Credit Card application

[derelyth]

Hi guys

I'm in need of some plastic for my Business, and as some of you may know I did not receive even a Debit card from HSBC, let-alone a CC. I went in and spoke to the Manager in a local Branch to my Uni who said that to qualify for Lending (under whcih, apparently, their Debit Card also falls under) I would need between £300-£700 cashflow in and out of my account a month before they would consider me for it at all.

I've had a chat with a family friend who also happens to be an Accountant and she said that taking out a Credit Card and having it DD'd from my Business account would be fine - she also said it would allow me to take advantage of any 0% Purchase offers.

After a bit of research, I found 2 Cards that seemed Ok, Tesco and Virgin. I was about to apply online for the Tesco card and was reading their "What you need" section and 2 points got me a bit confused/concerned.

What you'll need to apply:

• Your monthly income after tax and National Insurance
• Your employer's postcode and address

As a Student/Self-Employed, at the moment my Personal Income is virtually 0, except for one Benefit payment a month - the rest of my income is Business-related and so is Cash/Cheques paid into HSBC Biz.

Also - I am my Employer (in a way!) - so unless there is an option to say I am Self-Emplyed, would my own Postcode and address be fine?

Sorry if these are stupid Qs, I'm just not too sure and don't want something to go wrong and for it to kill my (already probably low by way of being a student) credit score...

Thanks,

Karl

 

[elaine@cheapaccounting]

Sorry - I am not sure what you are asking?

Are you a sole trader or limited company?

Is this a personal or business card?

I should have thought that without proof of address and earnings getting a Credit Card is going to be very difficult.

 

[derelyth]

Hi Elaine,

I'm a Sole Trader. This is regarding a Personal Card, to be paid from a Business Bank account using DD. I was lead to believe that I could take out the card (in my own name) and having it DD from my Business account, so it would be used for Business-related purchases only.

This is the only route I can see as HSBC have refused to consider me for even so much as a Debit Card, let-alone a CC because of the low activity on the account.

 

[elaine@cheapaccounting]

well for any credit card you would need to be credit checked

 

For those who cannot get a credit card there's always pre-paid credit cards (similar to debit cards). Virgin is doing one.

 

[derelyth]

I understand needing a Credit Check, I was just unsure where to go considering the Application asked for those two points which are a bit unclear for me considering my situation - for example as I am a Student on a Full Time Undergraduate course but also registered as Self Emplyed for this Business. And so, as a Student I am working for myself, so do not have "Employer" details as such, and my personal income only equates to a Disability Benefit that I receive into my personal account every 4 weeks. Any other "income" is related to my Business and so gets paid into the business account.

I have had a Credit Card (personal, under a student account) for the last 18months, paid off in full every month on time. My Contract mobile phone is also paid in full by DD from my personal account.

I'll try and go back to a basic question and build from there.

1) Can I apply for a personal credit card and tie it by DD to my business account?

2) As Tesco ask for the above quoted details, with the information I have given am I liable to be refused straight off the bat?

The reason I am after a second CC, is to keep things separate from my personal CC to make things easier to track. I have made one or two purchases for the business on my personal CC, and written them off/repaid them in the books accordingly, btu it just seems easier to have a separate CC for the Business.

Thanks for the replies so far all, sorry for the confusion

 

[Geoff T]

OP - HSBC (or "Waste of Time" as I think of them) are a naff bank.

If you need to find a business card, shop around... Barclays sorted me out - no bother!

HSBC are cutting business links - for various reasons - so I wouldn't waste my shoe leather on their floor...

Others may look more kindly upon your application...

 

[derelyth]

Thanks Geoff, I did get the impression I was nothing to them to be honest - the first time I went in about the card I was told "all the business reps are ill today" (how convenient!) and the second time the guy told me no cos of my low cashflow.

I have looked at switching to the Santander business account that has free banking for life and a switching process that takes the hassle away from me which looks quite promising. I would also get a Debit card. However, they dont offer a business CC to tie in with the business account, so I would in some ways still be where I am now.

I know they offer a Personal CC, but the 0% purchase period is only 3 months whereas others such as Tesco and Virgin are 12months which is why I was looking at the Tesco.

This then leads back to my original worries of not being accepted due to having a low income, the uncertainty of the employer address, and also the fact that I am a student!

 

[derelyth]

Just applied to Tesco.

Occupation: Student
Income: £200 (Monthly)

Declined

Guess it's back to square one and writing off the business purchases from my Personal CC

 

[Geoff T]

what about a 2nd personal account?

 

[derelyth]

I had thougth about it Geoff, but I already have the HSBC Biz Account now, and also being a Student I imagine I'd have similar troubles obtaining a CC on a second Personal account. Especially now, I dread to think what being declined has done to my Credit File and Score...

 

[KDMINX]

Be very carefull. Do NOT apply for any form of credit unless you are over 95% sure you will be accepted. A recent credit application will count against you!

 

[Geoff T]

Be very carefull. Do NOT apply for any form of credit unless you are over 95% sure you will be accepted. A recent credit application will count against you!

Agreed - try looking at other options...

 

[derelyth]

Agreed - try looking at other options...

But for credit, what other options are there?

 

[Geoff T]

But for credit, what other options are there?

I don't know them all, but what about a parent or someone (pref with a good rating) standing as a guarantor?

 

[derelyth]

I don't know them all, but what about a parent or someone (pref with a good rating) standing as a guarantor?

That's intriguing - something I've never heard of in terms of Credit Cards before, only the likes of Loans, Property rental etc. I'll try and find some more info on it.

Some more searching has brought up the "Credit-cuilding" Cards, ones I had overlooked before due to high APR's (34.9-39.9 avg, up to 189.9 in the case of *shudder* Provident) - however I have read that these are instant-approval without credit checks. I have no trouble paying off my personal CC, so is the above type (Captial One looks most promising, 34.9% but 56 days Int Free, like my personal card) a possibility?

End of the day I would really just like to be able to keep my business purchases away from my personal statements to keep the taxman happy...

 

[KDMINX]

That's intriguing - something I've never heard of in terms of Credit Cards before, only the likes of Loans, Property rental etc. I'll try and find some more info on it.

Some more searching has brought up the "Credit-cuilding" Cards, ones I had overlooked before due to high APR's (34.9-39.9 avg, up to 189.9 in the case of *shudder* Provident) - however I have read that these are instant-approval without credit checks. I have no trouble paying off my personal CC, so is the above type (Captial One looks most promising, 34.9% but 56 days Int Free, like my personal card) a possibility?

End of the day I would really just like to be able to keep my business purchases away from my personal statements to keep the taxman happy...

The tax man couldn't care less what bank accont you use or how you mix business and personal expenditure.

Your accountant on the other hand will probably have a preference.

 

[derelyth]

Ok, yeah - accountant preference, but it's also easier for me too :redface:

 

[Geoff T]

Go for the free days offer - if you can be sure you can pay it off... = 0% interest...

 

[derelyth]

It is tempting, my current Student Card gives 56days free but is paid off in full every month as I do have a small financial cushion - something I am willing to invest in the Business as and when it needs.

Paying off the balance each month should not be a problem as I have spoken things over with my Father and decided that any orders made that contain Hardware will be charged for up (Hardware only, labour paid on job completion) front to cover costs to me should I get messed around, to prevent me being left with un-needed stock costs. For other purchases, I will use the revenue I have built up, with further personal investment as and when it is needed.

Having said all of this however, as I was last night declined for the Tesco card, should I leave it some time before applying for a card such as the Capital One card? The web states high (70%+) acceptance and no credit check but then the web states a lot of things! So I'm not sure now

Thanks for putting up with me all It is very much appreciated

 

[KDMINX]

If you've got 2 or more applications on file in the last 6 months then this counts against you. It's not black and white, if everything else is good (salary, postcode, credit history, etc) a couple of applications won't matter. If you need every "point" to get over the threshold then it could make the difference.

Do not apply for more than 2 forms of credit in the same month this is seen as a BIG red flag!

That said capital one et al probably couldn't care less...

 

[skyhi2]

For those who cannot get a credit card there's always pre-paid credit cards (similar to debit cards). Virgin is doing one.

Did you have a look at this option derelyth?

Skyhi2.

 

[derelyth]

Did you have a look at this option derelyth?

Skyhi2.

It is something I have seen and am bearing in mind, however a CC would obviously be the preferred option due to the credit - even if it is 56 days such as the Capital One cards, because of then being able to receive payment for the goods I have ourchased (in the situation of a sale) instead of possibly being out of pocket for a while, or worse - overdrawn.

 

[Geoff T]

could your Dad stump up some cash (if he thinks it's that good a plan) or act as guarantor/partner - to get the card?

 

[Tej]

could your Dad stump up some cash (if he thinks it's that good a plan) or act as guarantor/partner - to get the card?

If your dad trusts you.. he could even order another card on his account with your name ( as a second card)... a lot easier. ( providing of course, that he has a credit card)

Did that for my daughter... no problem

 

[derelyth]

could your Dad stump up some cash (if he thinks it's that good a plan) or act as guarantor/partner - to get the card?

If your dad trusts you.. he could even order another card on his account with your name ( as a second card)... a lot easier. ( providing of course, that he has a credit card)

Did that for my daughter... no problem

These aren't things I have thought of, because of the risk of if things go wrong it could affect my Dad's rating, which as far as I know is spotless.

However Tej, you're reply intrigued me - would having a card on my Father's account still not mean the transactions would appear on his statement meaning still having to separate them for business?

Having said that, I still don't think I'd want to risk his rating for my business wrong-doings, that just ain't cricket :redface: Let alone I doubt he'd be terribly happy with the idea to be honest

Thanks again all

 

[Geoff T]

Mate - Tej hit on what I was hinting at - if Dad believes in what you're doing, and you sound good TBH - would he not go to bat for you?

Question then is - how much faith do you have in the business idea? (I don't think you'd give your Dad the bum's rush on purpose)

So - have faith and ask your Dad, or play safe and leave it till you can do yourself in a few years...

 

[Tej]

These aren't things I have thought of, because of the risk of if things go wrong it could affect my Dad's rating, which as far as I know is spotless.

However Tej, you're reply intrigued me - would having a card on my Father's account still not mean the transactions would appear on his statement meaning still having to separate them for business?

Having said that, I still don't think I'd want to risk his rating for my business wrong-doings, that just ain't cricket :redface: Let alone I doubt he'd be terribly happy with the idea to be honest

Thanks again all

Well... he would have to pay off the card .. your debts when due.. and you could pay him the money. Why be negative about your business?. Seems you don't have too much confidence to start with!

You could always try and manage your business conscientiously. Am sure your dad would be able to manage his credit rating.. He could even set up a credit limit for your card...manageable.. job done

Good Luck!

 

[Tej]

BTW.. as the card would be in your name.. you would get a separate statement for your card number!

Your dad would also get a copy of the statement .. along with his own statement of course.

He would know what you are spending every month

 

[derelyth]

Mate - Tej hit on what I was hinting at - if Dad believes in what you're doing, and you sound good TBH - would he not go to bat for you?

Question then is - how much faith do you have in the business idea? (I don't think you'd give your Dad the bum's rush on purpose)

So - have faith and ask your Dad, or play safe and leave it till you can do yourself in a few years...

It's not so much having a lack of faith in my business, more that my personality ends up in me analysing things from all possible directions so I tend to see negatives at the same time as positives :redface:

Well... he would have to pay off the card .. your debts when due.. and you could pay him the money. Why be negative about your business?. Seems you don't have too much confidence to start with!

You could always try and manage your business conscientiously. Am sure your dad would be able to manage his credit rating.. He could even set up a credit limit for your card...manageable.. job done

Good Luck!

BTW.. as the card would be in your name.. you would get a separate statement for your card number!

Your dad would also get a copy of the statement .. along with his own statement of course.

He would know what you are spending every month

Ahh OK! That last addition you made cleared up the majority of my confusion and it looks a viable option providing I can explain it to my Dad properly without confusing him too much.

As I would get my own statement and card, does it allow me to pay off the balance myself for example by DD? Or would it still be a case of my Dad paying it then me re-imbursing him?

 

[Tej]

It's not so much having a lack of faith in my business, more that my personality ends up in me analysing things from all possible directions so I tend to see negatives at the same time as positives :redface:


Ahh OK! That last addition you made cleared up the majority of my confusion and it looks a viable option providing I can explain it to my Dad properly without confusing him too much.

As I would get my own statement and card, does it allow me to pay off the balance myself for example by DD? Or would it still be a case of my Dad paying it then me re-imbursing him?

I don't know for sure. Easier for you to pay him.. and he pays off the amount... Keeps things simple...

 

[derelyth]

Alright, cheers Tej

I''ll have a chat with him about it tonight or tomorrow.

That Capital One Classic is still lingering in my mind also...

 

[Herbert 1962]

Hi
I had a Barclaycard Visa Credit Card and wanted to do something similar to you and keep personal finance away from business expenses such as petrol. I just applied to Barclaycard for their Mastercard Credit Card and they simply used the info from my visa card application to issue me with the card. The fact you already have a credit card therefore should be no bar to you getting a second.

Good luck

 

[oldeagleeye]

Frankly OP I think you are going to land yourself in all sorts of problems juggling around with 2 credits cards if as you say you are student with an unsecure business because the temptation will be there to use both eventually robbing peter to pay paul as the saying goes and that could end up losing your your credit rating to more than 7 years when you realy might need it for say a mortgage.

Whats more what are we really t6alking about. Just 12 statements a year and even if you make a number of personal purchases a month it is not difficult to tick a P or B against them so your accountant knows which is which. In any event you should do this basic bookkeeping yourself saving on accountants fees.

R

 

[derelyth]

Hi
I had a Barclaycard Visa Credit Card and wanted to do something similar to you and keep personal finance away from business expenses such as petrol. I just applied to Barclaycard for their Mastercard Credit Card and they simply used the info from my visa card application to issue me with the card. The fact you already have a credit card therefore should be no bar to you getting a second.

Good luck

I did think of this as my friend (Also a student) has managed to get 2 Airmiles CC's from LloydsTSB, one MC and one AMEX, he is however a Guernsey-customer with a Lloyds Offshore account so I don't know if that makes him more lucrative or less of a risk. Me however, am a UK Student on a normal Student account, with CC - but now have one refusal (from Tesco) on my file so I'm really not sure where to go with this.

 

[oldeagleeye]

DERELYTH

Terms do vary of course but with most Off-Shore CC's you either

1) You need to be a high net wealth individual. In many cases that means an income of around £150K a year and £250K on deposit. Even then you
need to keep a min balance of £50K in your account which is usually at least 5 TIMES your credit limit if say £10,000 or

2) Like Debit and Amex they are Charge Cards or

3) They are Pre-Pay top up cards like the ones on offer from Virgin & Palpay

As suggested I would do without yet more plastic if I were you. It is good discipline and as Will mentioned - you get one more knockback and you can forget applying again for at least a year as it will go against you.

r

 

[Tej]

LOL... OEE

You can lead a horse to water.......... comes to mind

 

[derelyth]

oldeagleeye: As far as I know they are these - the Airmiles Due Credit Cards, so I'm guessing he has somehow managed to get himself a CC account.

Tej: :| - that just bewildered me :redface:

 

[oldeagleeye]

D . That could be a company CC if he travels a lot. HMG are issuing CC's to 1,000's of civil servants in London. Quite surprised they got a corporate account with such a shiiilt credit record but then they do or we do own 3 banks.

Nice one Tej. Reminds me forgot to mention the other danger with plastic. The other half. Mine run up over £8K last year before I found out. Fool. No more blondes for me.

 

[derelyth]

D . That could be a company CC if he travels a lot. HMG are issuing CC's to 1,000's of civil servants in London. Quite surprised they got a corporate account with such a shiiilt credit record but then they do or we do own 3 banks.

Nice one Tej. Reminds me forgot to mention the other danger with plastic. The other half. Mine run up over £8K last year before I found out. Fool. No more blondes for me.

He's a student at my Uni, so how he got them is beyond me.

And I'm single so don't have that threat Still not sure what Tej actually meant though :redface: I really should get to bed...