Convert Personal CC's to Business?

MACscr · 03-07-2008, 08:35 AM

Not sure if this is appropriate for this site since its mainly personal finance, but this does affect my personal finance I guess, so here goes it.

I started my own business a few years back and used my own personal credit cards to get things going. I still have a fairly good amount of debt on them because of it, but I have recently registered my business as an LLC and got an EIN number. I was able to migrate my small business loan over to it fine, but I was wondering if anyone knew if I could convert one of my credit cards over to it as well. I have a great credit rating, but my overall amount of loans is high, so I would rather not apply for a new credit card (i actually just go turned down recently) for the business and then simply move the balance over.

Anyone know if this is possible? Im trying to move as much of my debt as possible over to my business since the debt incurred to fund my business, so that my personal liabilities are much lower.

Thanks,
- Mark

Jeremy · 03-07-2008, 10:41 AM

It may be technically possible, but even if you did, it would most likely be just a business card that has a personal guarantee (meaning if you're late, don't make payments, etc. you're still liable, as is your credit score).

Applying for a business card even if you have an EIN doesn't necessarily move the burden to the business. In order to truly separate your credit from you personally, you will need to establish business credit and find a business card that doesn't have a personal guarantee. This is almost impossible for a new business to find.

So, while they might be able to transfer the card to your business, it won't technically separate you from the debt. Of course, it may stop showing up on your credit report while in good standing, but any negative remarks on the credit would show up.

I'd also check the fine print on your loan to see whether the terms you signed granted a personal guarantee.

MACscr · 03-07-2008, 12:37 PM

I dont have any negative remarks, so im not worried about that. Its just that my debt to credit ratio is not good right now. I have about 50k worth of credit and 32k of that is used right now (not including my house/mortgage). That doesnt look to good when i only make about 36k right now. =(

Jeremy · 03-07-2008, 01:47 PM

Well if you can convert them over to the business, they should be removed off of your credit report. Just keep in mind that one slip up, and it will show up. And while they are not personal liabilities for accounting purposes, they still are if the business fails or is otherwise unable to keep up with payments.

MACscr · 03-08-2008, 10:02 AM

Well, I spoke with my bank this morning about the conversion, so we will see if its even possible. I will update this thread once I hear what can happen. Thanks for the advice.

03-07-2008, 08:35 AM	#1
MACscr Junior Member Join Date: Mar 2008 Posts: 3 Thanks: 0 Thanked 0 Times in 0 Posts Reputation: (10)	Convert Personal CC's to Business? Not sure if this is appropriate for this site since its mainly personal finance, but this does affect my personal finance I guess, so here goes it. I started my own business a few years back and used my own personal credit cards to get things going. I still have a fairly good amount of debt on them because of it, but I have recently registered my business as an LLC and got an EIN number. I was able to migrate my small business loan over to it fine, but I was wondering if anyone knew if I could convert one of my credit cards over to it as well. I have a great credit rating, but my overall amount of loans is high, so I would rather not apply for a new credit card (i actually just go turned down recently) for the business and then simply move the balance over. Anyone know if this is possible? Im trying to move as much of my debt as possible over to my business since the debt incurred to fund my business, so that my personal liabilities are much lower. Thanks, - Mark

03-07-2008, 10:41 AM	#2
Jeremy Member Join Date: Jan 2008 Posts: 33 Thanks: 0 Thanked 0 Times in 0 Posts Reputation: (12)	It may be technically possible, but even if you did, it would most likely be just a business card that has a personal guarantee (meaning if you're late, don't make payments, etc. you're still liable, as is your credit score). Applying for a business card even if you have an EIN doesn't necessarily move the burden to the business. In order to truly separate your credit from you personally, you will need to establish business credit and find a business card that doesn't have a personal guarantee. This is almost impossible for a new business to find. So, while they might be able to transfer the card to your business, it won't technically separate you from the debt. Of course, it may stop showing up on your credit report while in good standing, but any negative remarks on the credit would show up. I'd also check the fine print on your loan to see whether the terms you signed granted a personal guarantee. __________________ Generation X Finance - Helping a unique generation achieve financial independence. Financial Planning at About.com

03-07-2008, 01:47 PM	#4
Jeremy Member Join Date: Jan 2008 Posts: 33 Thanks: 0 Thanked 0 Times in 0 Posts Reputation: (12)	Well if you can convert them over to the business, they should be removed off of your credit report. Just keep in mind that one slip up, and it will show up. And while they are not personal liabilities for accounting purposes, they still are if the business fails or is otherwise unable to keep up with payments. __________________ Generation X Finance - Helping a unique generation achieve financial independence. Financial Planning at About.com

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03-07-2008, 12:37 PM	#3
MACscr Junior Member Join Date: Mar 2008 Posts: 3 Thanks: 0 Thanked 0 Times in 0 Posts Reputation: (10)	I dont have any negative remarks, so im not worried about that. Its just that my debt to credit ratio is not good right now. I have about 50k worth of credit and 32k of that is used right now (not including my house/mortgage). That doesnt look to good when i only make about 36k right now. =(

03-08-2008, 10:02 AM	#5
MACscr Junior Member Join Date: Mar 2008 Posts: 3 Thanks: 0 Thanked 0 Times in 0 Posts Reputation: (10)	Well, I spoke with my bank this morning about the conversion, so we will see if its even possible. I will update this thread once I hear what can happen. Thanks for the advice.