Author Topic: Help me understand Business Credit Cards and keeping expenses separate  (Read 4327 times)

Miss Growing Green

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So, I love taking advantage of credit card sign-up bonuses to rack up free points. (i.e sign up and receive 50,000 points when you spend $2k in 2 months).  So far, these have all been personal credit cards I've signed up for.

Recently I attempted to apply for a business credit card (Chase Rapid Rewards Business Premier) and was denied! (I was told my business was "too new" (7 yrs) and my revenue "too low" (~25k in 2014)) (by the way, my personal score is >750 with no dings)

Most of the credit card churning blogs out there claim that you "don't even need a legitimate business to have a business credit card. Just get on there with your social security number and apply!"  Now, I'm not sure how true that is, but I do have what I consider a legitimate business- I currently manage three rental properties.

I don't have an EIN, and I don't even have separate checking/savings for the rentals, but I do manage them and do my own taxes.

So, my questions are as follows:
1) How hard is it to get a business credit card?  I thought that managing three rentals and asking for a $5k credit line was a modest request.
2) How can I improve my chances in the future? 
3) Should I open "business" checking and savings for my rentals... would that help my ability to get a business card?  Are there any other benefits to opening these accounts that I'm overlooking?

I'm not even sure I'm asking the right questions here... please drench me in your knowledge!

Hotstreak

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Re: Help me understand Business Credit Cards and keeping expenses separate
« Reply #1 on: February 13, 2015, 07:28:58 PM »
It sounds like your income is too low - make sure you are putting your best foot forward.  If the application allows you to add back non-cash expenses, etc., make sure you do that!  Some folks may be artificially inflating their income (lying) on applications to get approved (which I do not recommend!  But works, apparently).

iamlindoro

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Re: Help me understand Business Credit Cards and keeping expenses separate
« Reply #2 on: February 13, 2015, 07:32:41 PM »
Recently I attempted to apply for a business credit card (Chase Rapid Rewards Business Premier) and was denied! (I was told my business was "too new" (7 yrs) and my revenue "too low" (~25k in 2014)) (by the way, my personal score is >750 with no dings)

Did you call the recon line?  If not, definitely do it as it's probable you can talk them in to giving you the card with at least a minimal credit line ($5000 is needed for Premier cards).  If you called recon and got denied, you can also try calling the number to get a different operator, often with different results.

I had to call recon to get the same card, it took two tries.  I have a newer business with more income, and about the same credit score.

Spondulix

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Re: Help me understand Business Credit Cards and keeping expenses separate
« Reply #3 on: February 14, 2015, 01:02:27 AM »
I have a Costco Amex Business Card and it was no trouble at all to get. I think when we applied, the business revenue was about the same as yours (but they never asked to verify)

Miss Growing Green

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Re: Help me understand Business Credit Cards and keeping expenses separate
« Reply #4 on: February 14, 2015, 06:08:49 AM »
To answer questions-

Yes I did call back (twice).  The second time I asked to escalate to a manager for reconsideration, and still no luck.  When I asked (nicely) how 7 years could be too new for a business, he said it's not about how long I personally have been doing it, but how long my business history shows on credit reports (not personal reports like Experian and Fico, but other "business credit score places" of which the names escape me now).  Is it true that you have to have a separate entity, with separate bank accounts to "prove" that you're a business, or can anyone that owns/runs a business, even without keeping their expenses separate and having and LLC get a business card? 

If my income is too low, one more question- I have another "business" where I run an online store on Ebay.  Can I combine the two incomes and report them as one "business" for the purposes of obtaining a credit card, even though they are unrelated?

In the reconsideration I explained how I had been a loyal customer for 10 years with a personal credit card with a high limit.  I offered to move some of my personal credit line over to the business card and still no luck.  The guy insisted that I needed business checking and savings accounts with regular activity to qualify.  It's kind of a Catch-22 because I don't want to pay for things for the business with a checking account; I was to use a credit card (personal card I guess) so I can get the rewards.

lise

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Re: Help me understand Business Credit Cards and keeping expenses separate
« Reply #5 on: February 14, 2015, 08:44:22 AM »
I find it more organized to keep my business and personal banking separate.

I bank at Chase for business (and Ally for personal).
Chase recently introduced a new small business checking account where there are no fees for a balance of $1,500.  There is also a transaction limit but doesn't look like you would reach it.  It may not be available where you live but investigate with other banks as well in what they can offer in terms of low cost business banking.

I know it's a pain to have $1,500 tied up doing nothing but this will help in getting you a credit card; and again; it's more organized.  The first time I applied for a Chase Ink card, my application was eventually approved after talking to a representative. 
____
Chase
Total Business
Checking®
Designed for growing businesses to manage cash flow on the go.

Monthly Service Fee $10 when you are enrolled in Paperless Statements (or $12 for paper statements); waived when you maintain a $1,500 minimum daily balance
200 transactions per month without a fee
$7,500 in cash deposits each month without a fee
$50,000 in cash deposits and withdrawals per month (cannot exceed $50,000 for 4 months in a rolling 12 month period or the account may be converted)
Permits incoming and outgoing domestic wires
International outgoing wires not permitted (incoming allowed)
Provides 24/7/365 access to chase.com and telephone banking
Please see Important Information below and talk to a banker for more information about the fees and features of this account.

iamlindoro

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Re: Help me understand Business Credit Cards and keeping expenses separate
« Reply #6 on: February 14, 2015, 08:52:39 AM »
Yes I did call back (twice).  The second time I asked to escalate to a manager for reconsideration, and still no luck.  When I asked (nicely) how 7 years could be too new for a business, he said it's not about how long I personally have been doing it, but how long my business history shows on credit reports (not personal reports like Experian and Fico, but other "business credit score places" of which the names escape me now).  Is it true that you have to have a separate entity, with separate bank accounts to "prove" that you're a business, or can anyone that owns/runs a business, even without keeping their expenses separate and having and LLC get a business card? 

If my income is too low, one more question- I have another "business" where I run an online store on Ebay.  Can I combine the two incomes and report them as one "business" for the purposes of obtaining a credit card, even though they are unrelated?

Definitely odd.  I'm wondering if you just managed to get two hardasses in a row.  My business income is the same as my personal income since my business is a sole proprietorship.  It's all on the up and up and I can prove business income with my Schedule C if I had to, but Chase hasn't made me do so.  They also haven't ever batted an eye that my business income and my personal income are the exact same dollar amounts.  I don't maintain separate banking for the business income.

As to combining the incomes, I don't see that it would hurt to try!  Heck, if you can put up with the annoyance/discomfort, it may even be worth it to try a few more times on recon.

Miss Growing Green

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Re: Help me understand Business Credit Cards and keeping expenses separate
« Reply #7 on: February 14, 2015, 09:00:14 AM »
Would it be worth calling back, or should I just wait a month or so and re-apply?

Maybe I made a mistake in calling in the first place... I applied online and I didn't get instantly approved- it said my application needed to be reviewed and would take 7-10 days.  I called to "expedite" the process and they asked me lots of questions about my profits and losses for each year (questions that were not on the simple online application).  Should I not have called in and just waited the 7-10 days?

iamlindoro

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Re: Help me understand Business Credit Cards and keeping expenses separate
« Reply #8 on: February 14, 2015, 09:05:29 AM »
Would it be worth calling back, or should I just wait a month or so and re-apply?

Maybe I made a mistake in calling in the first place... I applied online and I didn't get instantly approved- it said my application needed to be reviewed and would take 7-10 days.  I called to "expedite" the process and they asked me lots of questions about my profits and losses for each year (questions that were not on the simple online application).  Should I not have called in and just waited the 7-10 days?

I have seen answers the differ on both of these questions.  For me, I would hate to take the hit of another hard inquiry so I'd at least want to be satisfied that under no circumstances would anyone approve my first application on reconsideration.

On the second question, some people call recon immediately on getting the "needs review" (I do) and others don't.  I am sure that each group would claim their way is the best.  I guess if you feel like you're a good talker and can talk them into approving you, immediately calling recon might be better, whereas if you're likely to shoot yourself in the foot, maybe it's better to wait and only call recon if needed.

Separate question-- if you care going for the Companion Pass, have you applied for both the Premier and Plus versions of the Personal card?  That's a way to get 100K points without having to go through the business rigamarole.

Miss Growing Green

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Re: Help me understand Business Credit Cards and keeping expenses separate
« Reply #9 on: February 14, 2015, 09:12:50 AM »
iamlindoro,

Thanks for all the helpful information!  I consider myself to be pretty adept at navigating customer service and getting my way, but I have never applied for a business card before so maybe I (inadvertently) shot myself in the foot.

I am going for the Companion Pass, and applied for the personal "Plus" card on the same day (and got approved).  I thought that it might be possible to get the Plus and Premier together, but I was unclear if I could get them at the same time, and I was worried that I would get denied for the premier after applying for the P. Plus and Business Premier in the same day!  Maybe the easiest thing to do is just wait a week or so and apply for the Personal Premier...

Aside from the companion pass though, I wanted to make sure I had the option to get a business card in the future (in case other amazing business sign-ups appear)... and if it involved NEEDING to open up separate business checking and savings accounts I was going to start that process sooner rather than later because the guy on the phone claimed I needed to have them running with "substantial activity over a long period" in order to qualify for a business card.  It sounds like that is not true though, at least for you!