Compare small business credit cards for fair credit

Taking steps to move your business forward, such as getting a business credit card, can be exciting. And even if you have fair credit, you can find a card that works for you. Check out our recommendation for the best fair-credit business card, and consider other types of business funding.

Compare business cards for fair credit

Quick look at small business credit cards for fair credit

• Best business credit card for fair credit: Capital One® Spark® Classic for Business
• Best secured credit card with flat-rate rewards: Wells Fargo Business Secured Credit Card
• Best secured credit card with tiered rewards: BBVA Secured Visa® Business Credit Card
• Best charge card with no personal guarantee: Brex for Startups
• Best charge card with no personal guarantee: Brex for Startups
• Best for improving personal credit score with potentially low deposit: Capital One® Secured Mastercard®

Best business credit cards for fair credit

It’s not easy getting a business card with fair credit. However, you’re not out of luck. Capital One offers a good option, and you might qualify for secured business cards. You can also consider alternative business funding.

Best business credit card for fair credit: Capital One® Spark® Classic for Business

• Get this card if: You have fair credit and want an unsecured business card.

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Providers prefer customers with good to excellent credit scores. That said, you may have difficulty getting a business card if your credit is average.

The Capital One® Spark® Classic for Business might offer an opportunity. It’s an unusual product because it’s an unsecured business card specifically aimed at business owners with average credit. Typically, you may have trouble getting approved for an unsecured card with a FICO score below 630.

• Other reasons to get the card: Not only will you pay a $0 annual fee, but you’ll also earn unlimited 1% cash back on all purchases. While these aren’t spectacular rewards, they’re a good deal for a fair-credit card.

• What to watch out for: The card’s main drawback is its 26.99% variable APR. That’s a very high interest rate, so strongly consider paying off your balance in full each month.

Best secured credit card with flat-rate rewards: Wells Fargo Business Secured Credit Card

• Get this card if: You want a secured credit card with an option to earn cash back or points.

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The Wells Fargo Business Secured Credit Card lets you choose between two reward structures. You can earn 1.5% cash back on net purchases. Or, you can earn 1x points on net purchases and receive 1,000 bonus points each billing period your company spends at least $1,000. For the second option, you’ll also get a 10% point credit when redeeming points online.

• Other reasons to get the card: You can get a credit line up to $25,000 with the requisite deposit. There are no foreign transaction fees, so the card can be helpful on international business trips. And compared to other secured products, the card offers a reasonable purchase APR: 15.15% variable.

• What to watch out for: The card has a $25 annual fee. That’s lower than you’ll find with other secured business cards, but it can still be a pesky cost you’d rather not pay. And if you choose the cashback option, you’ll receive your rewards quarterly — that is, in March, June, September and December.

Best secured credit card with tiered rewards: BBVA Secured Visa® Business Credit Card

• Get this card if: You want a secured credit card with good rewards at office supply stores, restaurants and gas stations.

The BBVA Secured Visa® Business Credit Card offers 3x points at office supply stores and 2x points at restaurants and gas stations, which are especially strong rewards for a secured card. It offers 1x points on other purchases. Furthermore, you can get discounts at select merchants by enrolling your card in Visa SavingsEdge.

• Other reasons to get the card: The card has no annual fee for the first year, then an ongoing $40 annual fee. Adding employee cards to your account is free, unlike with the Wells Fargo Business Secured Credit Card. And the card has a 16.24% variable purchase and balance transfer APR, which is reasonable for a secured product.

• What to watch out for: You’ll pay a $40 annual fee starting your second card year. Your available credit will be only 90% of your deposit. And you can apply for this card only if you’re in Alabama, Florida, Texas, Arizona, Colorado, California or New Mexico.

Best charge card with no personal guarantee: Brex for Startups

• Get this card if: Your business has the liquidity to pay your balance in full each month, and you don’t want to provide a personal guarantee.

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Applying for the Brex for Startups doesn’t affect your credit score. And it doesn’t require a personal guarantee as most business cards do. If you make it your exclusive corporate card, you’ll earn 7x points on rideshare services, 4x points through Brex Travel, 3x points on restaurants, 2x points on recurring software and 1x points on all other purchases.

• Other reasons to get the card: There’s no annual fee. You’ll get access to Brex partner offers, which offer discounts and credits at select business merchants. And if you’re approved, you can start using your card through a virtual card right away.

• What to watch out for: Unlike the other cards on this list, the Brex for Startups is a charge card. This means you must pay off your balance in full after each billing period, which could put a crimp on your cash flow.

Best line of credit for business owners with fair credit: The Kabbage Card

• Get this card if: You want a line of credit, and your business has been in operation for at least a year while meeting Kabbage’s minimum revenue requirements.

The The Kabbage Card isn’t a credit card. Rather, it’s a card that lets you draw from a line of credit. If you’re having trouble getting approved for other products on this list — for which you’ll have a better chance of approval with at least a fair credit score — the The Kabbage Card may offer better chances. The company reportedly accepts applicants with credit scores as low as the 500s, although approval is never guaranteed.

• Other reasons to get the card: There’s no annual fee, and according to Kabbage, your credit won’t be affected. If you’re approved, you can access funds from your line of credit immediately.

• What to watch out for: You can apply only if your business has been in operation for at least a year. It must show annual revenues of at least $50,000 or $4,200 a month over the last three months. Kabbage charges a monthly fee of 1.5% to 10% that’s higher during the first portion of your loan term and lower during the latter portion. Depending on when you decide to pay off your loan and what your rate is, your effective APR could be reasonable — somewhere under 20% — or it could easily shoot past 100%.

Best for improving personal credit score with potentially low deposit: Capital One® Secured Mastercard®

• Get this card if: You want to work on your personal credit score, and you want the chance to submit a low deposit.

The Capital One® Secured Mastercard® isn’t a business product, but it’s one of the best secured cards for personal use. It can be a good pick if you want to steadily improve your credit score before applying for a business card. And it differentiates itself with its security-deposit promotion: You can get a $200 credit line with a $49, $99 or $200 deposit depending on your creditworthiness.

• Other reasons to get the card: You’ll pay no annual fee or balance transfer fees. You can also get a higher credit line with no additional deposit after making your first five monthly payments on time.

• What to watch out for: The card comes with a very high 26.99% variable APR on all balances.

What should I do if I’m having trouble getting approved for business credit cards?

If you’re running into denials and you need immediate funding, consider a small business loan. There will likely be business-specific requirements to get one, but some providers won’t disqualify you because of your personal credit.

How we chose our best business credit cards for fair credit

We evaluated business credit cards targeted to business owners with fair credit, singling out the products with standout features such as rewards or lenient approval requirements.

What’s changed in 2020

This list has held relatively steady for 2020. The Capital One® Spark® Classic for Business continues to be a strong — and uncommon — choice for an unsecured business credit card that’s available to applicants with less-than-perfect credit.

How to improve your credit

You’ll likely have your pick of business credit cards if your credit score is good. The application process could be frustrating, however, if you don’t have the best score.

One way to get around this problem is to apply with a card provider that doesn’t check your credit. The OpenSky® Secured Visa® Credit Card is a good option. If you’re approved, simply make card payments on time and keep your credit utilization low. In time, you can see a steady improvement in your credit score.

Another method is to take out a credit-builder loan. A bank will deposit a small amount of funds into a savings account — typically $500 to $1,500 — that you can access only once you’ve paid off the entire loan. Because your payments are reported to the credit bureaus, you’ll see an uptick in your credit score if you keep up with your loan.

How to build business credit

It’s also a good idea to build your business credit, which can help you get approved for financing more easily and negotiate better terms with vendors.

To start building business credit, establish tradelines with vendors and suppliers. Also, borrow from lenders that report your payment history to credit bureaus. With consistency, you’ll eventually build strong business credit.

How to compare business credit cards for fair credit

• Credit limit. Some business owners have reported getting low credit limits for fair-credit business cards. Providers try to limit their risk, and setting low limits is one way they do so. Anticipate how much your business might spend in the near future and consider whether a business card will help you with all of your expenses.
• Annual fee. When finances are tight, you might not want to pay an annual fee. Consider how much a card costs before applying.
• APR. Fair-credit business cards often have very high interest rates because providers want to make sure they’re getting a return on their risk. Check a card’s APR before making a balance transfer or maintaining balances long term.
• Other options. Don’t settle on a fair-credit business card just because you think there are no other options. Compare the top non-bank loans before applying to make sure you’re getting the best option.
• Security deposit. If you’re applying for a secured credit card, consider the deposit you’ll have to submit in order to open an account. If applicable, consider the maximum deposit allowed.

Bottom line

It’s more difficult to get a business credit card if you have average credit. However, there’s a card that may fit: the Capital One® Spark® Classic for Business. If you’re not sure that’s right for you, check other business financing options before applying.

Frequently asked questions

• Am I personally liable for debt I’ve accrued with a business credit card?

  With most providers, the answer is yes. To stay on the safe side, it’s often best to spend only as much as you can personally pay off.

• Why is Capital One willing to accept business owners with average credit?

  Capital One may have decided it’s worth the risk to approve fair-credit business owners. The company may believe it’s profitable or a good way to acquire new customers.

• Why do credit cards for fair credit tend to have higher APRs?

  Providers typically offer attractive interest rates to cardholders with good or excellent credit. That’s because these customers are generally seen as less likely to default on their debt. A consumer with average credit is assigned a higher likelihood of default, so providers charge higher interest rates to account for the risk.