Best Credit Card for LLC?

[Jarrod Roecker]

I have one rental property and a rather newly formed LLC for the biz. I have some remodel work to do and thought I would open a credit card under the LLC to build some business credit. I have excellent personal credit and can back it with my own if needed. Any suggestions on a really good credit card?

[Dan Mahoney]

@Jarrod Roecker

It sounds like the original question has been answered but I would like to add two things:

1) Unless you are a very large business that qualifies for commercial credit, you will be applying for a small business credit card which is backed by your personal guarantee.  While it is true that if your business' credit is bad, you may be denied for a small business credit card, you are generally applying based on the strength of your personal credit.  Banks will readily approve small business credit cards for brand new businesses (even if there is no business credit history) provided the credit history of the owner is solid.  Don't worry about getting a DUNS number, this will happen in the ordinary course of your business and will not affect your ability to get a small business credit card.

2) Capital One does offer a decent suite of small business credit cards, but there is one important business practice that makes them different from every other bank I've worked with. When you have a small business card with Capital One, they report the information on your PERSONAL credit report. That's right, even if your LLC is the borrower, Capital One will report the balances and payment history on your personal credit. This has created problems for me in the past when I was applying for personal credit and my business debt showed up on my personal credit. It made it look like I owed a bunch of money in my name when it was really owed by the businesss and paid from the revenue of the business. For this reason alone, I have avoided Capital One small business cards since I paid off my balance with them in 2015. I can tell you from experience that Amex, Chase, BofA and others do NOT report small business credit cards on your personal credit report (though a hard inquiry will show up when you apply).