Forming an LLC or other type of corp. to get additional cards
 

Has anyone formed an LLC or other type of corporation specifically just to be able to apply for additional credit cards? I assume the biggest hurdle would be to establish credit worthiness for a new corp. without having to give your ssn. Still it must be possible right? I am thinking this would allow you to get multiple bus. cards without having to wait the obligatory 12-24 months between apps. What do you guys think?

Even for LLC and Corps they need your/everyone ssn. Only credit reporting may be different for different credit cards.

If you are going this route, you need to add additional time and expenses for IRS reporting and EDD (CA employment dev dept) etc. Not worth it in my opinion.

Establishing credit worthiness for a company takes a long time.

Is it not possible to get a card that only has the business name on it? I have a commercial Home Depot card that only has my business name, and can be used by anyone who has it in their possession. The reason I ask this, is that if the corp was credit worthy, then could it get such a card without having to provide an ssn?

LLCs go under the names of cardholders for business chase & amex cards, and in that case, they took the LLC's EIN but appear to have based their decision on my personal SSN/file.

one thing i haven't read about is the use of D&B ratings for small business creditworthiness with credit cards. P-cards are a whole other ballgame...

What is a p card? Also the wsj had an interesting article about a d&b spinoff company that would raise your rating if you paid them money, and although they wouldn't admit to this, drop your rating if you didn't. The article read as if the practice was all but extortion.

You don't have to open a corporation or LLC. A simple and very cheap Sole Proprietorship would suffice for the EIN number. I presume, however, the banks would be a bit reluctant to extend credit to a company that has been formed last week with zero income let alone zero business credit rating, which is another issue.

You have to give an ssn with a sole prop.

I have a Corp and when I apply for business cards I apply using my SSN. I never have a problem and I have many cards. What's wrong with using your SSN? Are you really wanting to do a lot of extra IRS paperwork? I have never attempted to try and establish credit under my company name only because I will never need to borrow under it.

I was thinking buy avoiding using an ssn you get multiple ink, Amex cards, etc.

It will also cost you. In CA, for example, a corporation and LLC have to pay minimum, annual franchise taxes in the amount of $800. In addition to the costs of legal, accounting and tax compliance, each will typically have annual information filing requirements, and related filing fees. So, in brief, the additional costs may outweigh the benefits (or greatly diminish them).

+1. They're aggressive on this $800 per year as well, you will not fly under the radar. They don't care if you have $0 income.

Thanks for that, it would definitely make it unworthwhile, although Louisiana, LLC's seem to be a dime a dozen without the min. tax payments.

The important thing to remember is the business cards being offered to you are "small business" cards and the card issuer is not relying on the credit of the business, but on your *personal* credit. That's why they require your SSN and make you the primary cardholder. If the business fails to pay the bill, then you are legally liable to pay, and it hits your *personal* credit report for any late payments. You can issue credit cards to other employees, but their charges are your responsibility. You can think of it as equivalent to co-signing for the business.

I'm sure it's possible at some point for the business to build up enough credit to apply for its own card, but I've never been successful, and I've founded 5 companies in the past 10 years, 4 of which are still operating, and no luck for me.

If you have an LLC and file personal/business together.... Not much extra work and then you can get business cards both as a sole proprietor in your name for the business name, and then the same card in your business LLC name.

It's worked for me it's the Ink cards to get one in my name (sole proprietor), and later get another one in the LLC name.


But regardless, you do still have to have great personal credit, bc that's who's credit they pull for you to get the card.
For example, I was in an LLC partnership with 4 guys and I had excellent credit while the other members didn't. They weren't able to get approvals for our business credit card, but I was...