Today I have a guest post from Mrs. Accountability whose blog Out of Debt Again chronicles the journey her family is taking in getting out of debt for the second time. Mrs. Accountability blogs about getting out of debt, frugality, and just about anything related to personal finance.
About a month ago I decided it was finally time to open a business checking for my blog and side hustles. I was motivated in part because I decided to start using Quickbooks for my online business, and it is more difficult to track income when you have money coming in and going out of personal accounts. You can track it, but in order to actually keep income records in Quickbooks I would have to either pull in the personal accounts for reconciliation, or only add the transactions pertinent to the business. Pulling in everything meant I would have to reconcile the checking account twice, and adding only pertinent transactions meant I wouldn’t be able to reconcile the account.
One Friday I was at the bank, and curious as to how much I’d need to pay for a business checking. I was surprised to hear that there was no monthly fee, as long as I allowed an automatic transaction of $100 to go from the business checking to the business savings account each month.
That sounded great, and I decided to open the accounts. Once we got all the paperwork filled out, I was transferred to the business banker. Right away he asked if I would like to have a business credit card for the company. I told him I was not interested, because I don’t need a credit card for the company. I told him I wasn’t making that much money, and I didn’t have many expenses. And besides, I told him I was working to improve my credit score because my credit score is important to me and I didn’t want it dinged with an inquiry.
The banker was a little surprised, and tried to sell me on the credit card for a couple more minutes, but I told him I really don’t need any more credit.
I thought that was the end of that.
About one week later, I get a call from the business banker. He’s breathless as he tells me he JUST received a call from the credit card department and he had to call me right away and let me in on the good news! My business credit card was approved with a $15,000 limit! He acted as if this was unheard of, he acted like he’d won the lottery. He seemed to think this was highly unusual and they rarely see a credit card limit this high for a business. I wasn’t sure how to respond, because I never gave my approval to apply for the card, and I was worried this was going to cause my credit score to lose points. I reminded him that I didn’t want a credit card for the business, and asked him why they approved me for one, when I never agreed to apply for one. He said the bank automatically pushes the application through for all new accounts. He then went on to tell me how wonderful this was, and how much it was going to help me in my business in case I needed to advertise, or buy inventory or anything else that I needed for the business.
I agreed to go down a few days later as I had to sign more paperwork, and when I got there he was still very excited about my credit card limit. It started me to wondering if they get some kind of compensation for persuading people to apply for a credit card.
It was very uncomfortable for me, as I wasn’t excited about it at all. I was worried my credit score might be affected and told him so. He said if anything my credit score would be helped because this $15,000 would lower my credit to debt ratio. I am a sole proprietor, so the business credit card will show up on my personal credit information.
After he mentioned that, I decided to just go ahead and get the card, and I tried to muster up some enthusiasm and mentioned how it is safer to buy online using a credit card instead of a debit card, to which he agreed heartily.
Have you ever had a bank open a credit card for you without your permission?