Personal Credit Card vs Ltd Company CC

IrishGypsy

Hey all,

Been trying to do a bit of research on this and I was hoping some of you could help educate me in the world of using personal credit cards for business use versus getting a credit card (for a Ltd company) for business use.

From what I understand checking online, Ltd company's have their own credit profile (although I'm not sure what companies keep this record like Call Credit/Equifax and Experian do for personal credit files), so would it stand to reason that using a Ltd company credit card for business purchases would be a better idea than a personal CC as it keeps the liability seperate and protects the personal credit file if the Ltd company was dissolved? What data do card providers check when providing credit to Ltd companies? (Apart from the personal credit file of the director(s)?

Also, anyone know of anyone good business credit card providers?... :whistle:

InsideInsurance

Generally business credit cards are much more limited than personal ones and the "benefits" they offer are more pitched at corporations than limited companies with only an employee or two. They also normally have annual fees both for the account and for each card issued.

Presumably you are one of the directors of the said company? I personally would get a decent personal cashback card or other rewards card purely for business use. When you do your expenses you obviously do them in full for what you bought, ensure you use the expenses money to pay off the credit card and then you pocket the rewards yourself.

If your company is on the ropes then it does become more difficult as you wont want to get debts you know your company may struggle to repay but at the same time by not buying stock or whatever then it may increase the certainty of the company failing.

Lenders review the company, its credit record, its Company House filings, sometimes the directors, letters from accountants/ auditors, business plans, cashflow projections etc.

Unless you have history of credit or years of trading with strong profits then you may struggle to get lending because ultimately you could easily get large debts and simply wind up the company to avoid repayment. Your best bet is going to be with the company you bank with.

IrishGypsy

InsideInsurance wrote: »

Generally business credit cards are much more limited than personal ones and the "benefits" they offer are more pitched at corporations than limited companies with only an employee or two. They also normally have annual fees both for the account and for each card issued.

Presumably you are one of the directors of the said company? I personally would get a decent personal cashback card or other rewards card purely for business use. When you do your expenses you obviously do them in full for what you bought, ensure you use the expenses money to pay off the credit card and then you pocket the rewards yourself.

If your company is on the ropes then it does become more difficult as you wont want to get debts you know your company may struggle to repay but at the same time by not buying stock or whatever then it may increase the certainty of the company failing.

Lenders review the company, its credit record, its Company House filings, sometimes the directors, letters from accountants/ auditors, business plans, cashflow projections etc.

Unless you have history of credit or years of trading with strong profits then you may struggle to get lending because ultimately you could easily get large debts and simply wind up the company to avoid repayment. Your best bet is going to be with the company you bank with.

Cheers for the reply, much appreciated. I had a feeling that'd be the case. I'm the sole director of the company and I'll never havve any stock issues (as I sell purely digital goods online), so I reckon going for an M&S 15 months 0% purchase card would be a good option as I'm looking to ramp things up in the business come the summer where I'll likely be transitioning from my current FT role elsewhere (so it'd ease the first few months cashflow and cost me nothing whilst waiting for the income to ramp up).

paulwf

IrishGypsy wrote: »

Also, anyone know of anyone good business credit card providers?... :whistle:

I have an HSBC bank account and wanted an extra line of credit so clicked on the credit card button and they immediately sent me one with a £3K credit limit

From a book keeping point of view it keeps things simple to have it as part of your suite of accounts (current account, loan account, savings account and credit card account all in one place). Probably not the most moneysaving way and there is an annual fee but it does keep things simple. I think you can also add extra cards with different limits if ever you need a way for staff to charge out expenses, I haven't got any additional cards though.

paddyrg

A company credit card for a small 'close' company will almost certainly carry a fee and have to have a personal guarantee from you anyway - ie you're worse off than using a personal card and saving airmiles ;-)