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How To Get a Business Credit Card with Bad Credit?

Small Business Credit Score

How To Get a Business Credit Card with Bad Credit?

Starting a business means taking risks, making changes, and building it from the ground. 

Business credit cards offer small business owners access to a flexible line of credit with a safe way to pay for business expenses and there may be cash rewards and other benefits. However, if your credit scores aren’t high it is difficult for you to qualify. 

A business credit card will not fix your personal credit. Most business credit card issuers don’t report positive behavior to consumer credit bureaus. If poor credit is holding your business back, then start rebuilding your score. If you rebuild your score you can qualify for better options in the future. (Find a way to incorporate this paragraph at the beginning, I think it’s much better here). Now let us discuss the business credit cards for bad credit.

Secured Business Credit Cards

Secured credit cards will not provide the rewards of the best small business credit cards, but they can offer access to financing, help to establish business credit. The secured cards also keep your business and personal spending separate.

A secured card requires a cash deposit to be held as a security deposit, meaning you’ll receive the amount when you close the account. This is a way for credit card companies to reduce their risk of a bad credit borrower. Secured cards allow the creditors to charge up to the amount of their security deposit. Some deposits will let your balance exceed your credit limit if you manage it well.

How To Apply for a Business Credit Card With Bad Credit?

You can get your credit card online. Most issuers make it simple to get it and make it as fast as possible. You will need the following information while getting it:

A few issuers will need you to have a formal business entity to apply for most business credit cards. The cards are also available to sole proprietors and independent contractors.

If you get rejected for a card you want, you may reach out to the card issuer. Some will have a reconsideration department that will review your application if there are other factors that may help you qualify.

The most important thing to remember is when you apply, look for cards that you’re most likely to qualify for.

Applying for various cards in a short period of time can result in several credit inquiries on your report. These can impact your credit scores, so apply for cards that you’re more likely to get.

As a new cardholder, you may get a large sign-up bonus or a period of time where you don’t pay any interest on revolving balances. Many have enticing benefits like purchase protection and travel perks, and allow you to earn cash, points, and miles as you charge. 

Some credit card issuers have developed business cards for bad credit to meet the wide span of potential cardholders.  Startup business credit cards for bad credit can help you manage your company’s costs while building credit scores.

Is a Business Credit Card with a Bad Credit Right for You?

As a business owner, a designated business credit card is a smart idea even if your credit is not in the good range. 

You don’t have to use the cash you have on hand. 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. You need to send all the payments on time, and pay the bill by the due date. You need to maintain a low balance compared to your credit limit. As a result, you will prove that you are capable of handling business credit cards and as your credit scores rise, you’ll be eligible for a greater variety of credit products.

Choosing the Right Business Credit Card with Bad Credit

When searching for a business credit card, people with no credit history, or a problematic one, consider the following:

What Kind of Credit History and Credit Score Do You Have?

Get your consumer credit reports from the credit bureaus of TransUnion, Equifax, and Experian. Your credit files should be free from errors, but if they’re not, dispute all inaccuracies, and access your credit scores. 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. They are based on your financial circumstances, with a strong emphasis on your credit history. 

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. 

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 Annual Percentage Rate (APR) you can get will be important.

Key Takeaway

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.

Even a single well-managed business credit card can help in boosting your credit scores. Keep track of your progress and consider adding more beneficial business cards.

Frequently Asked Questions

What do I need to qualify for a business credit card? 

If your credit scores are better, then it will be easier to qualify for a business credit card. You may have to increase your credit scores before applying and you can do that by reducing the debt to credit ratio and clearing all credit account payments.

Are there business cards that don’t require a personal credit check?

A credit card check is required for business credit cards, but that’s not the case for personal credit cards. Although these cards aren’t developed specifically for small businesses, you can use them to start or repair the credit history.

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