Bad credit, weak credit, or damaged credit can make it difficult to qualify for most business credit cards—or any credit cards, for that matter. There are choices for firms with poor credit, but most need a deposit, so plan on using a secured card.
If your credit isn’t getting you the best business credit cards, but you think you need one, we have a list of the best business credit cards for bad credit to help you build or restore your business credit.
How to Get a Business Credit Card Even if You Have Bad Credit
When applying, the most important thing to remember is to limit your search to cards for which you are most likely to qualify. Multiple credit inquiries on your report may arise from applying for multiple cards in a short period of time. These can have an impact on your credit scores, so apply for cards that you’re more likely to receive.
Business credit cards can help you keep emergency funds on hand at all times. Search for and apply for your top business credit card matches for free! If you receive a business credit card, attempt to use it only for business expenditures to keep your business and personal funds separate. This will make tracking your business expenses for tax purposes much easier.
Best Business Cards for People with Bad Credit
#1. Capital One Spark Business Classic
The CapOne Spark Classic card provides simple benefits, but most importantly, you don’t need good credit to be authorized as a business owner!
This basic business credit card comes with no annual fee and unlimited 1% cash-back benefits. It has lower credit score restrictions than many other business credit cards.
You will have free access to employee cards, no fraud liability, the ability to build credit, no foreign transaction costs, purchase protection, extended warranty, and roadside assistance!
Cash-back incentives do not expire as long as your account is open, and you may redeem them for statement credits or a check!
#2. Wells Fargo Secured Business Credit Card
If you’re a small business owner with bad credit or no credit history, Wells Fargo has created a credit card that we like.
The Wells Fargo Business Secured card allows you to open this business credit card by depositing monies into a collateral account. Depending on the size of your deposit, your credit line could range from $500 to $25,000.
This card will earn you either:
- You will receive 1.5% cash back on your purchases.
- Every monthly billing period, you will earn 1 point for every $1 spent, with a bonus of 1,000 points if your organization spends $1,000 or more.
This card has no annual charge and no foreign transaction fees, and it can be upgraded to unsecured credit based on internal Wells Fargo reviews.
You can issue up to ten staff cards, establish a business credit history, and benefit from zero liability protection and fraud monitoring.
Every quarter, your cash-back will be automatically paid to your credit card account or qualified checking/savings account (March, June, September, and December).
You can use your points to purchase gift cards, goods, airline tickets, and other items. When you redeem points online, you’ll also receive a 10% points credit rebate. Keep in mind that each airline ticket redemption incurs a $24 redemption fee.
#3. BBVA Secured Visa® Business Credit Card
The BBVA Secured Business card is a secured business credit card for customers with a limited credit history or poor credit health.
The card is secured by your BBVA Secured Credit Card Savings Account, which requires a $500 minimum startup deposit and ongoing deposits in $100 increments at any time. Your credit limit is 90% of the balance in your savings account.
This card earns 1.5 BBVA Rewards points for every $1 spent on qualified purchases and has no annual fee for the first year ($40 after that).
Free employee cards, travel and emergency help, travel accident insurance, purchase security and extended warranty protection, an auto rental collision damage waiver program, and the Visa Liability Waiver are among the other advantages.
Only Alabama, Florida, Texas, Arizona, Colorado, California, and New Mexico have access to this card.
#4. First National Bank of Omaha Business Edition Secured Visa Card
This secured business credit card from First National Bank of Omaha is designed for candidates with “bad” credit (300 to 579) who want a potentially big credit line. The First National Bank of Omaha Business Edition® Secured® Visa Card* requires you to open a First National Bank of Omaha savings accounts with a minimum balance of $2,000 to serve as collateral for your credit card obligations. However, you can request your own credit limit with a greater deposit of up to $100,000. Your credit limit will be 110 percent of your security deposit.
The yearly cost for this card is $39 per year. There is no rewards program, but there is the Visa SavingsEdge® program, which allows you to receive automatic discounts from participating shops when you use the card for qualified transactions.
#5. Union Bank Business Secured Visa Credit Card
The Union Bank® Business Secured Visa® Credit Card* has a credit limit of up to $25,000. Your credit limit, like that of all secured credit cards, is governed by the amount of your security deposit. Due to its very low APR of 13.99 percent, this secured credit card is ideal for business owners who want to enhance their credit score while also increasing their business (variable).
#6. The OpenSky Secured Visa Credit Card
The OpenSky® Secured Visa® Credit Card is a bad alternative for business owners who are unable to finance their business due to poor personal credit. You don’t need any credit check, which relieves a great deal of stress from folks recuperating from bankruptcy. Instead, you’ll pay a security deposit ranging from $200 to $3,000. The amount you deposit into the account determines your credit limit. The correct secured credit card can help you build credit over time, and its low 19.64 percent (variable) APR provides an incentive for many business owners trying to increase their credit score.
Can I use my EIN to get a credit card?
In some circumstances, corporate credit cards do not require an SSN, allowing you to obtain a business card using simply your EIN.
What Do I Need to Get a Business Credit Card?
The higher your credit score, the easier it will be to get approved for a business credit card. As a result, you may want to improve your scores before applying. You can accomplish this by making on-time payments on all existing credit accounts and lowering your credit utilization percentage (owing less than 30 percent of what you can borrow is ideal).
How Can I Apply for a Bad Credit Business Card?
The most popular method of applying for a business credit card is through the issuer’s online application form. You will enter your Employer Identification Number (EIN) if you have one; otherwise, you will use your Social Security number. In addition to your personal and financial information, you will normally include business-related information:
- Name
- Address
- Telephone number
- Legal framework
- Industry
- Employees’ number
- Years in the business
- Revenue
- Budgeted monthly spending
Be prepared to put down a cash deposit as collateral if you apply for a secured business credit card.
Is It Possible to Obtain Business Cards Without a Personal Credit Check?
A credit check is usually necessary for business credit cards, but not typically for personal credit cards. Although many cards, like the OpenSky Secured Visa Credit Card on our list, aren’t designed expressly for small businesses, you can use them to establish or rebuild credit history.
How to Rebuild Your Credit and Qualify for More Credit Card Options
There are several strategies you may use to improve your credit score and broaden your business finance options. Let’s talk about them.
#1. Pay your bills on time and in full if possible
Missing payment deadlines is a proven method to lower your credit score. Always emphasize making on-time payments! Paying off your obligations in full also indicates your creditworthiness to creditors and improves your credit usage ratio, both of which will help your credit.
#2. Start Building Credit With Your Card
The most important aspect of using a credit card to improve your credit is to constantly pay off your monthly bill. After you’ve paid off your credit card amount for a while, you may be eligible to advance to better cards or apply for low-interest loans. See our articles on how to get a business credit card and how to use a credit card to establish credit for more information.
#3. Option to Upgrade to an Unsecured Card
Many secured credit card issuers provide the option to upgrade to an unsecured card once you’ve proved responsible use of your secured card, which can take up to six months. You will receive your security money refunded after this is completed.
#4. Check Your Credit Score Frequently
It’s a good idea to check your credit score on a regular basis to track your progress in improving your credit health. When you log in to your account, some card issuers will provide you with free access to an in-house credit monitoring service, allowing you to check your score. You can also go to a free credit score website.
#5. Track and Monitor Your Spending Habits
It’s also a good idea to monitor your spending habits by reviewing your credit card statements on a regular basis. If you find yourself charging more on your credit card than you intended, consider transferring a larger amount of your usual expenses to your debit card instead (if possible).
Is my EIN connected to my SSN?
An EIN is not tied to or associated with your Social Security number. As a result, it protects your personal privacy by utilizing a number other than your SSN for reporting purposes.
Can I get a business loan with just my EIN number?
Yes, in some cases, a lender will just consider your EIN when lending to you rather than your personal credit score. They will not use your EIN alone, as there are several elements that go into qualifying for a small business loan.
Alternatives to Business Credit Cards for Those With Bad Credit
Because secured credit cards are attached to a cash deposit, providers are more ready to engage with business owners who have bad personal credit or no credit history. If you do not pay what you owe, the card company might simply take that deposit.
However, if you require more money than the credit limit on a secured card, bad-credit business loans may be a possibility. Fundbox, for example, provides a business line of credit worth up to $150,000 to business owners with a credit score of at least 600 and six months in business.
If you’re a startup with bad credit, invoice financing may be a viable alternative based on your business plan. BlueVine’s invoice financing program, for example, provides up to $5 million in cash and is available to firms with a minimum credit score of 530 and at least three months in business.
Conclusion
When picking which card to acquire, keep in mind that not all of them work the same way. If you use a secured card or a debit card, you should have funds available at all times because the payment is made from the account to which the card is attached. If you choose a charge card, make sure you pay off the entire sum each month. Responsible use of your business card can help you establish credit and eventually qualify for a standard business credit card.
Related Articles
- FREE BUSINESS CHECKING ACCOUNT: Best 15+2022 option & how–to-open guide
- SECURED VS UNSECURED CREDIT CARD: Comparing the Difference
- Secured Business Credit Card: The 5 Best in 2022 (+ Free Tips)
- FINANCE CHARGE: What Exactly Are Finance Charges? Why Are They Important?
- FIRST CREDIT CARD: What It Is and All You Need to Know
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