Personal or Business 0 APR Card?

By: Micah

If you’re aiming to get a series of 0 APR credit cards with American Business Funders help, it’s worthwhile knowing the differences between the two types, and advantages and disadvantages of using each one between them.

There are two types of credit cards – PERSONAL credit cards and BUSINESS credit cards.

1. Reporting to Personal Credit

All credit cards need a personal guarantor of some sort.  That’s the person they go after and bug if something goes wrong.

With a personal credit card, the line of credit will show up on that personal guarantor’s credit report.  Maxing out the credit lines, or missing a payment, will report to the 3 bureaus (at least of them) and your FICO on that bureau will drop.  Paying off the cards and having excellent payment history will raise your FICO.

Most business credit cards will not report or affect personal credit at all (except the inquiries), as long as the trade lines are in good standing.  The banks will not report payment history or balances to the personal guarantor’s credit reports, as long as the accounts are in good standing.  Business credit cards will build business credit.

Your FICO is not a certificate on the wall – it’s a tool to use.  Use it responsibly, but use it!

2. Existing Business

For business credit cards, the business applying should either be a startup, or a business without bad payment histories with creditors, since many banks may in fact run business credit.

3. Terms for 0 APR

Business credit cards have 0 APR from 6-12 months.  However, after good payment history and other metrics the banks look for, they will offer 18-month 0 APR deals and increase credit lines.

Personal credit cards 0 APR offers are anywhere from 12-24 months (with much higher limits).

However, those looking for “as much as possible,” like my client who needed $75,000 using her fiance’s 740 FICO, to replace 3 daily cash advances payments, the only way to guarantee getting her that amount was to get him personal credit cards.

4. Limits

Business cards will initially always come with lower limits, which may increase over time, and they’re meant to be used to about 90% usage initially.  Personal cards will come with higher limits, but maxing them out immediately can come to the possibility that a bank may cancel their card for future purchases (although they’ll still have the 0 APR offer).

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