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Business credit cards without a personal guarantee
Ensure your personal assets remain secure while still getting your business the credit it needs.
None of the major credit card issuers offer business credit cards with no personal guarantee. After all, no one wants to issue a credit card and then get stuck with the debt if the business fails.
Despite that, you can still find no-personal-guarantee business credit cards. And if these cards seem too limiting for your needs, you can also consider prepaid cards or a card from an issuer that doesn’t report your activity to the credit bureaus.
Best business credit cards with no personal guarantee
|Sam's Club® Business Mastercard®||A no-annual-fee credit card with high cash back on gas, dining and travel.||Read review|
|Bremer Bank Visa® Secured Card||A card with a rewards program that’s designed for medium to large businesses.||Read review|
|Shell Small Business Card||A no-annual-fee card to use at Shell gas stations.||Read review|
|SuperAmerica Fleet Card||A card for those who often make purchases with SuperAmerica.|
|Brinks Business||Prepaid card.|
What is a personal guarantee?
A personal guarantee is a legal promise made by a business owner or an organization to accept the responsibility to repay the credit issued to their business in case it fails to pay its debt.
For a small corporation or a limited liability company that doesn’t have a credit history, the manager or stockholders typically personally guarantee they’ll pay the debt in case the company goes bankrupt.
Why would I want a card without a personal guarantee?
When you apply for a business credit card, your card provider will require a personal guarantee. This means that if your business fails, you will personally have to pay for your business credit card debt.
A card without a personal guarantee won’t hold you personally liable for business credit card debt.
How can I get a card without a personal guarantee?
If you’ve been a long-time customer with your bank, you may be able to negotiate a card without a personal guarantee. Your chances are improved significantly if you have an excellent payment history, great business financials and low debt. Some banks may waive the personal guarantee after you’ve had the card for a few years or if you’ve built up your business credit.
- Meet the requirements
Another way is to meet the bank’s size and revenue requirements. Often times you can get past the personal guarantee if your business has an annual revenue of $1 million or more and up to 10 employees. Such cards include the Sam’s Club® Mastercard® and Shell Small Business Card. However, with some cards, you’re limited to using them only on the service or products offered by the card issuer.
Options for business credit cards without a personal guarantee
If you don’t want to get a business credit card with a personal guarantee, your choices are narrowed to corporate gas cards, prepaid business cards and cards that don’t report to the personal credit bureaus.
- Gas cards.
Currently, there are two business credit cards you can use at Shell gas stations and SuperAmerica: the Shell Small Business Card and the SuperAmerica Fleet Card. The downside is your company needs to have at least three years of working history. To get the Shell Small Business Card without a personal guarantee, you need at least $1 million in annual revenue.
- Prepaid business cards.
You can get prepaid cards such as the Brinks Business, Bento Business, Netspend and PEX. These cards are easy to obtain, don’t do credit pulls and don’t report your activity to the credit bureaus. The only drawback is you need to have money available in your account to use these cards.
- A credit card that doesn’t report to the personal credit bureaus.
Business credit cards issued by Bank of America, BBVA, Citi and Wells Fargo don’t report to the personal credit bureaus, while Chase and U.S. Bank only report if the account is seriously delinquent. You’re still liable for your business finances, but your business activity won’t be reported to a credit bureau. This is the most convenient way to get a decent credit card for your business and avoid the negative effects on your personal
Can a business credit card with no personal guarantee still affect personal credit?
It depends. Business credit cards can affect your personal credit when the card issuer does a hard pull on your credit, when it reports your card activity to credit bureaus and if you default on your payments.
Business credit cards with no personal guarantee often don’t report to personal credit, and since you’re not personally liable for the debt — they won’t report to personal credit even if you default on your payments. The only way it can affect your personal credit is if a card issuer does a hard pull when you apply for the card.
Compare business credit cards
If you can’t get a business credit card without personal guarantee, your only credit card option would be a standard small business credit card.
3 tips for using your business credit card
Follow these tips to limit the impact your business credit card has on your personal credit score:
- Always pay in full. Try not to carry your balance from month to month. That way, you’ll have less pressure and you won’t be held liable for unpaid balances.
- Limit authorized users. Since you’re liable for your business account, make sure to set up spending limits for your employees and authorized users so you don’t get stuck with a higher balance than you can pay.
- Get cards with intro APR periods. If you have to carry your balance, try to get a card with a 0% intro APR period and use it to make purchases for your business and carry your balance interest free while the intro period lasts.
It’s difficult to find the perfect business credit card without a personal guarantee. In many cases, you’ll have to meet certain criteria and are often limited to using the card on the issuer’s products or services.
Luckily, there are a couple of workarounds. You can get prepaid business cards that have zero impact on your personal credit, or you can get business cards from a bank that doesn’t report your activity to the personal credit bureaus.
Compare business cards to find one that’s right for you.
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