Obtaining a business credit card along with no personal guarantee will be almost impossible.
Of almost all the credit cards all of us reviewed, only one, the Bremer Bank Visa Signature Business Company Card, doesn’t require a personal guarantee. That said, the card is designed for medium and large businesses only, which excludes many small-business owners.
While you’ll be hard-pressed to find a business credit card with no personal guarantee, it’s possible to find an issuer that says it won’t report to the consumer credit bureaus as long as your account meets certain requirements. Read on to learn more about how personal guarantees work.
What is a personal guarantee?
A personal guarantee effectively means that you are personally responsible for paying your credit card bill if your business can’t.
A personal guarantee is one way the card issuer can protect itself if your business ends up unable to pay.
Since many small-business credit cards don’t require a security deposit, a personal guarantee is one way the card issuer can protect itself if your business ends up unable to pay.
If your business defaults on the loan you signed the personal guarantee for, this could show up upon your personal credit history simply like any other overdue account.
Different ways a company credit card can impact your own personal credit
Even in case you never default upon your payments, your company bank card could affect your own credit history in some other ways.
To begin with, the company credit card issuer might pull your personal credit score reports whenever you apply with regard to the card. Depending upon your credit score, a hard query could knock a couple of points off your individual credit scores.
Also, a few business credit card companies could report your continuing account activity towards the customer credit bureaus. This ensures that if you rack upward a high balance upon your business credit cards, it might increase your general credit utilization and harm your personal credit.
Each credit card issuer possesses its own policy for how so when it reports your business account activity to the consumer credit bureaus, but there are some out there that say they typically don’t — as long as you pay on time.
Learn more: Business credit cards and your personal credit
Business credit cards to consider
These business cards may still report to the major consumer credit bureaus — particularly if you’re delinquent on your account — but when we reached out to credit card issuers Chase (on Sept. 14, 2018) and American Express (on Oct. 23, 2018), their customer service reps told us that regular card activity like monthly payments and balances aren’t typically reported to the consumer credit bureaus.
American Express says they’ll report to your personal credit if your account isn’t in good standing, and Chase says they’ll report if the account is more than 60 days delinquent.
But you should know that an issuer’s policies could change at any time. Before you apply for a enterprise credit card, we advise calling the card company might how it may affect your individual credit.
Finest for Card
Great for travel rewards Ink Business Preferred℠ Credit Credit card
Best for a toned rewards rate The Blue Business℠ Plus Credit Card coming from American Convey
Best regarding cash back Ink Business Cash℠ Credit Card
Ink Enterprise Preferred℠ Credit Card
Typically the Ink Business Preferred℠ Credit rating Card
offers 80, 1000 bonus points after an individual spend $5, 000 about purchases in the very first 3 months from your current account opening. Points usually are worth 25% more any time you redeem for traveling through Chase Ultimate Advantages. That means the creating an account bonus would be well worth $1, 000 in the direction of traveling. The card includes a $95 total annual fee.
Read the full review of typically the Ink Business Preferred℠ Credit rating Card.
The Blue Business℠ Plus Charge card from Us Express
The The Azure Business℠ Plus Credit Credit card from American Convey
gives two points per $1 spent on your very first $50, 000 in purchases each year, then one point per $1 after that. It has no annual fee.
Read our full review of the The Blue Business℠ Plus Credit Card from American Express
Ink Business Cash℠ Credit Card
The Ink Business Cash℠ Credit Card
offers a $500 cash back bonus after you spend $3, 000 on purchases in the first 3 months your account is open. That’s significant, considering the card has a $0 annual fee.
Read our full review of the Ink Business Cash℠ Credit Card.
The idea of signing a personal guarantee can be daunting, especially if you don’t know when your business is proceeding to survive. But it may be hard to escape when talking about business credit cards.
If an individual elect to get yourself a business credit rating card to fund your organization anyway, check with typically the card issuer before an individual apply so you know what, if any, information becomes reported on your private credit files.
Getting a credit card that doesn’t report just about all of your business bank account activity to the significant consumer credit bureaus is usually suitable for your personal credit. But if your favored card does, pay your bill on time and in full each month to lower your risk of running into any negative consequences.
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