Business credit cards offer small business owners access to a flexible line of credit along with a convenient and safe way to pay for business expenses. Many offer cash back rewards, sign-up bonuses, and other perks. If your credit scores aren’t high you may find it more difficult to qualify — but there may still be options available to you. Here we’ll discuss how to find and qualify for small business credit cards for bad credit.
What Is Considered Bad Credit?
Credit card issuers may use credit scores created by FICO or VantageScore. The information used to calculate the credit score will come from one of the major credit bureaus such as Equifax, Experian or TransUnion. Credit card providers use one of the available scores to determine if you’re eligible, and you can ask which score the lender uses before applying.
A FICO credit score of 669 or lower is considered “fair” or bad and can make it more of a challenge to qualify for a credit card. A VantageScore of 600 or lower is considered “fair” or bad credit. It’s usually easier to qualify for a credit card when you have scores in the “good” or “excellent” range. We explore your top choices for the best business credit cards for bad credit below.
Best Credit Cards for Limited or Fair/Good Credit
If your credit scores are in the fair to good range, or if you haven’t established credit, these cards may be worth considering.
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Best Business Credit Cards for Bad Credit
The number of business credit cards available if you have bad credit is not large. However, there are some credit cards to consider if your credit scores aren’t strong. Among your options, a secured credit card will often be your best bet.
Secured Business Credit Cards
A secured business credit card is another option for business owners with bad credit. These are much easier to qualify for than unsecured credit cards. A secured card requires a cash deposit to be held as a security deposit. (Typically you’ll get it back when you close the account.) This is a way for credit card companies to minimize the risk of a high risk borrower. Secured cards usually allow borrowers to charge up to the amount of their security deposit, though some will let your balance exceed your credit limit if you manage it responsibly.
Bank of America Business Advantage Unlimited Cash Rewards Secured credit card
The Bank of America Business Advantage Unlimited Cash Rewards Secured credit card is a no annual fee business secured credit card built to help establish and grow business credit. You can earn an unlimited 1.5% cash back on all purchases while building business credit. You must deposit at least $1000 to open an account.
The Bank of America Business Advantage Secured credit card allows cardholders to secure a credit line of at least $1,000. With this card, the amount of your credit line is equal to the amount you deposit. There is no annual fee.
*All information about the Bank of America Business Advantage Unlimited Cash Rewards Secured credit card has been collected independently by Nav. This card is not currently available through Nav. To see what business credit cards are available, please visit Nav.
First National Bank Business Edition® Secured Visa Card
First National Bank offers a business secured card with a credit limit between $2,000 and $100,000, in multiples of $50. Your security deposit must be 110% of the credit limit that you want, however you will earn interest on the deposit. There is an annual fee of $39.
*All information about the First National Bank Business Edition® Secured Visa® Card credit card has been collected independently by Nav. This card is not currently available through Nav. To see what business credit cards are available, please visit the Nav Credit Card Marketplace.
Union Bank® Business Secured Visa Credit Card
Union Bank offers a secured card for small business owners with a limit of as little as $500 and as much as $25,000. It also has a low APR of 13.99%. Variable. There’s a $30 annual fee for this card.
*All information about the Union Bank® Business Secured Visa® Credit Card credit card has been collected independently by Nav. This card is not currently available through Nav. To see what business credit cards are available, please visit the Nav Credit Card Marketplace.
Wells Fargo Business Secured Credit Card
You may see references online to this credit card as it was a popular option. However, as of October 2022 it is not available.
Best Personal Secured Cards
While the focus here is on business credit cards, a personal secured credit card may help you build personal credit if used properly. Since good personal credit scores can help when it comes to qualifying for many small business cards, a personal credit card can be an important tool if you’re trying to qualify for better business cards.
With this card, there’s no security deposit so it’s not technically a secured card. Instead your credit limit is based on the money you have in your Zolve Azpire deposit account. You may apply even if you don’t have a credit history in the US. It reports to all three major US credit bureaus.
Citi Secured Mastercard Credit Card
The Citi Secured Mastercard credit card is a no annual fee credit card that can help with building credit when used responsibly. A security deposit (minimum of $200) is required. Once approved, your credit limit will be equal to your security deposit. With Citi’s Flexible Payment Due Dates, you can choose any available due date in the beginning, middle or end of the month, then manage your account 24/7 online, by phone, or in the mobile app. You also get your FICO credit score for free.
*All information about the Citi Secured Mastercard credit card has been collected independently by Nav. This card is not currently available through Nav. To see what business credit cards are available, please visit Nav.
Discover it® Secured Credit Card
The Discover it® Secured Credit Card is a personal card that also offers rewards and could work well for a business owner looking to earn on everyday spending and build credit.
The Discover it® Secured Credit Card doesn’t charge an annual fee and has a robust rewards program and an intro bonus: You can get a 2x cash back match at the end of your first year.
The rewards program offers:
- 2% cash back on restaurants and gas stations on up to $1,000 per quarter
- 1% cash back on every other purchase
Pay as little as $200 on the deposit to open this secured card.
*All information about the Discover it® Secured Credit Card has been collected independently by Nav. This card is not currently available through Nav. To see what business credit cards are available, please visit Nav.
Do Business Credit Cards Check Personal Credit Scores?
Yes. Even though you use business credit cards for business purposes, most financial institutions look at your personal credit score to determine if you qualify. This often results in a hard inquiry, which shows up on your personal credit report and may temporarily lower your credit score by a few points.
In addition to establishing personal credit scores, you can also establish business credit scores. This score represents your business as a separate entity and its ability to repay what it owes. We discuss how to establish business credit next.
Most business credit cards do not report activity on your business credit card to consumer credit bureaus but a few do. Here’s how some of the major business credit cards affect your personal credit.
How Do I Establish Business Credit?
Although you likely don’t need an established business credit score to get a small business credit card, having business credit can help your business succeed in many ways. For example, a good business credit score can open business funding opportunities that you couldn’t have accessed without it. It may also allow you to get more agreeable payment terms with your suppliers and vendors, which can make payments less of a hassle for your business. Additionally, if your goal is to work with a Fortune 500 company or a government agency, these institutions will check your business credit to make sure you’re a legitimate business before signing on the dotted line.
The easiest way to establish business credit is to use Nav and choose Business Boost, which comes with an important feature called tradeline reporting. With tradeline reporting, Nav send positive payment information to the major credit bureaus that track businesses. This may help build your business credit with the different bureaus. And because life happens, Nav never sends negative information like late or missed payments.
Many business credit card accounts also report to business credit bureaus, but this feature is not universal. So it’s not guaranteed that using a business credit card will automatically establish business credit. If possible, choose a credit card that will report to the major business credit bureaus.
Find a list of vendors that offer tradeline reporting for their customers here.
What If I’m Not Approved for a Business Credit Card?
If you get denied for an unsecured business credit card, you still have options. It’s typically a good idea to wait around six month before applying for a new credit card to make sure your credit score doesn’t take too many hits from the hard inquiries. In the meantime, you can take steps to build up your credit score. And when you’re ready to apply again, you can look into a different credit card that accepts applicants with your credit score range. Or you can apply for a secured business credit card that allows you to put down a refundable security deposit, and the deposit acts as your credit limit. Secured cards are typically easier to qualify for than unsecured credit cards.
Don’t waste time scrolling through countless credit cards. Instead, find the best credit card options for your business instantly with Nav.
Alternatives to Business Credit Cards for Bad Credit
If you get a business credit card, try to use it for business purchases so you can separate your business and personal finances. This will make it easier to keep track of your business spending for tax purposes.
Many traditional small business loans (such as bank loans or SBA loans) require good credit, but there are some types of business financing that may be more credit flexible or may not check personal credit at all. Lenders that make business loans for bad credit tend to be heavily focused on other factors such as revenues or time in business. They include:
- Vendor accounts
- Online loans
- Business cash advances
For the above types of financing, revenues may be more important than credit history. A business bank account may be required so make sure you open and use one as soon as possible.
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