Let's face it, not every business owner has a perfect credit score. Building up a credit score takes time, and sometimes life can throw obstacles in our way that may result in less-than-stellar credit. But don't worry, having fair credit doesn't automatically disqualify you from obtaining a business credit card! In this informative Flik Eco guide, we'll help you understand credit cards for businesses with fair credit and share some great options to consider.
Credit Cards For Business With Fair Credit Table of Contents
What is Fair Credit?
Fair credit typically refers to a credit score range of 580-669. Just for reference, here's how credit score ranges are usually classified:
- Excellent: 720 and above
- Good: 670-719
- Fair: 580-669
- Poor: 579 and below
Having a fair credit score means that you're in the middle of the spectrum, and while not ideal, it's still possible to find business credit cards that cater to this credit range.
Why are Business Credit Cards Important?
Even with fair credit, business credit cards can provide significant benefits, including:
- Separation of finances: Having a dedicated business credit card allows you to keep your personal and business expenses separate, which is essential for accurate bookkeeping and tax filing.
- Building business credit: Making timely payments and demonstrating responsible credit utilization can improve your business credit score, leading to better financing opportunities in the future.
- Cashback and rewards: Many business credit cards offer cashback, reward points, or travel miles that can be used to offset future purchases and save your business money.
Best Credit Cards for Businesses with Fair Credit
While it may be challenging to find credit cards with generous rewards or low interest rates in this credit range, there are still viable options available. Let's explore the top business credit cards for those with fair credit:
1. Capital One® Spark® Classic for Business
Capital One offers a solid business card for those with a fair credit score. The Spark Classic comes with a few noteworthy perks, such as:
- 1% cashback on every purchase made using the card
- No annual fee
- Additional employee cards at no extra cost
It's important to note that this card carries a relatively high APR, so it's best suited for businesses able to pay off their balance monthly.
2. Wells Fargo Business Secured Credit Card
A secured business credit card requires a security deposit, which can alleviate some of the risks typically associated with lending to businesses with fair credit. Wells Fargo offers a competitive option with this feature:
- 1.5% cashback on every purchase or 1x rewards points
- $25 annual fee per card
- Credit lines from $500 to $25,000, depending on the security deposit
Keep in mind that since this card is secured, the credit limit will depend on the collateral provided as a security deposit.
Credit Cards For Business With Fair Credit Example:
Let's imagine a small business owner, Sarah, who has a fair credit score of 620. She runs a boutique that has been doing quite well, and she's ready to apply for her very first business credit card. After researching her options, she opts for the Capital One Spark Classic for Business. With this card, she can earn cashback on every clothing order or business expense, track her expenses easily, and further build her credit over time by paying the card balance in full each month. Soon enough, she might even qualify for a more rewarding business credit card by demonstrating responsible credit habits.
Understanding the options available to you and choosing the appropriate business credit card for your fair credit score is an important step in managing your finances, building credit, and leveraging rewards to grow your business. We hope this guide has provided valuable insights and resources to navigate this aspect of your business journey. Remember, don't let fair credit hold you back—smart financial management is just a card swipe away.
If you found this article helpful, be sure to share it with your fellow entrepreneurs and explore our other Flik Eco guides for more valuable financial tips and strategies!
