Top Business Credit Cards for People With Bad Credit
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Small business entrepreneurs may find it difficult to obtain adequate business credit cards if their personal credit is not in good standing. Keeping personal and professional funds separate is often difficult, especially when the success of your firm is dependent on personal investments.
Financial setbacks, whether from unplanned spending or missed financial obligations, can result in credit troubles, which are a reality for many firms.
However, even if you have bad personal or corporate credit, it’s still possible to get a new business credit card, although there are some restrictions. These cards generally have lower credit limits, more flexible interest rates and fewer features. Some may also require money as collateral. However, using such cards can help rebuild your company’s credit and set a plan for future success.
Assessing Your Credit Status:
Creditworthiness is not a binary term; it ranges from terrible to great. While many institutions use distinct scoring scales, they generally agree. Bad credit often goes below 500, while poor credit runs from 500 to 600. Fair credit is typically between 600 and 680, followed by good, very good, and exceptional credit scores.
It is critical to understand your credit situation, as it may not be as terrible as previously assumed. Various banks and credit bureaus use different assessment techniques, and a previous financial error may not have as big an impact on your score as you think. Exploring company credit card choices is therefore a worthy undertaking, given your individual circumstances.
Recommended Business Credit Cards:
1. Capital One Spark Classic for Business:
- No annual charge, but with a high variable interest rate.
- Provides 1% cashback on all transactions, with no minimum or expiration dates.
- Offers free employee cards with individual spending limits.
2. Wells Fargo Business Secured Card:
- Requires an initial cash deposit.
- The credit limit goes from $500 to $25,000.
- Earns 1.5% cashback on all purchases, plus additional points for larger spending.
3. BBVA Compass Business Secured Visa
- The annual charge is $40, which is waived for the first year.
- Allows for the customisation of bonus point categories.
- The credit limit equals 90% of the security deposit.
4. Blue Business Plus, American Express:
- Provides a 12-month introductory 0% interest rate.
- There is no annual charge.
- Earns 2X points for the first $50,000 spend annually.
5. Chase Ink Preferred:
- Requires a significantly higher credit score.
- Provides considerable bonus points for initial spending.
- Offers free additional employee cards.
Consider a Line of Credit:
Alternatively, you can look into lines of credit. Kabbage, for example, provides credit lines of up to $250,000, with certain qualifying requirements. While Kabbage lacks rewards programs, it does give instant online access to funds, similar to a debit card, which facilitates commercial transactions.
These Cards Are Transitional:
Remember that these credit cards are not permanent solutions. Many are intended to aid with credit rebuilding. After demonstrating responsible usage over time, upgrading to cards with lower interest rates and better rewards becomes possible.
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