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 the best credit cards for bad credit and how to get a business credit card with bad personal credit.
What Is Considered Bad Credit?
A bad credit score depends on which scoring system you’re using, usually FICO Score or VantageScore. 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 to Good Credit
There may be credit card options available to you even if you have poor credit. Here are some of the top picks for credit cards for small businesses with bad credit.
Theis a popular card for those with fair or good credit.
- annual fee.
- Interest rate of .
Themay be a good fit for businesses that want to build credit.
Theis a great option if you have limited credit history.
- No interest charged.
- annual fee
- Rewards offered:
- No welcome offer
- Foreign transaction fee of
Thecould work well if you want to avoid paying interest on your credit card and don’t travel much for business. You’ll pay more to use the card overseas because of the foreign transaction fee.
Secured Business Credit Cards
A secured business credit card is another option when you’re looking for a business credit card for bad credit. Qualifying for a secured card is usually easier than for an unsecured credit card. 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-cost business secured credit card built to help establish and grow business credit.
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’s 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
It can also be a good idea to look into personal cards as well as business cards. Personal secured cards can help you build credit over time and can be easier to qualify for.
Citi Secured Mastercard Credit Card
While the focus here is on business credit cards, a personal secured credit card may help you build credit if used properly.
- On-time payments can help build credit.
- Access to your free FICO score online.
- No rewards or intro offer.
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.
*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.
- On-time payments can help build credit.
- Earn rewards on purchases.
- Get a cash back match at the end of the first year.
- No annual fee.
- High interest rates.
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.
How Do I Establish Business Credit?
Knowing how to establish business credit is essential as a small business owner. 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 Prime, which comes with an important feature called tradeline reporting. With tradeline reporting, Nav sends positive payment information to the major credit bureaus that track businesses. Plus, you get a second tradeline by using your Nav Prime Card. Your account may help build your business credit with important 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. Before applying for any more of the best credit cards for poor credit, it’s typically a good idea to wait around six months 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.
Legal Aspects to Consider When Applying for Business Credit Cards
When applying for a business credit card, you’ll want to look at more than rewards points and employee cards. There are several legal aspects to also consider to protect your business and make sure you remain compliant.
Here are some key legal considerations:
- Type of business entity: The legal structure of your business, whether it’s a sole proprietorship, partnership, corporation, or LLC, can impact the way credit is issued and the extent of your liability. Understand how your chosen entity type affects the credit card application and your personal liability as a business owner.
- Personal guarantee: In many cases — especially for small businesses or startups — credit card issuers may require a personal guarantee from the business owner(s). This means that if the business can’t repay its debt, the business owner(s) will be personally responsible for the outstanding balance. Carefully consider the implications of providing a personal guarantee.
- Disclosures and terms: Pay close attention to all disclosures and terms presented during the application process. These documents contain important information about interest rates, fees, grace periods, and other key aspects of the credit card agreement. By applying for the card, you are legally agreeing to these terms.
- Truthful information: When completing the application, ensure that all information provided is accurate and truthful. Misrepresentation or providing false information can lead to legal consequences and possible denial of credit.
- Age requirements: Some business credit cards have age restrictions, typically requiring the business owner to be of legal age to enter into a contract. Verify the age requirements to ensure eligibility.
- Dispute resolution and arbitration: Review the dispute resolution and arbitration clauses in the credit card agreement. These clauses may impact your ability to take legal action in case of a dispute with the credit card issuer.
It’s a good idea to consult with a legal professional or a financial advisor before applying for a business credit card, especially if you have specific concerns or unique circumstances regarding your business.
Understanding the Terms and Conditions of Business Credit Cards
You often see the phrase “terms apply” with credit cards, but it might not be clear exactly what that means. Business credit cards have terms and conditions that may vary among different credit card issuers — and can be different from personal credit cards. It’s a good idea to read and understand them before applying for or using a bad credit business credit card.
Here are some key terms and conditions to look out for:
- Grace period: The grace period is the time between the purchase date and when interest starts accruing on the balance. If you pay your balance in full before the grace period ends, you won’t rack up interest charges.
- Billing cycle: Know the billing cycle and the due date for your payments. Timely payments are crucial to maintaining a positive credit history and avoiding late fees.
- Interest rates: Business credit cards come with one annual percentage rate (APR) for purchases (and another APR for cash advances). The APR represents the interest you’ll be charged if you carry a balance on your card after the grace period. Some cards may have a low intro rate that increases after a specific period.
- Fees: There are various fees associated with business credit cards, like an annual fee, late payment fee, over-limit fee, cash advance fee, foreign transaction fee, and more. Make sure you’re aware of these charges and consider their impact on your business finances.
- Credit limit: The credit limit is the maximum amount you can charge on your business credit card. Going over this limit may result in penalties, fees, and even a negative impact on your credit score.
- Rewards and benefits: Some business credit cards offer rewards, such as cash back, travel points, or discounts on certain purchases. Understand the rewards program and any restrictions that may apply.
- Liability and guarantees: Clarify whether the business credit card needs a personal guarantee or if the liability is limited to the business entity only. You’ll also want to check the fraud liability policy.
- Credit reporting: Check if the credit card issuer reports your card activity to business credit bureaus. Reporting can help increase your business credit score.
- Authorized users: Understand the process for adding authorized users to your business credit card account and the responsibilities associated with it.
- Balance transfer policy: If you plan to transfer balances from other credit cards, review the terms for balance transfers, including any applicable balance transfer fees and promotional rates.
- Fraud protection: Familiarize yourself with the issuer’s fraud protection policies and procedures to safeguard your business against unauthorized transactions.
- Termination and changes: Be aware of the conditions under which the credit card issuer can terminate your account or change the terms of the agreement.
Always read the fine print and ask the credit card issuer for clarification if any terms are unclear. Additionally, consider comparing multiple business credit card offers to find the one that best suits your company’s needs and financial situation.
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.
This article was originally written on May 10, 2018 and updated on September 18, 2023.