Types Of Credit Cards

Understanding the different categories of credit instruments is essential for managing your reselling capital and scaling your purchasing power.

Consumer (Personal) Credit Cards

This is the most common category of credit. If you currently possess a credit card, it is likely a consumer card.

• Application Process: These cards require your Social Security Number (SSN) for the application.

• Reporting: Credit activity, including payment history and utilization, is reported directly to the primary consumer credit bureaus.

• Accessibility: The application process is generally straightforward and based on personal credit history.

Small Business Credit Cards

These cards are designed specifically for business owners and offer unique benefits for scaling operations.

• Eligibility: While intended for established businesses, individual resellers operating as sole proprietors are eligible to apply. If you are reselling sneakers or electronics, you qualify as a small business.

• Application Process: You can apply using either a business Employer Identification Number (EIN) or your SSN as a sole proprietor. Note that these applications can be more complex than personal cards.

• Reporting: Activity is primarily reported to business credit bureaus, though some issuers may also report to consumer bureaus.

Charge Cards

Charge cards function similarly to credit cards but feature a distinct repayment structure.

• Payment Terms: Unlike traditional credit cards, the balance on a charge card must typically be paid in full every month.

• Spending Limits: Many charge cards, such as those offered by American Express, do not have a preset spending limit, providing greater flexibility for high-volume purchases.

• Availability: These are available in both consumer and small business variations.