs (individuals Doing Business As company
x). Consult a local business attorney about incorporations are available
in your state.
Another basic for building business credit is establishing a business
phone that matches your business address in the national 411 directory.
Even business cell phone service can be set up for this. Residential
addresses are okay, too. Just make sure you are listed as a business in
411 and that your information is correct. Always give lenders this same
The last basic step involves building credit with your
vendors. If you are in the service industry, you can develop
accounts with your office supply, Internet, and phone service
providers. Otherwise, get a credit account with your
Now you are ready to apply for a business credit card. Use
all business information on the business credit card
application. Use business sales numbers, list other business
assets and liabilities. List business creditors (your
vendors) and use business references. Simply put, make your
business stand on its own when obtaining business credit
Once you have a business credit card or two, use them for
expenses only. Carry some balance on them month-to-month, but plan on
paying almost all of it off monthly. Do not use your business credit card
to purchase items for which you could otherwise obtain business financing.
Your long-term goal should be to establish solid overall credit for your
Establishing solid credit for your business is relatively easy to do if
you start by following the three steps above. Then get business credit
cards to further build your businessís credit. With good business credit
as your foundation, you are now ready to get a business line of credit
that does not depend on your personal credit.
While a business credit card is a great tool for using credit for business
purposes, as with any tool, use your business credit card wisely and it
will serve your business well.