Personal Liability and Your Business Credit Card

For a new business who has not yet established business credit, the owner’s credit history becomes the basis for credit approval. If you are going to apply for a business loan or a business credit card, you can be sure that your personal credit report will be checked.

Consequently, the business owner is solely responsible in paying for all future charges incurred in the account. If you are going to distribute employee cards, take note that you will be liable to pay for all charges that they incur even if they were made without your consent.

Your Obligations as a Business Credit Card Holder

Using a credit card for business is a great tool in building up your business credit. However, building business credit takes time and you may need at least two years before you can completely separate your business credit from your personal credit history. This is why new entrepreneurs are encouraged to register with a business credit tracker immediately as soon as the business starts operating.

How you manage your business credit can affect your personal credit rating. If you often exceed your credit limit or are often late in submitting your payments, your personal credit score can suffer. Yes, both your personal credit history and business credit history can be damaged. As a business credit cardholder, you need to be very conscious about how you use your card and how you keep up with your payments.

[Article: Managing Your Credit Card for Business Effectively]

Understanding Your Business Credit Card’s Terms

Certain privileges that you enjoy from your personal credit card may not be applicable to your business credit card. For example, consumers have the right to dispute unauthorized charges in their credit card accounts. Meanwhile, business credit cardholders do not enjoy the same privilege. If there are unauthorized charges in your account, your credit card issuer may still press you to pay for them regardless of who made those transactions.

The “personal liability” clause is part of all small business credit cards. The specific conditions may vary depending on the issuer so you need to be very clear about the stipulations in your Agreement. Before signing up for your chosen small business credit cards, see to it that you do understand your obligations and rights as a cardholder.

[Article: 5 Fundamentals of Credit Cards for Business]

Elizabeth Roberts

Elizabeth Roberts

Liz Roberts and her team are continuously providing information to people who are ready to repair their credit and improve their credit score. Also NewHorizon.org team strives to empower the homebased and small business owners by bringing information that can help them to manage and grow their businesses. Let our 24+ years of business finance experience help you to get the financing you need! CONTACT US if need financing for your business.

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NewHorizon.org is an independent, advertising supported website. The owner of the site may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website. NewHorizon.org has not reviewed all available credit card offers in the marketplace.

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NHBS Inc © 2022

NewHorizon.org is an independent, advertising supported website. The owner of the site may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website. NewHorizon.org has not reviewed all available credit card offers in the marketplace.

Privacy Policy Terms of Use

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