Startups Stack Exchange Archive

What is the best way to apply for (a) credit card(s) for our startup to ensure any personal liability is shared equally between my cofounder and me?

• posted by: Matt on 2015-06-16
• tagged: tech-company, finance, cashflow
• score: 5

The company is a corporation. I can think of two options:

1. Open two separate business cards under our respective Social Security numbers, or
2. Jointly apply for a single business credit card using both our Social Security numbers.

This second option seems ideal, but is it possible? It seems hard to find providers that clearly provide this option.

Answer 5535

• posted by: braindice on 2015-06-17
• score: 3

I would suggest you get an Federal Identification Number and then use that as the identification - I think American Express specializes in cards like this.

Answer 5557

• posted by: Alain on 2015-06-19
• score: 3

A joint credit card doesn’t work the way you seem to think it does: each person is responsible for 100% of the debt. The bank can go after either of you. It’s not like you are liable for only half of the debt. You are liable for all of it.

In general, a personal credit card is a very bad way to finance a startup. They are just a glorified loan at extremely high interest rate. Ideally, you want a business card that is not secured with a personal guarantee. But banks won’t give one to a new business with no history (and no assets).

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