Business Credit Cards and Personal Liability

Can I get approved for a business credit card and not be held personally responsible for business debts accumulated using the card?

The majority of small business credit cards will hold the business owner personally liable for debts accrued by making purchases with the credit card. When applying for a business credit card, the potential cardholder (i.e. business owner) must include his/her Social Security Number, as well as the Tax ID, or Employer Identification Number (EIN), number for the business, with the application.

The potential cardholder’s credit report will most likely be checked much like with an application for a personal credit card. However, it is important to note that many business credit card accounts do not show up on personal credit reports once activated and in use.

Thus, although the business owner will usually be personally liable for debts accumulated with the card, the card’s history will not usually affect his or her personal credit score, whether positively or negatively.

No two business credit cards are exactly the same. Each card has different policies, and terms and conditions will vary from bank to bank. With that in mind, be sure to fully understand the business credit card that you are applying for before submitting your application.

For answers to any questions that arise along the way, be sure to visit our knowledge center.

Posted in Credit Cards, Personal Finance, Small Business

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This entry was posted on Thursday, January 15th, 2009 at 7:06 am and is filed under Insurance, Personal Finance. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.