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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.
|Card Name||Annual Fee|
|Wells Fargo Business Secured Credit Card||$25|
|BBVA Compass Business Secured Visa Credit Card||$40 (waived first year)|
|Business Edition Secured Visa Card||$39|
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. If you have good credit, you can likely get an unsecured business credit card instead.
Banks design business credit cards to provide business owners with a credit line. A secured card requires a security deposit when you’re approved. This deposit is usually placed in a savings account, where it remains while the account is open. Usually, the credit limit is equal to the amount of the deposit, or slightly less. This deposit reduces a financial institution’s risk when lending to people with limited or bad credit history.
Secured cards don’t usually come with the best rates and rewards, but provide a starting point for getting an unsecured credit card. Any secured card is a bad choice for balance transfers.
As long as you use the card responsibly you should be able to qualify for unsecured business cards with better rewards and benefits in the future. Some banks will convert your account to an unsecured card once you’ve shown them you’re responsible. 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 for business spending. You can multiply these 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 credit bureaus can be tricky. Reporting varies depending on the issuer.
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, ask the issuer before you apply. For example, Capital One business credit cards report to business credit bureaus.
Many business credit cards only report negative items on your personal credit reports when you apply with a personal guarantee. Regular account activity does not show up on your personal credit reports. They 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.
Building business credit 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.
Currently, there aren’t many major issuers that offer secured business cards. We put together a list of all the cards we could find so you can decide if any of these cards are the right option for you:
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