The Capital One business credit card is the most popular and most widely used business credit card by small business owners. It’s extremely popular and is liklely the “most widely used” because of their aggressive television advertising campaign [what’s in your wallet?] along with their active participation in the credit card affiliate marketing space.
We’ve talked about Capital One business credit cards in the past. While everything we talked about previously is still true, I want to talk about when and where it does still make sense to use these Capital One business credit cards. If you are obtaining your first one or two business credit cards – or your first five or six if you’re in need of larger amounts of capital – that is not the time to go get your Capital One business credit card. Why, you say? Well, there are other business credit cards that do not report your business card activity to your personal credit report the way Capital One does so you will want to begin with these other lenders first.
Part of a proper credit-acquisition process is to ensure that your personal credit is as good as possible. Personal credit is an asset and needs to be treated that way. It should be protected at all times and when you can improve your personal credit profile you should do that. A big aspect of your personal credit is referred to as utilization. Utilization is a calculation of your balances (what you owe) in relation to your available credit (how much you could borrow). You can assure yourself of the best possible credit score by keeping your utilization under 10%. This is always a challenge when you don’t understand how to borrow money the right way but it is actually quite easy to do when proper borrowing and credit acquisition are understood.
Everyone should try to have at least – as an absolute bare minimum – $50,000 of available credit that shows on your personal credit report. It is far better and much more advisable to have at least $100,000 in available credit that shows on your personal credit report. More is better but I’m sure you get the point. Then the majority of the credit you actually use as a business owner would be the additional credit that does NOT show up on your personal credit profile. Imagine having $100,000 to $150,000 of available credit that shows up on your personal credit file. You would then be able to use $10,000 to $15,000 of that available credit without having any real negative effect on your personal FICO scores. The second part of the image is that in addition to the $100,000 to $150,000 of available credit that shows on your personal credit file that you would also have between $50,000 – $200,000 of available business credit that does NOT show up on your personal credit file. If you can see that then you are beginning to understand what we mean by borrowing money the RIGHT way. You’ll also begin to realize what we do and what we’re all about at LenCred.
So when should I use the Capital One business credit card? It’s a great business credit card to use when you have less than $100,000 of available credit that shows up on your personal credit profile. Since Capital One will report your activity to your personal credit report for their Capital One business credit cards you would not want to use this business credit card unless it’s part of a credit improvement, enhancement, and protection strategy. There are many other business credit cards that are better for business credit or working capital purposes.
There’s more to this conversion but I think I’ve been long-winded enough at this point. Let us know if you have any questions about how to properly use business credit cards or if you want to learn more about borrowing money the RIGHT way as an entrepreneur or small business owner.