Reply
Valued Contributor
Uborrow-Upay
Posts: 2,708
Registered: ‎10-16-2008
0

Re: applying for a business card without having or owning a business


O6 wrote:  #3.   Enjoy the card and use it as you usually do. 

+1

 

I agree in this instance, even though I am totally against the opening of a business credit card account by someone who does not have a business or legitimate business purpose, regardless of personal liability for that account. 

 

Too many people got away with opening business accounts for the sole purpose of hiding tradelines/balances from reporting to personal credit, only to default later on.   Some business accounts are now being reported to the business owners' personal credit (Capital One biz accounts, for example).  The end result has been that legitimate business owners now face lowered personal credit scores and possible adverse actions from other lenders merely by using their business accounts for their intended purpose.  The reporting has impacted the ability to regulate cash flow for the business without suffering consequences to personal credit.

 

With that said, the OP has not defrauded or attempted to defraud the credit card company.   And as O6 said, keep using the card like you usually do.  You're OK with this one.  :smileyhappy:

 

 

Contributor
waqaszm1
Posts: 80
Registered: ‎02-27-2008
0

Re: applying for a business card without having or owning a business

hey brasilesportes. you should not have any issues. having worked for jp morgan chase in the past, i can assure you that you are okay. this would not be considered fraud at all; as others have pointed out, for fraud there has to be intent present which you clearly do not.

 

further, in your situation given the information you have provided, you would have been structured as a sole owner. in that case, your income  would show on your personal income tax filing, and under IRS rules, under this structure you can use your name as the name of the business. further, as a sole proprietorship, you would mostly like have to enter your ssn on most credit apps, since the liability for your business falls on you anyway.

 

so, this is not fraud by any means ... and as O6 said, carry on ... peace !


brasilesportes wrote:

anyone know of the repercussions (if any) for applying for a business credit card and just using it as a personal card?

 

I don’t own a business, but several years ago I applied for a Chase Southwest Airlines credit card, I just entered the name of my business as” firstname”   “last name”  Inc.

 

it was accepted, and I’ve been using it ever since as a personal card, but it just dawned on me the other day that this might come back and bite me one day

 

any ideas?


 

Senior Contributor
O6
Posts: 3,626
Registered: ‎10-13-2009
0

Re: applying for a business card without having or owning a business


Uborrow-Upay wrote:

O6 wrote:  #3.   Enjoy the card and use it as you usually do. 

+1

 

I agree in this instance, even though I am totally against the opening of a business credit card account by someone who does not have a business or legitimate business purpose, regardless of personal liability for that account. 

 

Too many people got away with opening business accounts for the sole purpose of hiding tradelines/balances from reporting to personal credit, only to default later on.   Some business accounts are now being reported to the business owners' personal credit (Capital One biz accounts, for example).  The end result has been that legitimate business owners now face lowered personal credit scores and possible adverse actions from other lenders merely by using their business accounts for their intended purpose.  The reporting has impacted the ability to regulate cash flow for the business without suffering consequences to personal credit.

 

With that said, the OP has not defrauded or attempted to defraud the credit card company.   And as O6 said, keep using the card like you usually do.  You're OK with this one.  :smileyhappy:

 

 


Although I am certainly not aware of all the intricacies of business card reporting, I have heard that some business cards do not report on the account owner's personal CR.  I always found that quite interesting and, in fact, confusing.  Why would, say, Nationwide Bank issue an additional, say, $50k of credit on their business card and then "hiding" this fact from other potential creditors?  It seems to be defeating the whole idea of credit reporting.

 

I would think that a credit product granted on the basis of a companies establish credit should not report on a business owner's personal credit report and a business card of the type granted based exclusively on the basis of the business owner's credit history should.  But, hey, I know ... WTF have credit card issuing banks ever done anything logical or intelligent, right? 

 

This whole thread has got me thinking ... I might pull the trigger on a business card application.  My business name will be: Uncle Sam's Misguided Children PC.  I wonder how long before the bank or some store clerk catches on. 

IAALBNYL
Senior Contributor
O6
Posts: 3,626
Registered: ‎10-13-2009
0

Re: applying for a business card without having or owning a business


waqaszm1 wrote:

hey brasilesportes. you should not have any issues. having worked for jp morgan chase in the past, i can assure you that you are okay. this would not be considered fraud at all; as others have pointed out, for fraud there has to be intent present which you clearly do not.

 

further, in your situation given the information you have provided, you would have been structured as a sole owner. in that case, your income  would show on your personal income tax filing, and under IRS rules, under this structure you can use your name as the name of the business. further, as a sole proprietorship, you would mostly like have to enter your ssn on most credit apps, since the liability for your business falls on you anyway.

 

so, this is not fraud by any means ... and as O6 said, carry on ... peace !


brasilesportes wrote:

anyone know of the repercussions (if any) for applying for a business credit card and just using it as a personal card?

 

I don’t own a business, but several years ago I applied for a Chase Southwest Airlines credit card, I just entered the name of my business as” firstname”   “last name”  Inc.

 

it was accepted, and I’ve been using it ever since as a personal card, but it just dawned on me the other day that this might come back and bite me one day

 

any ideas?


 


Very valid points!

IAALBNYL
Valued Contributor
Uborrow-Upay
Posts: 2,708
Registered: ‎10-16-2008
0

Re: applying for a business card without having or owning a business

 


O6 wrote:  Although I am certainly not aware of all the intricacies of business card reporting, I have heard that some business cards do not report on the account owner's personal CR.  I always found that quite interesting and, in fact, confusing.  Why would, say, Nationwide Bank issue an additional, say, $50k of credit on their business card and then "hiding" this fact from other potential creditors?  It seems to be defeating the whole idea of credit reporting.

 

O6, that hypothetical $50k credit line is justified as a float for the receivables, for that time period between the providing of a billable product/service and the actual payment of the invoice by the customer. 

 

Contractors rely on this every day.  They'll use that $50k line to purchase materials for a customer's home renovation.  The customer ultimately pays this bill as the materials portion of the total invoice.  But if the credit line is now reporting on the contractor's personal credit,  that contractor's personal credit score drops considerably when that balance reports.  It appears he owes substantial amounts when, in fact, he does not.  The business does.  The customer owes it to the business, and the business pays the card company when that customer pays his invoice, reimbursing the materials costs.

 

If our contractor is a successful, busy contractor, it appears he has a massive debt load personally, with balances which never seem to go down.  His scores go lower the busier he gets due to the reporting of this business tradeline on his personal reports.  He might just become so successful that he'll never be able to borrow another dime to operate his business.

 

That same contractor would be golden on the business side if that was the sole reporting of this same account. 

 

 

Re:  Uncle Sam's Misguided Children, PC...As much as I'd love to chuckle at that idea, I think we've all already got that account...we just don't have the card. 

Somebody else has it, and we just get to pay for it, with interest...to the tune of about $1 Billion a day.   (That's a real number, folks!)

 

That USMC, P.C. card should be reported as stolen...

 

 

 

 

 

 

 

 

Senior Contributor
O6
Posts: 3,626
Registered: ‎10-13-2009
0

Re: applying for a business card without having or owning a business


Uborrow-Upay wrote:

 


O6 wrote:  Although I am certainly not aware of all the intricacies of business card reporting, I have heard that some business cards do not report on the account owner's personal CR.  I always found that quite interesting and, in fact, confusing.  Why would, say, Nationwide Bank issue an additional, say, $50k of credit on their business card and then "hiding" this fact from other potential creditors?  It seems to be defeating the whole idea of credit reporting.

 

O6, that hypothetical $50k credit line is justified as a float for the receivables, for that time period between the providing of a billable product/service and the actual payment of the invoice by the customer. 

 

Contractors rely on this every day.  They'll use that $50k line to purchase materials for a customer's home renovation.  The customer ultimately pays this bill as the materials portion of the total invoice.  But if the credit line is now reporting on the contractor's personal credit,  that contractor's personal credit score drops considerably when that balance reports.  It appears he owes substantial amounts when, in fact, he does not.  The business does.  The customer owes it to the business, and the business pays the card company when that customer pays his invoice, reimbursing the materials costs.

 

If our contractor is a successful, busy contractor, it appears he has a massive debt load personally, with balances which never seem to go down.  His scores go lower the busier he gets due to the reporting of this business tradeline on his personal reports.  He might just become so successful that he'll never be able to borrow another dime to operate his business.

 

That same contractor would be golden on the business side if that was the sole reporting of this same account. 

 

 

Re:  Uncle Sam's Misguided Children, PC...As much as I'd love to chuckle at that idea, I think we've all already got that account...we just don't have the card. 

Somebody else has it, and we just get to pay for it, with interest...to the tune of about $1 Billion a day.   (That's a real number, folks!)

 

That USMC, P.C. card should be reported as stolen...

 


With contractor as an example, now I understand the dilemma that can arise with business cards.  I guess in that case, the contractor would be better off if they used Chase's Ink card or another similar card that is decisioned based strictly on the strength of the enterprise's credit. 

 

Cards like Nationwide's and Chase's SW Airlines business cards that rely exclusively on the applicant's credit record are what seem strange if they do not report on the applicant's credit report.  As we have seen with Chase's SW Airlines business card, you can write in the business name of Snow White & The Seven Dwarfs and as long as your credit is good they'll issue the card.     

IAALBNYL
Valued Contributor
Uborrow-Upay
Posts: 2,708
Registered: ‎10-16-2008
0

Re: applying for a business card without having or owning a business

That brings up a question, and I don't have the SWA Biz card.

 

For anyone who has a legitimate business which is not a sole proprietorship...does this card report to personal credit?

Established Contributor
Tazman81
Posts: 719
Registered: ‎06-23-2010
0

Re: applying for a business card without having or owning a business

I am glad there was some additional input included here.  From my state, if you are sole prop. business then you cannot include any form of the word corporation and/or incorporated into your name.  That is reserved for those that are actually incorporated, thus the reason I was shocked the business app did not request the EIN for the business.  It is true that with a sole prop. it is the owners personal credit that goes into account.  It is also the owners personal finances that go into account as well.

 

From my understanding if there is an EIN and a person is NOT personally securing the debt, then that is when it will only report to the company's EIN.  Otherwise if a person is personally securing the debt, then it reports on their personal credit as well since they are securing the debt of the company.

 

I in no way meant to scare the original poster and am glad to see that there was additional information provided.  I just went by what I know to be true in our area regarding the naming conventions of businesses.


Starting Score: Eq: 662 Tu: 532 (03/02/2011) CH7BK 01/12/2009 Discharge
Current Score: Eq: 692 (04/03/2013) Tu: 717 (04/03/2013)
Goal Score: Eq: 720 Tu: 740

Wallet: Chartway Visa 10k | AMEX Costco TE (AU) 25k | Cap One MC 750 | Cap One Visa 750
Valued Contributor
ngerasimatos
Posts: 1,278
Registered: ‎06-01-2007
0

Re: applying for a business card without having or owning a business

I do contracting work, and formed an S-Corp and when applying for my business credit lines through Chase they always requested articles of incorporation, and my business tax id. Im assuming the laws in CA are a bit more restrictive though as compared to some other states.  

Try not to become a man of success but rather to become a man of value
Albert Einstein 1879 - 1955

700 Club
Senior Contributor
O6
Posts: 3,626
Registered: ‎10-13-2009
0

Re: applying for a business card without having or owning a business


ngerasimatos wrote:

I do contracting work, and formed an S-Corp and when applying for my business credit lines through Chase they always requested articles of incorporation, and my business tax id. Im assuming the laws in CA are a bit more restrictive though as compared to some other states.  


Regarding credit cards, Chase has at least two types of business cards.  They have the "Ink" which does specifically require EIN and other business-specific data.  Then they have cards like the SW Airlines business card which asks simply for the business name and then only data relating to the individual filling out the application.  Again, I don't know why they do it like that, but they do.  A lot of banks have business cards along the lines of Chase's SW Airlines card.

IAALBNYL

myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+
}