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A business credit card gives you the convenience of a credit card for business expenses. This can keep your small business transactions separate from personal spending.
If a bank denies your business credit card application, a secured business card is another option.
There currently aren’t many major issuers that offer secured business cards, but our favorites are:
Many business credit cards require a personal guarantee or personal credit check. This may happen even when you use your company’s EIN on the application instead of your Social Security number. Your business has to build its own credit, separate from your personal credit, to be able to get a credit card on its own.
If you have fair or bad personal credit, you may not be able to get approved for an unsecured business credit card. With bad credit, a secured business credit card might be your only option (check out our top business credit cards for bad credit).
Banks design business credit cards to provide business owners with a credit line. A secured card requires a security deposit when you’re approved. Usually, the credit limit is equal to the amount of the deposit. This deposit reduces a financial institution’s risk when lending to people with limited or bad credit history.
As long as you use the card responsibly you should be able to qualify for unsecured business cards with better rewards and perks in the future. Some banks will convert your account to an unsecured card once you’ve developed a record of responsible use, which typically includes consistent on-time payments and properly managed balance. Depending on whether you’ve built credit for your business, you may even be able to get a card without a personal guarantee. Many unsecured business credit cards earn rewards points, miles, or cash back for business spending. You can multiply these business rewards by adding employee cards.
Confused about how business or secured cards work? Take a few minutes to learn more:
The way business credit cards report to the major credit bureaus can be tricky. Reporting varies depending on the issuer, and building business credit is a bit different than building personal credit.
To see a complete listing, take a look at our table showing how issuers report business card activity to the credit bureaus, including business credit bureaus.
For example, Chase business cards report positive activity to several business credit bureaus, including Dun & Bradstreet and Equifax Business, but not the regular consumer credit bureaus. But negative activity will be reported to the consumer credit bureaus as well.
Personal credit reports are different from business credit reports. If you have a business card, your business may have a credit report at one or more business credit bureaus. But not all business credit cards report to business credit bureaus.
To find out if a business credit card reports to business credit bureaus, see our table (linked above) or ask the issuer before you apply.
Many business credit cards only report negative items on your personal credit reports. Regular account activity may not show up on your personal credit reports. In those cases, the card will not help you build personal credit. If you miss a payment on your business card, though, that negative item will likely show up on your personal credit reports.
There aren’t many secured business cards out there. Our top card picks come from:
But, you can also use personal secured credit cards for business expenses, if necessary. See the best secured credit cards right here.
Building your business credit scores is a different process than building personal credit. It’s not as simple or straightforward. Learn more about building credit for your business with this guide.
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