Your credit score is dismal, and you can’t seem to pay off your personal credit card. You’d think with that credit history, you’d never be approved for a business credit card.
You’re wrong. Even with a bad credit score, you can get a card. Business credit card companies will approve your application for certain types of cards for bad credit, such as a secured card.
Other business card issuers will require that you pay the entire credit card balance each monthly billing period.
What Is Bad or Poor Personal Credit?
A credit score of 579 or lower is considered bad or poor credit. Your personal credit history contributes to credit scores. But don’t forget there is also a business credit score.
Here are the main things that impact your personal credit score:
You have unpaid bills or loans from the past. This can include student loans.
You have made numerous late payments on utilities, a mortgage, or on personal credit cards.
You have exceeded your own credit limit on your personal card.
How Does a Business Owner Qualify for a Card with Bad or Poor Personal Credit Scores?
You can get a “secured” credit card. That means that you make a refundable security deposit upfront and can’t exceed that amount on charges on the card. It’s similar to the security deposit you make renting an apartment or home.
Or you can get 0% APR cards. With those, the credit card issuer requires that you pay your entire balance each billing cycle. With consistent payments, your credit line limit may increase. If you are still asking why should I get a business credit card, the best answer is you can start repairing your credit. Once you start repairing it, you can even get small business loans with bad credit.
How Do I Choose the Best Business Credit Cards for Bad or Poor Credit?
Most business credit cards offer your choice of great cash back or rewards programs. Until you move above a fair credit rating to good or excellent, you won’t qualify for cards with great programs.
But that doesn’t mean you can’t get a good card and build business credit. Business credit card issuers will do a personal credit check. You should be able to get approved for a business secured credit card. Or you may opt to start building credit by choosing a card that requires you to pay it off each billing cycle. While you are in this process look for ways how to fix your credit score.
The Best 6 Business Credit Cards for Bad Credit
Let’s start with secured credit cards.
With an unsecured credit card, no cash deposit from you is required, although the card may be linked to your business bank account.
With secured business credit cards, you must provide a deposit as your personal guarantee. You won’t get a high credit limit unless you make a high dollar deposit.
1. First National Bank Business Edition® Secured® Visa Card
The Business Edition® Secured Visa® Card | First National Bank of Omaha (fnbo.com) includes a benefit you’d normally only get with an unsecured corporate credit card – 0% APR for 12 billing cycles. You’ll also get 1.5% cash back with this secured visa card.
- Annual Fee: $0
- APR: 0% for 12 cycles, then 14.24-20.24%
- Credit Needed: Bad, poor and better.
2. Wells Fargo Business Secured Credit Card Account
You’ll tie the Wells Fargo card to a Wells Fargo business checking account. Compared to other secured small business credit cards, the Wells Fargo business secured credit card gives you 1.5% cashback, or you can choose to earn a point for every dollar spent. You’ll receive 1,000 bonus points every cycle that you spend $1,000 on qualifying business expenses and business purchases. Add no foreign transaction fees and free employee cards, and liberal credit limits up to $25,000, and the Wells Fargo business secured is the right business credit card for many.
The only downfall? Usage of the Wells Fargo business secured credit card is not reported to personal credit bureaus. You can still use the proof of your timely payments on the card to improve your credit report with major credit bureaus – you must do that on your own.
- Annual Fee: $0
- APR: 11.9% plus prime.
- Credit Needed: Bad, poor and better.
3. Capital One Platinum Secured business credit card
This is a great starter model in business credit card options. There’s no annual fee for the Capital One card, and you can get started with deposits as low as $49 to $200.
- Annual Fee: $0
- APR: 26.99%
- Credit Needed: Bad, poor or better
Best Startup Business Credit Cards for Bad Credit
If you’re a startup or entrepreneur, you’ll want a card that grows with you – while keeping your spending in line.
We’ve picked two that require you to pay off the entire balance each month, and a third card aimed at helping new businesses that rely on a fleet of vehicles.
4. SVB Innovators
As it sounds, the SVB Innovators is one of the best business credit cards for entrepreneurs.
- Deals for Startups: A business rewards program that gives you 2 points for every dollar spent. You can use the points to build a credit on your statement.
- Annual Fees: $0
- Introductory APR: 0%. You must pay the entire balance each cycle, but your credit limit grows rapidly as you make payments.
- Credit Needed: Bad, poor and better.
5. Stripe
Many retail or restaurant owners recognize Stripe as software used to process payments. If you already have a Stripe account, you can get a Stripe credit card.
- Deals for Startups: You’ll get 2% cash back and a $150 credit for Google ads. Free 3 months on Shopify.
- Annual Fee: $0
- Introductory APR: 0%. You must pay the entire balance each cycle.
- Credit Needed: Bad, poor or better.
6. Sam’s Club Business Mastercard
You must have a Sam’s Club membership. This Sam’s Club card is also accepted at Wal-Mart. Given the expansive choices at Sam’s and Wal-Mart, this is a great card for outfitting an office and getting big breaks on gas purchases.
- Deals for Startups: 5% cash back on gas purchases and 3% back on purchases at Sams. On purchases elsewhere, you’ll get 1% cash back.
- Annual Fee: $0
- Introductory APR: 15.65-23.65%
- Credit Needed: Bad, poor or better, and you must have a Sam’s Club membership.
Secured Card Vs. Unsecured Business Credit Card
With an unsecured card, you may spend more than you should. With a secured card, you can use your personal checking or savings account to make deposits, helping you rein in spending.
Unsecured credit cards are less restrictive, which can make them an ideal business credit card – for those who can stay within a budget. If you want to know more, look for resources on what are business credit cards.
Which is the best credit card for bad credit?
The best business credit card is probably going to be the one you get after you’ve cleaned up your credit score record.
In the meantime, we like the First National Bank secured visa card for its key features: no annual fees, 0% APR for 12 cycles, and 1.5% cash back.
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