Are You Sure You Want a Business Credit Card?

Lee gave me permission to post this valuable lesson. It is Important for all small business owners. Once we get a home we want to keep it.

Are You Sure You Want a Business Credit Card?


By Lee R. Phillips

I have students asking about establishing business credit. It’s a myth. As a small business, real estate investor, or general entrepreneur you don’t have a prayer of establishing “business credit.” You will always sign personally for any “credit” your business gets.

The major competitor I had in do-it-yourself asset protection packages went bankrupt a couple of years ago. (Beware! His products are still out there being sold by a half dozen groups. The products are out of date and there is no support – in spite of what you are told.) His company was a ton bigger than mine. It was doing tons of seminars, and the back end sales were huge (ruthless). He had signed personally for all of the company credit cards. That’s the only way you will ever get a business credit card. When his company went bankrupt, he was on the hook for over $10 million. NOT HAPPY! (Not a good asset protection technique either.)

You actually shouldn’t have a business credit card. They are dangerous. Just use a personal card for everything and then pay it each month the way the IRS wants you to.

Your personal credit card is governed by the Credit Cardholders Bill of Rights, but those laws don’t apply to business credit cards. BIG RED FLAG!

Business cards are subject to the whims of the credit card company. The interest rates can be raised at will, even retroactively. Billing cycles can be changed at will. The rules just aren’t the same at all. The real threat a business card represents is the liability of fraud. You lose your card, and you are toast. With a personal card you are liable for $50, but with a business card there is no liability limit. You’re stuck, as a business and personally, because I will guarantee you have signed personally for the card.

So, don’t use a business card. Use a personal card. You will charge everything (personal and business) on the one card. But wait, you can’t comingle money and expect your corporate (LLC) shield to protect you. Comingling money is the number one no no. You’re not comingling money by charging the card. How you make the payment to the card is the issue.

When you get your credit card statement, go down the list and check each charge. (You should always do that anyway.) By each charge, write whether it is business or personal. In my case there are a number of companies, so I have to designate which company the charge applies to. Then add up the business and personal charges. Enclose two checks in the payment envelope; one from your business account and one from your personal account. The credit card company will cash each check and apply it toward the monthly bill. Sometimes we write half a dozen checks and put them in the same envelope.

The IRS actually wants to see the money coming out of each account. If you do it that way, there is no question you are not comingling money. Your asset protection shield is safe. Yes, you could cut one check to the credit card company and then reimburse yourself from your company, but just do the multiple check thing. You can follow the same concept if you pay online. You now have the protection of a personal card, your asset protection shield is intact, and the IRS is happy. Don’t you love a happy IRS?

For other asset protection information and articles of interest, check out my website at www.phillipsassetprotection.com.

To Your Success,

Lee Phillips LegaLees Corporation 556 East 1400 South Orem, UT 84097

800-806-1998

Own a Home in Georgia Today

Owner Financed Homes in Georgia - NO BANKS NEEDED

Cute House in Conley 3 bed 1 bath Brick $650 month

First try at a video on a blog. Sorry for the shaky quality

Great Deal on a Beautiful home in Covington GA

Custom Executive home in great area and neighborhood in Covington. Three bedroom Two bath. Spotless inside and out. Ready for the family that needs the perfect home. No work needed maintenance free with every bonus added.Must see this beauty. Best price in the area for a sale. Owner may finance or lease Purchase to the right candidate. the granite countertops are beautiful and the custom paint makes this look like a Magazine home for Best Homes in Georgia. This wont last at the price. See more pictures at http://www.gadiscountproperties.com/

Want a great owner financed home where
No Banks are Needed, No Mortgage Company to prove your worth to, no big paperwork,
no waiting for 3 months to be approved?

We have this type of deal every week..

They dont last but here it is>>>We have just
located and have a contract to move this great house at 1030 Lakeview Knoll in McDonough, GA this house sold for $265000 plus just two years ago. Owner is willing to just let it go!!! Great Location, 4 bedroom 2.5 Baths, Custom home in Lake Haven Community. Owner will finance with only $6000 up front and $1395. Great schools, great neighborhood, great house, Deck on back, Big Bonus bedroom, large cozy family room, updates, good floor plan. See more pictures at http://www.sellorbuyhouses.com/ or http://www.goodhouses.org/ or http://www.gadiscountproperties.com/ call Mark today for a showing at 770-480-0209. This wont last a week........Call today!

Rain or Shine Find your new Georgia House

Fall in Georgia is a great time, the leaves are turning colors and it is getting colder. For those who need a home before the next Holiday it is also a great time to look for that new home or dream house and actually buy it or Lease purchase it. We have a wide selection of homes you can get into quickly without going to the bank. OWNER FINANCED HOMES. NO BANKS NEEDED to own your own home. This one is in Henry County near Lake Spivey and a steal of a deal with the pool. Just reduced in price see it at http://www,gadiscountproperties.com

along with several new homes on our website. Do not wait buy one today.