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Valued Member
gingerdad
Posts: 28
Registered: ‎10-19-2012
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Understanding the PG - Credit Cards and Other Types of Debt

[ Edited ]

Ok, want to confirm a couple of things as I establish credit for a couple of businesses. 

 

First is my legal/consulting practice - I have been a solo attorney since September.  Applied for an received an Amex Gold at that time; applied and was denied a working capital LOC by US Bank (my credit score has subsequently gone up 80 points and equifax FICO is 770+). 

 

2nd is a completely unrelated business; legal entity formed in January, with just a little bit of activity thus far.  No credit card/financing for it yet.

 

So wanted to confirm:

 

1.   "Hard" Inquiries.  Banks these days will require PGs for business ccs and most loans.  So in most cases, any application for business financing is going to result in a hard personal inquiry.  We can talk about the fairness of that until the cows come home, but it is not going to change that reality.

 

2.  Utilization/Payment History For Card in Bus's name with PG.  If the card is in the businesses' name, the extension of credit and actual utilization will not hit my personal credit file.  I am looking at my Transunion credit report and it shows the initial inquiry from Amex but not the actual CC (or its corresponding utilization and payment history).

 

3. CC in Individual Name and Business's.  I have a couple of credit cards with high limits (30k and 20k) in my individual name; been thinking about exploring with those banks adding the business to the cards.  Don't know if that will fly but want to explore.  If I am able to do that would assume the utilization and payment history would hit my personal credit file.

 

Does that look right?

 

Less important today (other than I am not carrying high balances on the bus. card at the moment, paying on time, so would like to get credit for those if I should be getting credit), but in the near future the 2nd start-up will likely be heavily leveraged, potentially with some credit card debt and just want to project the impacts on my credit.

 

 

 


Starting Score: Equifax FICO 694
Current Score: June 15, 2014: Equifax FICO 825; June 2013 TransUnion 872, Experian 768
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scenery_guy
Posts: 958
Registered: ‎07-24-2012
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Re: Understanding the PG - Credit Cards and Other Types of Debt

1. Yes, personal HP unavoidable for almost all business credit cards. Yes, PG as well. I am sure there are some cards out there that don't require it but the big boys all do and that's not going to change. 

 

2. Yes, again with the big boys (amex, Chase, Citi and BofA) after the initial HP you will never see mention of it on your personal reports unless default happens. That's a huge win as you can PIF after the statement posts even if the card is nearly maxed out and it does not effect your personal score. 

 

3. Yes, do try to work other successful personal banking and credit relationships to see the chances of them extending you a line for business. The positive history will be a help - and it might be huge. If you are unsure about the impact of a newly granted business credit line leveraged from a personal relationship ask before you apply - they will disclose how it reports. You really want to keep your personal reports clear and looking good even if your business cards are heavily utilized as the path to more business credit begin with a personal HP first then a peek at your business records. 

Valued Member
gingerdad
Posts: 28
Registered: ‎10-19-2012
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Re: Understanding the PG - Credit Cards and Other Types of Debt

[ Edited ]

Very helpful!  What does HP and PIF mean?


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llecs
Posts: 32,881
Registered: ‎08-04-2007
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Re: Understanding the PG - Credit Cards and Other Types of Debt


gingerdad wrote:

Very helpful!  What does HP and PIF mean?


Common Abbreviations

 

PIF = pay in full

Valued Member
gingerdad
Posts: 28
Registered: ‎10-19-2012
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Re: Understanding the PG - Credit Cards and Other Types of Debt

Thank you!  Slightly confused then by the point there - if the business card does not hit my personal utilization, how does it show up as a PIF?


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llecs
Posts: 32,881
Registered: ‎08-04-2007
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Re: Understanding the PG - Credit Cards and Other Types of Debt

I think the prev. poster was commenting to PIF to avoid a ding due to any negative impact to util on your personal credit had it reported. Some biz cards do and some do not. I'm not up to date on which ones do and don't. If anything the practice helps your biz credit.

Valued Member
gingerdad
Posts: 28
Registered: ‎10-19-2012
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Re: Understanding the PG - Credit Cards and Other Types of Debt

Got it that is helpful.

 

For one of the startups anticipate a substantial amount of long-term debt; realize ccs is not an ideal solution for that, but need to plan for the possibility that a short-term solution might morph into medium-term solution for that start-up, which may require carrying a balance on a business cc for a substantial period of time . . . While pif is all I ever do on the personal side, on the business side that may not be practical. 


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Creditaddict
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Re: Understanding the PG - Credit Cards and Other Types of Debt

What banks do you currently hold personal cards with $20 and $30k limits?

You could look at an Amex Business Credit Card also... The Platinum Business Cash I believe it is offers up to 12 or 15 months 0% and they probably already like you depending what you put on your charge card... but if really looking to carry balance I would look more towards the Barclay, Bank of America, Chase route.

Fico Scores: EQ- 682 DCU, TU 696 Walmart, EX 686 Prosper(10-30-14)
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Highest Limit: Navy Federal Cash Sigi Visa $50k (AU)
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Valued Member
gingerdad
Posts: 28
Registered: ‎10-19-2012
0

Re: Understanding the PG - Credit Cards and Other Types of Debt

 

What banks do you currently hold personal cards with $20 and $30k limits?

You could look at an Amex Business Credit Card also... The Platinum Business Cash I believe it is offers up to 12 or 15 months 0% and they probably already like you depending what you put on your charge card... but if really looking to carry balance I would look more towards the Barclay, Bank of America, Chase route.

 

I have the following individual cards:

 

  • Bank of America Power Rewards VISA with a $30k max (originally a Schwab Card that got moved around first to FIA and now B of A).  I am not actually sure I could get this card today (the rate is only 5.19%)
  • a credit union VISA (First Tech) at $20k.  Rate is 6% for another couple of weeks and then moves to 6.99%.  I am actually thinking about taking a cash draw to pay down some other debt (rental 2nd mortgage) that is at a slightly higher rate as their are no fees for cash advances and has the same 6.00% rate (for 2 more weeks).
  • Toyota Visa $11k (not sure on rate). 
  • 2 Individual Amexs (each at 15.24%)
    • COSTCO (12.5k limit)
    • One ($1,200 limit)

On the business side only have Amex Gold (can't easily see limit or rate, but think it is high for both).

 

Will check out those cards you mention - personally and for firm do not want to carry balances; but new startup will definitely need medium and long-term debt.

 


Starting Score: Equifax FICO 694
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Epic Contributor
Creditaddict
Posts: 21,016
Registered: ‎10-23-2007
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Re: Understanding the PG - Credit Cards and Other Types of Debt

You should be great for Bank of America then!  They have some pretty good Business Cards with 12 months interest free also.

Fico Scores: EQ- 682 DCU, TU 696 Walmart, EX 686 Prosper(10-30-14)
You will have to put up Electric Fence to keep me in the garden!
Highest Limit: Navy Federal Cash Sigi Visa $50k (AU)
Lowest Limit: Target $200
63 Cards and Counting :smileytongue:

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