05-13-2013 09:58 PM - edited 05-13-2013 10:06 PM
Im a small business owner, Im in the construction and development business, I started the company back in 2010, got incorperated in 2011 and have been enjoying building my company. I have had prior high end paying jobs but decided i wanted to be my own boss and quit working for dad. So I branched out on my own. Long story short is I have quite a bit of prior credit but my CR has flucuated over the past year or so as I continue to build the company.
Anyway I currently have 4 amex cards (I have about 11 cards total business and personal) 2 are personal 2 are buisness. Personal ones are a green card and Hilton honors supass, business are a platinum and lowes. The charge cards when I applied for them both gave me the option to carry a balance, I said yes in case I had a tight month, but have rarly ever carried a balance on them.
Ok so fast forward to about a month ago, Get a letter from amex they are putting a limit on my business platinum card to 17,900, and removing my ability to carry a balance. I had carried over about 5k that month which they said they would still allow me to carry but I paid it off anyway just for good measure. The reason being my CR had dipped to 615 and my amex utilization was to high, I checked on FICO and they said 686 so I was annoyed at the fact they were so off on my CR and annoyed that for someone who has has their cards since 09 and has never had a late payment and never carried for more than 3 months on any of my credit cards is being limited, especally when some months I have been able to charge more than 50k and paid if off less than 30 days later. But I let it go as I knew I wouldnt get anywere.
so fast foward to last weekend, IM out shopping for office furnature and go to buy. I had a slow march so I had maxed out the lowes card for about 2 months and this month has really picked up business wise (as it has for the past 2 fiscal years, just the way it is here) so I went ahead and payed off the lowes and my hilton card on thursday the 9th (which was also maxed out) They were only maxed out for about 45 days or so but carried for one statement, Anyway I checked saturday afternoon and found lowes said 10k avalilable as it should (the limit). Went out to go shop and go to use it and it gets declined, tried again same result (tried to charge about 1900) end up using my BB&T business card. and as soon as im home, right on the phone to amex. They said they cut me to a 1k limit, stating the same reason that my overall utilization with amex is to high and my CR that was pulled on april 17th is 598, IM pissed that they waited until I paid the cards off to do this as they had used a report from before the card was payed down. I explained that I had just paid everything off and that my FICO was showing a CR of 689 and she said the only thing I can do is submit my last three business bank statements which show very healthy revenue but I also paid off alot of stuff and thats showed in the statements so im not sure that would help. She said I can also submit any form of liquid assets, but im not comfortible submitting anything personal net worth for business cards ( i have edward jones investments and money market) . This seems like a nasty trick on Amex part, im worried about my two personal cards now if they are being this strict with me (which btw are also both at 0 and the green had been at 0 for months now). But had I known they were going to cut me I wouldnt have given them a penny over the minimum, CR be damned. When I was speaking with amex on the phone the lady was forign and I could hear her sighing at some of my questions like she had way better things to do than be helpful. As of right now the lowes card is useless, but I dont want to cancel as I dont want to hurt my business (which has a duns and bradstreet provided paydex score of 80) Not 10 min after getting off the phone I get the email warning me of the action taken on my account. Why would they cut my limit after I paid them, especally with in 48 hours of doing it, just seems like they went "ok we have his money, cut him so he cant do it again" And this seems really un fair to me. Especally when its a credit card not a charge card.
Amex used to be my go to card and im in kind of a rock and a hard place, The platinum is my largest limit business wise. I have a bb&t business card with a 15k limit and a Citi thankyou business with a 7k limit. I dont want to start using personal cards again to float the company. I have quite large purchases that need to be made to keep my business flowing and amex is really putting a road block on that. I have some lumber orders totalling over 30k some weeks. That until last month were going on the platinum card, then When I got paid an installment by the customers, would pay the card right off.
Sorry for the long post. Im just kinda pride hurt here. Im also kind of annoyed when im someone who makes sure everything is paid off every month. When you have someone like my father who has had heavy CC debt for years and is treated like a king by amex and others.
EDIT- MODS sorry I didnt notice the business credit forum below. Please feel free to move it. Thanks!
05-13-2013 10:08 PM - edited 05-13-2013 10:08 PM
I think I see the major problem you have going for you. When times were you good, you didn't need but one card, and the other just sat around, when times got a little tight, you carried a balance on both your business cards.
That's the problem there. You should continually be working on EXPANDING your business credit lines to the point where you could float 2-3 months without it hurting your utilization. You relied SOLELY on Amex too for too long. Chase has excellent business products. Citi too I'm sure. I'm not saying drop Amex completely, but I am suggesting that once your scores "officially" recover, get 2 more business cards. 6-9 months later, get another two. I'm no expert on business cash flow analysis nor do I have any idea what your revenues look like, but I would recommend you have at a minimum 100% of your expected annual revenue in credt limits.
Just my two cents. Perhaps more "google" research might lend to better recommendations. The only thing I bet everyone will tell you is that you have too few credit lines/cards for your business given how cyclical it sounds. Additionally, you're leaving money on the table by not having a whole range of rewards cards for your business/personal spending.
05-13-2013 10:21 PM
05-13-2013 10:31 PM - edited 05-13-2013 10:32 PM
I'm generally a rewards junkie and really wish i had a business with a revenue stream to take advantage of rewards with.
In your case, focus on getting lines of credit for your business first, then over time adjust your credit line products to suit your needs and your desired rewards.
Start with a a business line of credit from a local credit union. I'm a big credit union cheerleader. Then go to a Chase branch and see what they can do for you. you could consider moving your business and personal checking accounts to them as an incentive for them to offer you a high initial credit line. chase is all about the upsell with their products when you go into branches, so use that to your advantage.
Citi also has good business products.
I'm not familiar with other medium sized regional banks, but do shop around. you do have a viable, profitable business that simply needs better cash flow and credit line management.
05-13-2013 11:22 PM - edited 05-13-2013 11:44 PM
To add a bit do this. My Current CR rating is with a lot of my cards at almost 90%. This month was a very profitable so I have paid down every single card I have to 0, the only outstanding balance on my CL is my car loan(0% for 36 months, my house is paid for). So IM hoping when the balances report to 0 the score will rise very nicely. I do have a 150k line of credit with BB&T But that is only used for making large inventory purchases (usually land) I use the Credit cards to keep on file at suppliers, I can't do that with a line of credit. I don't want to switch banks as I have a 10 year history with BB&T (started with a student account when I was 16) and my parents and grand parents also bank with them. So I will see about having them up the limit on my card with them as well. The relationship is very nice as when I bring in checks no matter what size the funds are available instantly, this is a trust I don't want to have to build at another bank. Plus the closest chase is 200 miles away. Edward Jones has also given be a line of credit against my assets but its a personal line tied to my money market, not a business line and IM very careful to keep personal and business separate. Its also at 7.5%. My bb&t one is at 3.75% (prime plus .50) and business name only, no personal guarantee.
Chase has always turned me down, even when I have had a better CR ( I have been as high as 750) and was turned down for both a freedom and southwest (yet my 75 year old grand mother who makes 1/5 as much as me on a fixed income and only has one other credit card gets approved for a southwest chase with a 19k limit, go figure) however the last time I applied to them the company was new. So now with some tax returns and income under its belt I may give them another shot. But Im thinking of giving bank of America a go as soon as my balances report to 0.
Thanks for the help guys, never in a million years did I think not having enough credit cards was a problem.
edit- Would it be a good idea to get a couple store cards? IE a home depot card and a true lowes card that can only be used at these stores? We do shop there from time to time for main stream stuff.
05-14-2013 02:42 AM
It seems like it would be prudent to have a relationship with 2 or 3 banks given you are running a business.
Adittionally, chase is very good with recons and manual reviews. Did you ever call in your previous apps for a freedom or southwest card?
Chase is just one of many lenders. While the nearest branch may be 200 miles away, once you have your accounts, you won't likely ever need to visit them again. Also, as I mentioned, Chase is just one suggestion. There's got to be other lenders in your area.
Also, I'm not recommended giving up your BB&T relationship. Just diversifying. You don't seem to understand that the reason you're in this crunch is because you are relying on just Amex and BB&T. Obviously their current limits don't suit your needs. You're also currently at their mercy should they get cranky about your cash flows which they have gotten.
05-14-2013 04:54 AM
sorry to hear abou this.
since you have paid down all your expenses, you can try to have amex do a manual review again I suppose. it will be at least 1 additional HP, but it beats having your account limit so low. It's best that you submit whatever documents they want as well.
Do check out Chase INK as well.
There's also many other banks, such as Citi, Chase, Wells Fargo, etc, that will be more than happy to have you as a customer.
Amex limited you because they got nervous with you carrying such high balances on so many cards. I understand it is easy to max out cards for business expenses, but it's probably a bad idea to do this to lenders who are really sensitive to the slightest bit of things.
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