PLLC business credit card application

[tweekin19]

I am a recent grad who will be starting work next month. I am 1099 so recently filed for a PLLC and opened a separate business bank account.

I was trying to apply for a business credit card to make large purchases (malpractice premiums, disability insurance, etc). I already got rejected by Chase Ink and another Capital one business card most likely due to my business being new. I used my new EIN instead of SS when applying.

I know it is best to have a separate credit card to make work related purchases and keep it separate from personal expenses. But what am I supposed to do if my business is so new I can't even qualify for a business credit card right away? Is it ok to make those purchases with my personal credit card and reimburse myself from my business bank account?

I wanted to get some of this stuff set up before hiring a CPA but now looking back maybe I should've gotten a CPA before?

Sorry if this has been asked before. Couldn't find a thread in SDN. If there is a helpful thread that has been previously posted about stuff needed to be done as a 1099 feel free to link it my way.

---

Members don't see this ad.

 

[chocomorsel]

I am a recent grad who will be starting work next month. I am 1099 so recently filed for a PLLC and opened a separate business bank account.

I was trying to apply for a business credit card to make large purchases (malpractice premiums, disability insurance, etc). I already got rejected by Chase Ink and another Capital one business card most likely due to my business being new. I used my new EIN instead of SS when applying.

I know it is best to have a separate credit card to make work related purchases and keep it separate from personal expenses. But what am I supposed to do if my business is so new I can't even qualify for a business credit card right away? Is it ok to make those purchases with my personal credit card and reimburse myself from my business bank account?

I wanted to get some of this stuff set up before hiring a CPA but now looking back maybe I should've gotten a CPA before?

Sorry if this has been asked before. Couldn't find a thread in SDN. If there is a helpful thread that has been previously posted about stuff needed to be done as a 1099 feel free to link it my way.

Your bank should have offered you one when you opened the business account.
If they didn’t, find another other bank.
Oh yeah, that’s the problem as @BLADEMDA said. Use your SSN instead of EIN.
I have never had a problem.

 

[linkin06]

Cc companies are really tight with credit due to corona, so that may be a factor too. For example, Capital one slashed a lot of people’s credit lines recently.

Capital One cuts credit limits as millions struggle with income cliff

Credit-card issuers are increasingly reducing credit limits because they're worried about the solvency of American consumers.

www.google.com

 

[BLADEMDA]

A Small business with just 1 owner or 1 owner with spouse is essentially a personal business. This means you can use your social security number to open up your business credit card account. My business credit card is backed by my personal accounts which means I must pay for the charges even if my business went bankrupt. So, my point here is that if you personally qualify for a credit card then open up an account using your professional name like Joe Smith, M.D. and use that card for business purposes. You can do business under both Joe Smith M.D. and the company name like "Midnight Dreams" without any problems.

But, your personal credit card Joe Smith is a separate account and card from Joe Smith, M.D.

Some Physicians use the following:

Joe Smith, M.D. LLC or you can be "Midnight Dreams" LLC with Joe Smith, M.D. as the owner/CEO.

 

[tweekin19]

Thank you for everyone's responses! I probably should have asked before applying for that 2nd card after the 1st rejection.

Since I already applied for two credit cards recently and got rejected by both, should I wait a couple months before reapplying? Does it matter?
By then I will have a couple paychecks deposited into my business account.

Still go with SS# over EIN# regardless right? I had pretty great personal credit which probably took a little hit from all those credit check pulls.

 

[BLADEMDA]

Thank you for everyone's responses! I probably should have asked before applying for that 2nd card after the 1st rejection.

Since I already applied for two credit cards recently and got rejected by both, should I wait a couple months before reapplying? Does it matter?
By then I will have a couple paychecks deposited into my business account.

Still go with SS# over EIN# regardless right? I had pretty great personal credit which probably took a little hit from all those credit check pulls.

EIN vs SSN doesn't matter much for as single owner or single/spouse company. The IRS treats it all the same. Unless you have an "S corp" then the EIN will matter. Of course, you can start out as an LLC then convert to an S corp in 1-2 years if you choose to do so.

I did not use my EIN to get a corporate card because I am an LLC not an S corp. I really think most banks would love your business as I had many offers with perks to open an account. Banks prefer you are PERSONALLY responsible for any charges made on that account if possible as a new, small business owner.

 

[BLADEMDA]

Bottom line
If you’re a self-employed freelancer or small-business owner, the right business credit card can help you build your business credit if you use it responsibly. But if your business doesn’t have an income yet or you don’t have business credit, be prepared to prove your creditworthiness based on your personal credit history and income.

Once you’ve received your card, use it responsibly to further grow your business and your business credit.

How to get a business credit card

As a small-business owner, you may be wondering how to get a business credit card. Here’s how to apply for one.

www.creditkarma.com

 

[BLADEMDA]

The Ink Business Cash℠ Credit Card offers 5% cash back on the first $25,000 spent in combined purchases each account anniversary year on internet, cable and phone services as well as office supply stores (then 1%).

You’ll also earn 2% cash back on the first $25,000 spent in combined purchases each account anniversary year at gas stations and restaurants (then 1%). And you’ll earn 1% back on all other purchases.

The cash back categories on this card make it one of the best credit cards for business owners who spend a lot on these everyday enterprise expenses.

You’ll earn a one-time $500 cash back credit after you spend $3,000 on purchases in the first 3 months after account opening. The card also offers a 0% purchase APR for 12 months from account opening, after which the variable APR is 14.74% - 20.74%. That $500 can be a helpful boost for any small purchases you need to make.

 

[BLADEMDA]

One last comment to the OP is that there is NO LEGAL requirement you get a business credit card as a single owner LLC. But, you need to keep very good records of everything you buy/charge for the business vs personal use. This means saving receipts and making sure all business charges are accounted for on that credit card.

Then, after 6 months or a year you should have enough income/credit to finally get that business card if you so desire.

 

[BLADEMDA]

How to Get a Credit Card for a New Business

Learn what you need to get a credit card for your new business, including credit score and application requirements, as well as tips for choosing the right card.

www.nerdwallet.com

I recommend the OP take 5 minutes and read this link