Securing a line of credit for your business can be difficult when your credit score is below average or you’ve made credit mistakes in the past. But all isn’t lost and, in fact, some business credit cards for bad credit come with lax standards that make it significantly easier to get approved. This may mean they’re secured credit cards, which require a cash deposit as collateral to get started. However, small business credit cards for bad credit can help you get your foot in the door.
If you’re looking for the easiest business credit card to get, consider the cards we’ve highlighted below and how they might work for your small business.
Here are Bankrate’s top picks for business credit cards for bad credit in 2020:
- Best overall: Capital One® Spark® Classic for Business
- Best secured credit card for business: Wells Fargo Business Secured Credit Card
- Best secured credit card with rewards: BBVA Compass Business Secured Visa Credit Card
Capital One Spark Classic for Business
- Earn an unlimited 1% back on all purchases
- No annual fee
- Available for average credit
- Free employee cards
Why it’s the best overall business credit card for bad credit
We like the Capital One Spark Classic for Business the most among business credit cards for bad credit based on the simple fact this is an unsecured credit card. This means you won’t have to put down a cash deposit as collateral, and you can secure a real line of credit you can actually borrow against right away.
You can also get approved for this business credit card with “average” credit, which makes it a doable option if your credit isn’t stellar. Finally, we love the fact that there’s no annual fee and that you get free employee cards for your business. You also get the chance to earn 1 percent back on all the business purchases made with your card, and you can start building your credit right away.
Best secured credit card for business
Wells Fargo Business Secured Credit Card
- Earn 1.5% cash back on your spending or 1 rewards point per $1 spent
- Earn 1,000 bonus points when your company spend is $1,000 or more in any monthly billing period
- $25 annual fee per card
- Credit line from $500 to $25,000
- Available to consumers with no credit or limited credit
Why it’s the best secured business credit card for bad credit
The Wells Fargo Business Secured Credit Card is the top secured credit card for business due to its relatively low carrying costs and the fact you can earn some rewards. This card charges a $25 annual fee for each card you carry, including up to nine additional employee cards, but you can access a line of credit between $500 and $25,000 depending on your income and other factors. This is a secured business credit card, however, meaning you’ll have to put down a cash deposit as collateral to get started.
Not only will your credit payments with this card be reported to your personal credit reports, but Wells Fargo reports your payment and usage behavior to the Small Business Financial Exchange as well. This means you’ll get the chance to build personal and business credit as you learn better credit habits and make on-time payments with your card. Also, as your credit score improves, Wells Fargo promises to periodically review your account to see if you’re eligible for an upgrade to one of their unsecured business credit cards.
Best secured credit card with rewards
BBVA Compass Business Secured Visa Credit Card
- Earn 3x points at office supply stores and 2x points at gas stations and restaurants
- Earn 1x points on all other purchases
- $40 annual fee (waived for the first year)
- Free employee cards
- Secure your line of credit with a savings account
Why it’s the best secured business credit card for bad credit with rewards
The BBVA Compass Business Secured Visa Credit Card made our list due to the fact there’s no annual fee the first year and it has a generous rewards program. Earning 3x points at office supply stores and 2x points at gas stations and restaurants could easily help you rack up points quickly, and you’ll also get 1x points on all other purchases you make with this card.
You’ll have to put down a minimum deposit of $500 to get started with this card, but your deposit goes into a savings account set aside on your behalf. From there, your available credit will work out to 90 percent of your savings account balance, or $450 if you put down $500 as collateral.
This card also comes with free employee cards and perks like auto rental insurance for business, purchase protection against damage or theft, extended warranties, travel accident insurance and travel and emergency assistance.
How to choose the best business credit card for bad credit
Check your credit score
When it comes to startup business credit cards for bad credit, it’s possible you’ll have to start your journey with a secured credit card. However, some business owners assume their credit is poor when it’s really just average or “okay.” With that in mind, you should check your personal credit score to see where you stand. According to myFICO.com, a “fair” credit score ranges from 580 to 669, so you could potentially qualify for an unsecured credit card with a FICO score in that range, especially if it’s on the higher end.
Compare fees and interest rates
Make sure to check for fees, including added fees for additional employee cards. Other fees to watch out for include annual fees, application fees, late fees and over-the-limit fees. Interest rates tend to be high for all credit cards for bad credit, so you should check to see about ongoing APRs as well.
Look for rewards
You should also look for and compare rewards programs, including the type of rewards you can earn and any bonus spending categories that may be available. Ideally, you’ll find a business credit card for bad credit that offers a generous flat rate of rewards or bonus categories you happen to spend a lot in for your business.
Frequently asked questions about business credit cards for bad credit
Do business credit cards for bad credit help you build your credit score?
Business credit cards for bad credit can help you build your credit score since they report your credit movements to the three credit bureaus. However, some business credit cards don’t report your payments to your personal credit reports, meaning responsible credit use with a business credit card may not directly boost your personal credit score.
How do I apply for a business credit card for bad credit?
Applying for a business credit card online is easy. All you have to do is find the best card for your needs, hit “apply now,” and provide information like your name, Social Security number, business type, business and personal income, your address and other details related to your business.
Do I really need a dedicated business credit card?
Having a dedicated business credit card can be helpful if you need to keep personal and business purchases separate. A business credit card can also help you build your business credit score, which is separate from your personal credit score.
What is a secured credit card?
A secured credit card is any card that requires a cash deposit as collateral to get started. These cards are typically geared to individuals and small business owners who have poor credit (or no credit) that prevents them from qualifying for an unsecured credit card.