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The True Story Behind Credit Card Stacking and Why It’s Not Always Bad

Reviewed by Ty Crandall

September 15, 2023


credit card stacking Credit Suite

Credit card stacking is a way of gaining access to funds through the use of more than one business credit card. With credit stacking, business credit can be used to fund a business without going the route of a traditional small business loan. It also helps build credit history.

This can be especially helpful for a small business that doesn’t have traditional funding options. However, the form of business financing sometimes gets a bad rap. 

Is Credit Card Stacking Always Bad? 

No, stacking credit cards is not always bad. In fact, a credit card stacking program can be a very useful tool for funding a business and building credit history. It even works well for startups. You just have to know how to avoid the scams. 

What is Credit Card Stacking?

This type of funding involves applying for multiple credit cards at once. The business owner then has access to all of the available credit on every card for which they get approval. 

The money can then be used for business expenses in a number of ways, including cash advances in many cases. Since these are credit cards, there are rarely any limits on the types of expenses the funds can cover.

cA major benefit of credit stacking is being able to skip having a collateral. In fact, this is totally unsecured business financing. However, you do need a personal guarantee. That requires a decent personal credit score, usually 700 or above.

Not only do the funds stack, but so do the promotional benefits and rewards. For example, if each card has a 0% interest rate for the first 6 months, then all the funds are available with no interest for the first 6 months.

Any reward points towards cash back, statement credit, or anything else can be used as well, which helps in the long term. Of course, it’s not all sunshine and roses. Managing multiple credit cards, rewards, and payments can be overwhelming and difficult. 

This is one of the major pitfalls of credit stacking. Small business owners that try to get this type of funding on their own can end up drowning if they aren’t careful. 

Credit cards are notorious for high interest rates. Once promotional rates are over, balances can skyrocket quickly. In addition, if payments are missed, late fees can kick in and cause major issues. 

Add all of this to the fact that a personal guarantee means that the business owner’s personal credit could be at stake, and you can easily see how this type of loan stacking can leave a bad taste for some. 

Information on how you can Discover 7 Easy Vendors to Start Building Business Credit Immediately - without a Personal Credit Check or Guarantee via Credit Suite

Is Credit Card Stacking a Scam?

No, in and of itself, this type of funding is not a scam. Still, there are scams like this out there. You need to know how to tell the difference between a scam and a legitimate card stacking program to fund your business. 

Once you know the difference, you can take advantage of this funding option while protecting yourself and your business. 

About the Seed Capital Card Stacking Scandal

Let’s talk about the elephant in the room. If you do a Google search on “credit card stacking” you are going to see a lot about Seed Capital. They were running a card stacking scam, and the Federal Trade Commission put a stop to it. Here is how it went down.

First, Seed Capital did not tell companies how this funding would work. Borrowers did not realize they were applying for multiple credit cards. In addition, many times a personal credit card may have been included, and they had no idea. Furthermore, Seed was filling out the credit applications, not the client.

That’s not necessarily terrible if the client knows about it and has given formal permission, but Seed was also found to be lying about the income of the clients on the applications. In fact, sometimes income was inflated by as much as $100,000. To the credit card issuer, that is fraudulent account opening. 

The result was that many clients were getting approval for multiple cards with very high limits. Again, all of this was without their knowledge.

But There Is More to the Seed Capital Story

Now, the rest of the story. That’s right, there’s more. Most clients found Seed when they looked into some sort of business training program. Behind the scenes, the program had a deal with Seed to use their credit card stacking program to finance the training package for the client. 

The client would realize they did not need to or could not make the cash outlay. The training company would offer financing and have the client apply. Then, they would send the info to Seed, who would apply for the credit cards as mentioned above. After that, Seed would let the training company know what the total limit was, and the client would be charged close to that amount, virtually maxing out multiple cards at once.

Not only that, but most clients felt the “training” was a scam itself, believing it not to be useful once they went through the program. Then, they were stuck with thousands of dollars of credit card debt and a wrecked personal credit score due to high utilization ratios. Unfortunately, they did not have anything useful to show for it. 

Information on how you can Discover 7 Easy Vendors to Start Building Business Credit Immediately - without a Personal Credit Check or Guarantee via Credit Suite

Legit Card Stacking to Fund a Business

This is not how legitimate card stacking programs work. On the contrary, you can actually even do this to fund a startup.  It’s better if you have someone to help you. A professional can help you find the best card options and the lowest rates. 

One thing they can help do is find cards with introductory 0 APR. This allows for 0% interest, sometimes for over a year, and at least until the introductory interest rate runs out. Credit Suite has a program like this called The Credit Line Hybrid.

Here are some tips on how to use credit card stacking legitimately to fund a business. 

Tip 1: Find a Trusted Professional to Help You

This may actually be the hardest tip to follow. Trusted professionals are hard to come by. Most credit card stacking companies are in it for the money. 

Of course, no one wants to work for free, but it is important to find someone that offers you value that is worth what you pay them.  Most other tips rely on finding the right kind of help. 

Tip 2: Be Organized 

A professional can help with this as well. Ideally, a company would do most of the heavy lifting when it comes to applying for each business credit card. Then, they could either require one payment from you that they disperse accordingly. 

That said, it may not be possible. That means organization is key to managing payments, end dates on promotions, and ensuring business credit card rewards are used most efficiently. No one wants to leave cash back or a gift card sitting on the table. 

Tip 3: Use Funds to Grow Funds

Make business credit card stacking work for you by using the funds to bridge temporary cash gaps or for growth and expansion. Consider it a short-term funding option.

Eventually, a traditional business loan, or even multiple loans, can be possible if you manage credit card stacking funding well.

Tip 4: Choose the Best Credit Cards for Your Business

A professional that knows what they are doing will make sure this happens automatically. If it falls to you, be sure you pay attention to the rewards offered and promotional rates. 

You want rewards you will actually earn and use, and you want the lowest rates for the longest amount of time. It’s also important to look for cards with low or no annual fees. 

Credit Card Stacking Pros

There are plenty of pros when it comes to this type of funding. First, it’s secured. That relieves the worry of collateral. In addition, it offers the potential for low or no interest for a limited period of time. 

That is a huge benefit, especially if you plan to use it and pay it off before the promotional rates run out. 

Lastly, do not sleep on the potential that rewards offer. If you are successful in finding the best credit cards for your business, rewards can be a big benefit. The key is to find those cards with rewards you will actually be able to benefit from. 

Credit Card Stacking Cons

The cons of using credit card stacking for funding are similar to those of using credit cards at all. Interest can be exorbitant, fees that come along with missed payments add up quickly, and the potential damage to personal credit is scary. 

Add in the potential to fall in with the wrong company and fall victim to scams, and you can see why some business owners never consider this type of funding. It’s a good option when there are no others, but it works best as a temporary solution until others present themselves.

Information on how you can Discover 7 Easy Vendors to Start Building Business Credit Immediately - without a Personal Credit Check or Guarantee via Credit Suite

Who is Credit Card Stacking a Good Fit For? 

Credit card stacking works better for some than others. Essentially, it functions best as a business line rather than a loan. Small business owners who are just getting started, have good personal business credit and are trying to build their business credit tend to do well. 

Small retail and service-oriented businesses can make use of credit card stacking to cover marketing or temporary cash gaps. Businesses that tend to have a seasonal flow of cash can use this type of funding to help during the slow times.

Retail businesses can use the funds for inventory while service operations may need funds for supplies. 

Online businesses can use funds from stacking credit to build and develop their website or even order inventory. Other businesses with low overhead costs, especially home-based businesses, fit well with this type of funding due to its flexible nature. 

Basically, credit card stacking is a good fit for smaller or newer businesses that can use the funds in the short term on smaller needs and repay quickly. It’s not really a good option for larger or long-term projects. 

For example, it would not be a good idea to use funds from this type of financing to build a new building or purchase a new automobile. Those things will need to be paid over time and will not generate enough cash to pay off the balance before interest rates go up.

What Are Credit Card Stacking Companies? 

In theory, these are companies that do the heavy lifting for you when it comes to credit card stacking. They help you find the best credit cards for your business, and walk you through the process of applying for them.  

After approval, they help you manage the payments and rewards, ensuring that everything is on time, and promotional rates and rewards are used as efficiently as possible. 

Practically, this means learning about your business and finding the cards with the lowest rates for the longest amount of time with rewards that will actually benefit the business. 

However, there are not actually a ton of “credit card stacking companies” out there in this sense. Essentially, what happens is a lender, not a credit card company, offers funding in the form of credit card stacking as one of many funding options. 

This lender will take one application, explain the funding and how it works, and most vary in how the management of payments and rewards are actually executed. Most often, the bulk falls on the borrower after the initial application and approval process. 

The key to avoiding a scam when it comes to a lender that offers credit card stacking is to make sure you know what you are applying for and read all the fine print. Also, research the lender.

 Types of Credit Cards to Look For 

First, look for cards you qualify for. Do not waste your time on cards that you cannot get. Then, find the lowest interest rates, even promotional ones. You want the lowest rates for the longest length of time. 

Pay attention to the credit limit as well. A larger credit limit is better, but do not discount cards with a small credit limit that offers  low rates. 

After that, find cards that offer rewards you will use. There is no need to apply for a travel credit card if you do not travel enough to make use of those types of perks. Similarly, if the eligible purchases required for rewards are not things you would purchase, those rewards will do you no good.

Lastly, weed out those with huge annual fees. You want those with low or no annual fees, if possible. 

Typical Pitfalls 

It’s not hard to imagine what the typical pitfalls are for businesses that use this type of funding. Carrying a balance past the promotional APR period is huge, for example. 

It may happen sometimes, but it is vital to pay attention and realize what the impact will be. A $5,000 balance can be $6.400 and then $8,100. That’s only interest, not counting combined purchases after the original $5,000. Before you know it, you’re drowning. 

Applying for cards with rewards that cannot be earned by the business, or not leveraging rewards is another pitfall. Use the cashback or statement credit and your bank account will thank you. 

Information on how you can Discover 7 Easy Vendors to Start Building Business Credit Immediately - without a Personal Credit Check or Guarantee via Credit Suite

The Credit Line Hybrid

You need good credit or a credit partner with good credit to qualify for the Credit Line Hybrid. Like all credit card stacking, there is no collateral requirement.  You can use the funds on anything for your business. 

For example: 

  • Real estate
  • Equipment
  • Working capital
  • Even startup expenses

There is no down payment necessary and no income documentation either. This is totally “no-doc” financing. Approval can range up to $150,000. 

The Credit Line Hybrid Requirements

How do you qualify for The Credit Line Hybrid? You need a personal credit score of 700 or above or a credit partner that does. Other requirements include: 

  • No late payments for the past 24 months
  • 6 inquires or less in the past 6 months
  • No open collections or bankruptcies
  • At least 2 open credit cards with a $2,000 limit or higher
  • At least 1 ½ years of good payment history
  • Utilization rate no higher than 40%
  • And no bankruptcies in the past 7 years

Benefits of The Credit Line Hybrid

Not having to provide financials is a big benefit that a traditional loan does not offer.  Also, the minimum credit score is much less than what other types of financing require. Furthermore, you have the option to use a credit partner if you do not meet the minimum credit score.

Another huge plus is that this program can help build your business credit score, which increases the fundability of your business. This is because often the cards in the line report to the business credit reporting agencies.

How is The Credit Line Hybrid Different From the Scams

There are a number of differences between our program and the credit card stacking scams out there. First, you know exactly what is happening and how it works before you sign up for anything. We will never apply for credit cards without your knowledge.

Next, our program does not include inflating income in an effort to get higher limits. Finally, you are free to use the money how you choose.  We do not work with partners to provide funding for anything specific. We simply help you get the financing you need to grow your business the way you need to do it.

Top Tips to Avoid Credit Card Stacking Scams

First, if you are trying to purchase a product or service and they offer financing, ask the questions. Read the fine print, and make sure you know exactly where the funding is coming from. Also, always monitor your personal and business credit reports to ensure there are no unexpected accounts on them. 

In addition, work directly with a trusted company. Part of the problem with the Seed Capital fiasco was that the funding was for a specific service that the client could not afford to pay cash for.  They may not have even realized Seed Capital was involved at all. 

That means they never had a chance to research Seed on their own. When you go to the company directly, you can do your own research.  Looking at reviews and the Better Business Bureau can sometimes save you a lot of pain. 

When you work with Credit Suite directly, you not only get access to the financing, but we can help you find any other products, services, or maybe even a loan that could help you grow your business even more. 

Information on how you can Discover 7 Easy Vendors to Start Building Business Credit Immediately - without a Personal Credit Check or Guarantee via Credit Suite

Credit Card Stacking is a Legit Business Funding Option

This is a legitimate business financing option for many small businesses, especially if a loan isn’t an option. It’s flexible, and it can help a business build a positive credit history, which in turn helps with qualifying for a business loan in the future. 

It’s not perfect, and it requires careful management, but it can mean the difference between growing a successful business or going bust for many.

About the author 

Faith Stewart

Faith has a BBA with a major in Accounting, and a combined 20 years of experience in the fields of finance and account.

Before switching to writing, she spent 10 years working in various areas of small business and personal finance and accounting, including working as a public auditor at BKD, LLP, Financial Director at Central Arkansas Development Council, and Commercial Credit Analyst at Farmer's Bank and Trust.

  1. Can you recommend a credit card stacking company? I have used Preferred Funding Group for one of my clients with less than impressive results. I appreciate your recommendations.

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