To cut straight to the point, the main problem with the Discover Business Credit Card is that Discover will report the monthly activity for this business card to all three of the personal credit bureaus. So the business-related expenses you charge on the Discover business card will impact your personal credit rating. Yikes!
Discover is not the only lender that does this, but it does beg the question, “Then what is the difference between this business credit card and a regular, personal credit card?”
Well, since you asked, the simple answer is NOTHING. This is all part of learning to build your business the right way.
OK, now I know this may not be a deal-breaker for everyone, but why in the world would you want to have a business loan or a business line of credit show up on your personal credit report? Especially when it doesn’t have to be there.
You wouldn’t… so let’s move on. The Discover business card does not traditionally have great rates, either, but if you know my stance on rates then that’s not really a big factor in?a well-planned credit and lending strategy involving unsecured business lines of credit (UBLOCs) anyways.
Without creating a whole other blog tangent here about rates (we’ll do that another time) let’s just say that rates are always important, but they should almost never be the most important part of the decision-making process when we’re talking about a business credit line.
This doesn’t mean they’re not important, but you should not “shop rates” on credit lines — which represent short-term borrowing needs — in the same way that you might “shop rates” on long-term and fixed-rate debt instruments such as mortgages.
If you have any comments or questions let us know… but please avoid the Discover Business Credit Card in your search for business capital. If you are looking to start, build, or grow your company and need capital now — or you will in the future — contact us online, or stop by one of our offices at LenCred in New Jersey or Arkansas. We’d be happy to explain more about who we are and what we have to offer you.