topic Re: applying for a business card without having or owning a business in Credit Cards

applying for a business card without having or owning a business

Anonymous — Tue, 13 Jul 2010 17:19:59 GMT

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?

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

Tazman81 — Tue, 13 Jul 2010 17:55:36 GMT

@Anonymous 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?

Well, I am going to start out not by judging, but by saying this is a disappointing situation. It is actually considered fraud to apply for credit under false pretence. This is much like applying for credit under someone else's name, so I was assume the reprecussions would be the same. With that said, I am not clear on how you were able to apply for a business credit card without having a EIN (TaxID) for the business. This is much like a social security number to a person. Anyhow, with this said, likely this card is solely in your name and you are solely responsible for it because if this company does not exist then it does not have a credit rating. If the company doesn't have a credit rating, then most lenders will require the owner/majority shareholder of the company to secure and be responsible for the debt. My advice would be to pay off the card, open a card in just your name and close that card. IMHO not only would you be looking at fraud, but there could also be tax implications. May want to seek the advice of a lawyer to see the best way of handling this.

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

Anonymous — Tue, 13 Jul 2010 18:26:39 GMT

sounds scary from the picture you’re painting, I will say that this was several years ago, so maybe the application process was much easier then, as I didn’t have to enter any tax id info or anything

no ill intentions, I was working contract labor at the time, and considered opening a business, just got the card to keep finances straight (work related with the business card, and personal with a different card), then later decided to drop the contract labor gig and take a real job

just never got around to canceling the business card, and have been using it ever since, didn’t think it’d be considered fraudulent

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

Tazman81 — Tue, 13 Jul 2010 19:03:01 GMT

@Anonymous wrote:
sounds scary from the picture you’re painting, I will say that this was several years ago, so maybe the application process was much easier then, as I didn’t have to enter any tax id info or anything

no ill intentions, I was working contract labor at the time, and considered opening a business, just got the card to keep finances straight (work related with the business card, and personal with a different card), then later decided to drop the contract labor gig and take a real job

just never got around to canceling the business card, and have been using it ever since, didn’t think it’d be considered fraudulent

And i want to be clear that I am not judging you and I don't mean for it to sound bad toward you. I am just calling it for what it is and trying not to sugar coat anything so that you may be able to get this taken care of in the best way possible. Hopefully someone that has a bit more experience regarding this will be able to provide some additional insight. I doubt there were ill intentions regarding this, but you want to make sure things are being fixed so that they don't come to haunt you in the future. It is possible that you can contact the credit card company and ask them for a copy of the application you submitted. Just tell them that you misplaced it and you need a copy for your records. Also, what address are they mailing your bills to? Are the bills coming in the company's name or just in your personal name? Either way it goes, I am sure you had to personally secure the debt if you didn't have to enter a company's TaxID. Good luck, and let us know how it goes. I don't mind offering any advice I can, but please understand it is just my advice and what I may do in the situation. You may even be able to tell the lender that you are disolving the company and ask if they can convert the card to a personal credit card instead of a company card. It's just that since you had "Inc." after the name, they may ask for proof that the Article of Incorporation was disolved. Which you would not be able to provide that because there was no Article of Incorporation. Any one else have any thoughts or suggestions to help out in this situation?

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

Anonymous — Tue, 13 Jul 2010 21:30:06 GMT

@Anonymous wrote:
sounds scary from the picture you’re painting, I will say that this was several years ago, so maybe the application process was much easier then, as I didn’t have to enter any tax id info or anything

no ill intentions, I was working contract labor at the time, and considered opening a business, just got the card to keep finances straight (work related with the business card, and personal with a different card), then later decided to drop the contract labor gig and take a real job

just never got around to canceling the business card, and have been using it ever since, didn’t think it’d be considered fraudulent

Since you were self employeed and you used the card for business expenses, I think this is a legit use of business card.

Not an expert opinion.

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

ngerasimatos — Tue, 13 Jul 2010 22:32:05 GMT

Almost all business cards now required your business tax ID

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

Anonymous — Wed, 14 Jul 2010 02:03:44 GMT

@Tazman81 wrote:
@Anonymous 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?
Well, I am going to start out not by judging, but by saying this is a disappointing situation. It is actually considered fraud to apply for credit under false pretence. This is much like applying for credit under someone else's name, so I was assume the reprecussions would be the same. With that said, I am not clear on how you were able to apply for a business credit card without having a EIN (TaxID) for the business. This is much like a social security number to a person. Anyhow, with this said, likely this card is solely in your name and you are solely responsible for it because if this company does not exist then it does not have a credit rating. If the company doesn't have a credit rating, then most lenders will require the owner/majority shareholder of the company to secure and be responsible for the debt. My advice would be to pay off the card, open a card in just your name and close that card. IMHO not only would you be looking at fraud, but there could also be tax implications. May want to seek the advice of a lawyer to see the best way of handling this.

This is totally false given the information OP has provided.

First of all, there must be intent to defraud. Additionally, false information must be provided that materially effects the credit grantor's lending decision. As with many so-called business cards, the card is decisioned based upon the applicant's personal credit history without the need for an EIN or DUNS and such is precisely the case with the credit card OP obtained.

The application for the Southwest Airlines business credit card issued by Chase does not in any way, shape or form ask for an EIN or even, for that matter, an address or telephone number of the business; it is strictly a personal liability credit card as is the business card from, for example, Nationwide Bank.

Brasilesportes, no, the sky is not falling. There is no harm, no foul. You should have no problems with Chase over the issue and definitely will have no legal problems.

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

Anonymous — Wed, 14 Jul 2010 11:33:56 GMT

@ngerasimatos wrote:
Almost all business cards now required your business tax ID

Not true.

Other than Ink, business cards offered by Chase do not usually require an EIN. The business card offered by Nationwide Bank does not. Neither do several offered by Citibank.

The vast majority of business cards are nothing other than strictly personal liability cards that allow you to stick on the name of your enterprise and with the added benefit of being able to apply for almost as many supplemental cards as you wish without fee.

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

Anonymous — Wed, 14 Jul 2010 04:46:36 GMT

I didn’t think you were judging me in anyway Tazman81 I appreciate non-sugar coated information

I’m certainly not an expert here (hence the reason I posed the question); but my instinct is telling me that O6 is spot on here

O6 what do you suggest I do now?

cancel it?
leave it open and stop using it?
or just keep on using it as I’ve been doing for the past several years, and do nothing

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

Anonymous — Wed, 14 Jul 2010 06:31:20 GMT

@Anonymous wrote:
I didn’t think you were judging me in anyway Tazman81 I appreciate non-sugar coated information

I’m certainly not an expert here (hence the reason I posed the question); but my instinct is telling me that O6 is spot on here

O6 what do you suggest I do now?
cancel it?
leave it open and stop using it?
or just keep on using it as I’ve been doing for the past several years, and do nothing

#3.

Enjoy the card and use it as you usually do.

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

Anonymous — Wed, 14 Jul 2010 11:07:28 GMT

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

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.

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

waqaszm1 — Wed, 14 Jul 2010 11:17:06 GMT

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 !

@Anonymous 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?

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

Anonymous — Wed, 14 Jul 2010 11:30:51 GMT

@Anonymous 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.

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.

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

Anonymous — Wed, 14 Jul 2010 11:32:37 GMT

@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 !
@Anonymous 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!

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

Anonymous — Wed, 14 Jul 2010 12:22:49 GMT

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...

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

Anonymous — Wed, 14 Jul 2010 12:39:10 GMT

@Anonymous 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.

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

Anonymous — Wed, 14 Jul 2010 12:54:32 GMT

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?

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

Tazman81 — Wed, 14 Jul 2010 16:35:10 GMT

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.

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

ngerasimatos — Wed, 14 Jul 2010 17:15:11 GMT

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.

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

Anonymous — Wed, 14 Jul 2010 23:36:47 GMT

@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.