Obtaining Credit card for LLC

17 Replies

Good afternoon BP family, Home Depot offers a 24 month 0% financing card, but it is only available to “consumers”. I have a project within my real estate business/llc that will cost around $20K that this card would be perfect for. Has anyone opened a credit card in their name and used it strictly for the LLc? Or is this a strict no/no? Any guidance would help

In order to open a credit card in your LLC name, you have to have a DUNS number, which is a credit profile number for the business. Otherwise, it will be a personal credit card with your company's name on it, and will report to your personal credit, and involve a personal credit pull. Learned the hard way!

There is some benefit to using a personal credit card ONLY for the business...you can segregate expenses. However, I wouldn't put a $20K project on a credit card. Get a loan instead.

There is no problem having a 20k project on a card; just do not accumulate a balance none of us investors should have any CC debt! A CC for your LLC only along with a bank account and check book means half of your accounting is done!

Im confused as to why other are saying this is a problem. Free borrowed money is free borrowed money. Just know that:

- it might make accounting more difficult, but might just be a new line item, that's not what you asked though

- you will have this debt under a personal credit pull, which may or may not be an issue for you, DTI, etc will be impacted, etc

- of course credit card debt is not great to have but if you have a plan to pay it off before paying any interest on it, it might work out much better for you than a loan.

Maybe there are other issues that I'm not aware of, but as long as you keep your books straight, you can borrow from Peter to pay Paul.

@Niyi A. I have opened a consumer credit card before and used it for business. You are allowed to deduct the interest on the credit card if it's only used for business. Trust me but verify with a CPA in your state. You can only deduct the portion of interest that is used for business. Example if there is no balance on the credit card and the total balance is used for business the interest is deductible.

You actually don't NEED a duns number to get a credit card for your llc. You can get up to 2 credit cards (every 60 days max of 4 total) and as many charge cards as you desire for your llc from American Express. All you NEED is an ein number. The benefit of these Amex business cards is that they don't report to your personal credit report unless you default. This means the utilization category on your personal credit will not be impacted. Nor, will any lenders be able to see said accounts without looking up your business's (llc) credit. Hope this helps

As others have stated, I have multi credit cards tied to my EIN which is attached to my LLC. They are great because they don't affect your personal credit utilization and hence don't affect your personal credit score. You should be able to find a business credit card other than Home Depot's that offers similar introductory 0% APR periods.

Home Depot offers 24 months and12 months zero % interest.  I just charged $45,000 to do hurricane windows and doors on a rental in bonita springs fl and they game me 24 months zero interest

JJ

just a note ,spark business by capital one has $1000 bonus (on top of other points) on 10k spent in 90 days, chase ink 80k point or $800 if apply thru branch bus banker can give you 20k bonus points making it $1000 again bonus.

no DUNS needed just EIN

It's totally fine, you can use your personal credit to help leverage your business. I would only use that new account for business and have your bookkeeper or quickbooks track the card for your business expenses. 

I have applied business credit card via Chase through my LLC, they said it is actually tied to the personal SSN. Although they ask for the LLC's TIN#. Is this what everyone experience? The credit card I got was the Ink Cash .

There is a lot of information swirling back and forth on this thread, figured I'd offer my 2 cents since I have a pretty solid understanding and study of credit cards at this point:

1. You do not need ANY official business information to get a business credit card. Simply your social security number and 'a business' will get you a 'business card' from Chase for instance. I know because we just got another business card for my wife last week, who simply used her social. She does not have any LLC or official business, simply has a 'side hustle.'

2. A business credit card will be a credit hit on your credit report as a hard inquiry, but will not be reported on your personal credit score moving forward.

3. You CAN use a personal card for business expenses, but not vice versa.  But, this is a rule per the guidelines of the credit card provider. That doesn't mean they will hold you to it.  Just pay your credit card bill, they don't check.  What do they know if your Walgreens purchase is for milk (for the office) or for printer ink.  That is YOUR business, they don't really care.

4. For bookkeeping, it is simply EASIER if you use each card exclusively for business OR personal, don't mix.   You are 'allowed' to spend business money on your personal card, and get reimbursed by your business.  There is no legal hit for doing so.   You can apply for a personal Chase card, and use it exclusively for business dealings (that would help your personal credit score for instance if you're trying to build personal credit).   Although, this isn't some kind of RULE. Imagine a boss who's out and about on business, forgets his business card at the hotel, and buys a laptop on his personal card, then pays it off with his business account? That is certainly a defensible action, not out of the ordinary.  Just annoying for his bookkeeper!

5. As far as piercing any corporate veil, LLC's are formed for legal liability and protection, credit cards are simply to pay for things. LLC's are your choice, not a requirement to run a business. I would say that the more important element here is where you PAY your credit card out of. If you get a business card, and pay it every month out of your personal account, then try to say later that it was a business card for another business, that would probably not end well for you. But if you pay your personal card always out of your business account, and then later say 'that card was for my business' that would be no problem! "The card has better trip insurance, offers more points for what my business buys" are all great responses. But if you comingle your funds and expenditures, it will get messy.

So get a card for your business, ANY card, I would just say try to keep that card either business, or personal, but try not to mix.  

Hope that helps, would love to hear any thoughts others have.

Originally posted by @Nick S. :

just a note ,spark business by capital one has $1000 bonus (on top of other points) on 10k spent in 90 days, chase ink 80k point or $800 if apply thru branch bus banker can give you 20k bonus points making it $1000 again bonus.

no DUNS needed just EIN

 Yes true, I have had issues with capital one business card. They may ask for your EIN number when applying for the business credit card but at the end of the day it reports to your personal credit profile.