Using Business Credit Cards Effectively

Obtaining 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 credit information.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. Having a “Home Office” address are okay, too. Just make sure you are listed as a business in 411 and that your information is correct at the state and county levels. Always give lenders this same information.

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 suppliers that you may already be using.

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. Use the Debt To Income Ratios that are in the 10 Steps To Money System to ensure accurate figures that the bank will approve.

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 business 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 business.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 business’s 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.

As the Nations Leading Expert in Business Funding, Pat Gage has created a system for raising unlimited money for any business. The system is called “10 Steps To Money®” and has assisted many of his students and himself in raising hundreds of thousands of dollars for their businesses. Pat is not only a sought after business funding expert but also a national speaker and frequent radio show guest. For more information on any topic discussed, visit Pat Gage’s site at http://www.10stepstomoney.com/