Access Financing, Small Business Credit Cards

There are two very different types of business credit cards:

• The first are business credit cards that can be used just like cash. These are your Visa, MC, Amex, and Discover cards.
• The second are business credit cards that can only be used at specific businesses. These are your fuel and store cards such as Fuelman, Best Buy, Home Depot, Staples, etc.
• The next thing to understand about business credit cards is that with the exception of the major banks and providers such as Wells Fargo, Chase, Capital One, BofA, Amex, Discover, etc. the thousands of other credit cards are primarily underwritten and approved by Citi, Commenity, Synchrony, Wex and Elan. Each of these five underwriters have hundreds of cards they are private labelling, so you think it is a Home Depot card, but it is actually a CitBank card with Home Depot’s name on it.

From a business standpoint what this means is that you do not want to apply for four or five cards on the same day that are all underwritten by the same underwriter. You think you are applying with Home Depot and Best Buy and Staples, when actually you are applying with CitiBank for their three underwritten cards all on the same day. Get declined for one and you get declined for all three.

Get approved for one and most likely you get approved for all three. In any case you will get three credit inquiries for all three. You are better off applying for only one Citi, Commenity, Synchrony, Wex or Elan card, seeing if you get approved for that one and then applying for two or three more as you are almost guaranteed approval. But don’t apply for five or more from one underwriter or you will most likely get declined for them all.

The issuers of Visa, MC, and Amex cash type cards typically do not check business credit scores.

They approve "business" credit cards solely based on the personal credit and personal income of the business owners. The cash type business credit cards are basically a personal credit card with your business name on it. This is why they do not report on your business credit.

These cash type business credit cards also typically do not report on your personal credit unless you default and then they do. The reason they do not report on your business credit is they are not legally tied to your business so that in the event of a default they can come directly after you personally and are able to bypass having to take any legal actions against your business before they can come after you personally.

Cash type business credit cards are still excellent sources of working capital with no restrictions on how you use them or what you pay for with them. They can be used for rent, utilities, payroll, service providers, inventory or almost anything you would normally have to use cash for.

The store or fleet business credit cards will report on your business credit and many of those can be approved on business credit alone, the only downside to those cards is they cannot be used the same as cash. Keep in mind that business credit reports to the day. This means if you pay these cards one or five days late, they report your as paying one or five days later which will damage your business credit. On the other hand, they also report if you pay early so you get a business credit boost by paying these reporting cards early.