Business credit cards allow you to charge your company’s expenses while ensuring those costs remain separate from your personal expenses.
As a new cardholder you may get a large sign-up bonus or a substantial period of time where you don’t pay any interest on revolved balances. Many have enticing extras such as purchase protection and travel perks, and allow you to earn cash, points, and miles as you charge.
High credit scores are usually required to qualify for business credit cards with the richest benefits, but getting a business card with bad credit is also possible.
To meet the wide span of potential cardholders, a few credit card issuers have developed business cards for bad credit. FICO Scores range from 300 to 850 and scores starting at 670 are typically considered good. Depending on the card, however, acceptable credit scores can be below that figure. These products may be unsecured or secured with collateral. Whichever you get, startup business credit cards for bad credit can help you manage your company’s costs while building better credit scores that will open up more credit options in the future.
Best business credit cards for bad credit
Here are the best business credit cards for poor credit that are currently available. Bankrate analyzed the cards based on credit qualification flexibility and the benefits they offer.
Capital One Spark Classic for Business: Best unsecured business credit card for fair credit
- Rewards: Unlimited 1 percent cash back on every purchase
- Welcome offer: n/a
- Annual fee: $0
- Regular APR: 26.99 percent (variable)
If your credit score is fair (starting at 580) you may qualify for the Capital One Spark Classic for Business. This basic business card has no annual fee and does not charge any foreign transaction fees. You will earn a flat 1 percent cash back on every purchase you make with the card.
Other benefits include free employee cards, year-end summaries, extended warranties and roadside assistance. Since the APR is definitely on the high side, paying balances in full when the bill is due will be to your financial advantage.
- Rewards: 1.5 percent cash back on qualifying purchases, or 1 point on every dollar spent and 1,000 bonus points each billing cycle when you spend at least $1,000 on qualifying purchases
- Welcome offer: n/a
- Annual fee: $0
- Regular APR: Prime + 11.90 percent (variable)
The Wells Fargo Business Secured Credit Card requires a cash deposit as collateral. This secured credit card is designed for businesses with no credit history or past credit challenges. To apply, you’ll first need a Wells Fargo business checking or savings account. Upon approval, a fixed amount of money will be transferred from your deposit account. Based on the security deposit, your credit limit will be between $500 and $25,000.
For rewards, you may choose cash back, where you get 1.5 percent cash back on qualifying purchases, or points where you get 1 point on every dollar you charge, plus 1,000 bonus points after spending $1,000 or more in any monthly billing period.
There are no annual or foreign transaction fees, and you can distribute up to 10 employee cards.
- Rewards: n/a
- Welcome offer: n/a
- Annual fee: $39
- Regular APR: 20.24 percent (variable)
This secured business credit card from the First National Bank of Omaha is for applicants with credit in the “bad” scoring range (300 to 579) but who would like to have a potentially large credit line. It requires that you open a First National Bank of Omaha savings account with at least $2,000, which will serve as collateral for your credit card obligations. You may request your own credit limit with a larger deposit, though, which can be up to $100,000. The credit limit you receive will be 110 percent of your security deposit.
This card has a $39 annual fee. There is no rewards program, but it does have the Visa SavingsEdge® program, which enables you to automatically receive discounts from participating merchants when you use the card for qualifying purchases.
The information about the Capital One Spark Classic for Business, Wells Fargo Business Secured Credit Card and Business Edition® Secured® Visa Card has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.
Is a business credit card for bad credit right for you?
As a business owner, a designated business credit card is a smart idea even when your credit isn’t quite in the good range. You don’t have to use the cash you have on hand, which can be insufficient to meet your needs. Not only will you begin to establish a positive relationship with the issuing bank, but when the issuer sends information about your account activity to the credit reporting agencies, you can begin to build your personal credit and increase your scores while also building your business credit.
The key is to treat the account carefully. Send all payments on time and either pay the bill to zero by the due date or maintain a very low balance compared to your credit limit. By doing so, you will prove that you can handle business credit cards responsibly. As your credit scores rise, you will be eligible for a greater variety of credit products.
How to choose the right business card for bad credit
When searching for a business credit card that is developed for people with no credit history, or a problematic one, consider the following:
What kind of credit history and credit score do you have?
Pull your consumer credit reports from TransUnion, Equifax and Experian, available for free once a year at annualcreditreport.com. Your credit files should be free of errors but if they’re not, dispute all inaccuracies, and then access your credit scores to see where you stand. With this information, you can focus on the credit products that are in your credit scoring range.
Should you get an unsecured or a secured card?
Unsecured credit cards are more challenging to qualify for when your credit scores are low because they are based entirely on your financial circumstances, with a strong emphasis on your credit history and scores. Secured cards are easier to qualify for because the credit card issuer can claim the funds held as collateral if you do not pay as agreed. Therefore, if you can’t qualify for an unsecured card but can set cash aside, a secured card can make a lot of sense.
What are the interest rates and fees?
Review the terms of the business credit cards you’re considering, and compare the interest rates and fees associated with each. If you plan on revolving balances, the lowest APR you can get will be especially important.
Are there any rewards and benefits you will use?
Most credit cards designed for people with bad credit are slim on bells and whistles, though some offer rewards programs and other benefits. Read what they are for each, and identify the card that best meets your needs and lifestyle.
Business cards for bad credit FAQ
Business credit cards are similar to personal credit cards, but there are some key differences to know before you apply:
What do I need to qualify for a business credit card?
The better your credit scores are, the easier it will be to qualify for a business credit card. Therefore you may want to increase your scores before applying. You can do this by sending all existing credit account payments on time and reducing your debt-to-credit limit ratio (owing less than 30 percent of what you can borrow is ideal).
How do I apply for a business card for bad credit?
The most common way to apply for a business credit card is with the issuer’s online application form. If you have an Employer Identification Number (EIN) you will use that, otherwise, you can use your Social Security number. In addition to your personal and financial data, you will usually list information for your business:
- Phone number
- Legal structure
- Number of employees
- Years in business
- Estimated monthly spending
If you’re applying for a secured business credit card, also be prepared to put down a cash deposit as collateral.
Are there business cards that don’t require a personal credit check?
A credit check is required for business credit cards, but that’s not always the case for personal credit cards. If you have damaged credit and would like to avoid a credit check altogether, check out Bankrate’s guide to the best credit cards for bad credit. Although these cards aren’t developed specifically for small businesses, you can use them to start or repair a credit history.
The bottom line
Good credit scores are not always essential to qualify for business credit cards. There are a few options, so choose the card that is right for you and your company. Once you have the card, use it responsibly from the start. Over time, even a single well-managed business credit card can help boost your credit scores, so keep track of your progress and consider adding more beneficial business cards when you’re ready to expand your credit portfolio.