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With business credit cards, you can charge your company’s expenses while ensuring those costs remain separate from your personal expenses. High credit scores are usually required to qualify for business credit cards with the richest benefits, but getting a business card with bad credit is also possible.
A FICO score starting at 670 is typically considered good, but depending on the card, acceptable credit scores can be below that score. However, these cards largely fall under the secured credit card category, which involves putting down a security deposit.
Whichever card you get, business credit cards for poor credit can help you manage your company’s costs while building a better credit score that can open up more credit options in the future.
Comparing the best business cards for bad credit
| Card name | Annual fee | Credit score requirements | Credit limit | Ongoing APR |
|---|---|---|---|---|
|
Capital One Spark Classic for Business |
$0 |
FICO score between 580 and 740 | $500 minimum |
30.74% (Variable) |
| First National Bank of Omaha Business Edition Secured Mastercard Credit Card | $39 | FICO score between 300 to 579 | $2,000 to $100,000 | 25.99 percent (variable) |
|
OpenSky® Secured Visa® Credit Card |
$35 |
No credit history | Up to $3,000 |
25.64% (variable) |
Top business cards for bad credit
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The Capital One Spark 1% Classic* has no annual fee and does not charge any foreign transaction fees. You will earn a flat 1 percent cash back on every purchase you make with the card, along with 5 percent cash back on hotels and rental cars booked through Capital One Travel. Other benefits include free employee cards, year-end summaries, virtual card numbers and roadside assistance.
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Pros
- With responsible card use, you can earn rewards with this card that can potentially help you save on future purchases.
- No annual fee means it won’t cut into your rewards.
- You can receive alerts for all employee cards, such as when an employee goes over their limit.
Cons
- With a high APR, keeping a balance on this card might prove costly.
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You can request your own credit limit with the First National Bank of Omaha’s Business Edition® Secured Mastercard® Credit Card*, making it an ideal pick for business owners who need a decent chunk of credit. You can access a credit limit between $2,000 and $100,000 when you apply, subject to credit approval. However, you must make a security deposit that’s 110 percent of the credit limit you want.
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Pros
- The potential for a high credit limit could mean you can keep your credit utilization ratio low, a factor in your credit score.
- While this card lacks rewards, you have access to automatic rebates through Mastercard Easy Savings.
- You can earn interest on your security deposit, a rare feature for secured cards.
Cons
- Your purchases won’t earn any rewards.
- With no welcome offer, this card has little first-year value.
- While low, this card comes with an annual fee that can’t be offset with perks or rewards.
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The OpenSky® Secured Visa® Credit Card is a solid option for business owners who may be held back from financing their business due to bad personal credit. No credit check is required, which takes a tremendous amount of pressure away from individuals recovering from bankruptcy. Instead, you’ll pay a security deposit between $200 and $3,000. Your credit limit is set based on how much you deposit into the account.
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Pros
- This card has a relatively low APR compared to rival cards.
- No credit check required means this card is highly accessible.
Cons
- You won’t earn rewards with this card, so there’s no added benefits to purchases.
- The annual fee will cut into your credit line.
How to choose the right business card for bad credit
When searching for a small-business credit card for bad credit, or no credit history, consider the following:
Your credit score and history
Don’t choose cards that require a credit score that’s higher than yours
Pull your consumer credit reports from TransUnion, Equifax and Experian, available for free once a year at AnnualCreditReport.com. Your credit files should be free of errors. If they’re not, dispute all inaccuracies. Then, access your credit score to see where you stand. With this information, you can focus on the credit products that are in your credit scoring range.
The better your credit score is, the easier it will be to qualify for a business credit card. Therefore, you may want to increase your score before applying. You can do this by sending all existing credit account payments on time and reducing your credit utilization ratio (owing less than 30 percent of what you can borrow is ideal).
Security deposits or annual fees
Choose cards that require deposits instead of annual fees
Unsecured credit cards are more challenging to qualify for — and more costly — when your credit score is low. This is because they are based entirely on your financial circumstances, with a strong emphasis on your credit history and score. Secured credit cards are easier to qualify for because the credit card issuer can claim the funds held as collateral if you fall behind in your payments, and they typically don’t charge annual fees. Therefore, if you can’t qualify for an unsecured card but can set cash aside, a secured card can make a lot of sense.
Minimum qualifications, rates and fees
Consider ongoing fees
Review the qualifications and terms of the business credit cards you’re considering, and compare the interest rates and fees associated with each card. If you plan on revolving balances, it is important to choose a card with a lower variable APR.
Business rewards and benefits
Review cardholder perks, benefits and rewards
Most credit cards designed for people with bad credit are slim on benefits, though some offer rewards programs and other perks. Learn what the benefits are for each card, and identify the card that best meets your needs and lifestyle.
Frequently asked questions
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Securing a business credit card with a 500 credit score can be tough since most require higher scores. Consider secured credit cards or those designed for lower credit scores, but be aware they may have restrictions or higher fees. However, using a secured card or a business card for bad credit responsibly can increase your chances of qualifying for better cards later on.
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Using a business credit card responsibly can help you build a strong business credit score, as most small-business cards report to business credit bureaus. Your business credit card issuer may also report card activity to consumer credit bureaus, so your personal credit score could be impacted by your business card.
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The highest credit limit on a business credit card depends on factors like the business’s creditworthiness and financial health. Some cards offer high limits or no preset spending limits, but it’s important to review the card’s terms and your business’s finances to gauge your potential limit.
The bottom line
A business credit card can benefit business owners by providing a separate means for managing expenses and building credit. By carefully considering your credit score, security deposits or annual fees, qualifications and rates, and rewards and benefits, you can choose the right business credit card for your needs. Remember to use your card responsibly and make timely payments in order to improve your business credit score and open more credit opportunities in the future. Don’t let bad credit hold you back from utilizing the advantages of a business credit card. Keep track of your progress and consider adding more business cards as your credit portfolio grows.
*The information about the Capital One Spark 1% Classic and First National Bank of Omaha Business Edition® Secured Mastercard® Credit Card has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.
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