How to compare business credit cards for bad credit

If you've got bad personal and business credit, a prepaid or secured credit card may be your best bet.

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Unsecured business credit cards typically require you to have a good to excellent credit score of 650 or higher. However, you’re not out of luck if you have a low credit score.

Your options typically include getting a prepaid or a secured business credit card or, if you have good personal credit, you may be able to get a good unsecured business credit card – but you’ll be personally liable. This can be a risky move since your personal credit can be negatively affected and you can damage your personal finances.

How to choose the right business card for bad credit

To choose the best small business credit card for bad credit, ask yourself:

  • What type of card will work best?

While you might not be approved for many unsecured card options, most providers offer small business cards that leave you personally liable anyway – so you could use your personal credit to get a business card. Remember that you can negatively affect your personal credit score and finances if things don’t work out. A secured credit card is a good alternative, however you’ll need to provide a deposit as collateral, and these cards usually don’t offer rewards – plus not many providers offer a secured business card. A prepaid card won’t affect your credit score at all, which means you won’t be able to improve your credit score by making on-time payments and responsibly spending.

  • Should I pay an annual fee?

Secured business cards usually have some kind of monthly or annual fee, while prepaid cards often charge fees such as when you reload money onto the card. There are a few no annual fee unsecured business cards, however you may not be eligible for these with a poor credit score.

  • Do I need supplementary cards for my employees?

Some providers charge for each authorized user that you add to your account. This might not be a big deal if you run a small operation, but the costs can add up if you have a large team.

  • Are there any rewards?

If your business spends heavily in specific categories, consider a card that offers bonus rewards for those categories. Otherwise, you might get more out of a card that offers the same rewards rate on every purchase. Prepaid and secured cards don’t typically offer rewards.

  • What are the interest rates?

Consider how long you might keep a balance on your card. If you pay off your debt quickly, a high APR might not impact your business too much. But if you want to keep a balance over a long period of time, consider avoiding cards with standard APRs. If you can’t find any low interest rate business cards, consider alternative business funding options with lower interest rates such as business loans, lines of credit and start-up funding options.

Compare small business credit cards

Bottom line

It can be tricky getting a business card if you have bad credit. However, you could potentially turn to a prepaid or a secured card, or consider other business funding options such as loans, lines of credit and startup funding. Before applying for any form of credit, check your business credit score (if you have one) to determine the products that you may be eligible for.

If you already do your everyday business banking with a provider or bank and they are familiar with your financial situation, you may be able to talk to them about applying for an unsecured business card. Even with bad credit, they may be willing to work out a solution.

You can compare other business credit card products in our guide here.

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