Credit Cards

Credit Cards For Businesses With Bad Credit

Credit Cards For Businesses With Bad Credit

Is your business struggling with bad credit, and you're at a loss when it comes to finding a credit card to assist with expenses? Fret not! Flik Eco is here to guide you through the murky waters of credit cards for businesses with bad credit. Let's navigate the world of poor credit ratings together and find a credit card that works for your business.

Why Do Businesses Need Credit Cards?

Credit cards can provide businesses with numerous perks, such as:

  • Improved cash flow
  • Access to emergency funds
  • Rewards and discounts on expenses
  • Separation of personal and business finances
  • Ease in tracking expenses and budgeting

However, obtaining a credit card for your business can be challenging if you have a low credit score.

Why Do Businesses Have Bad Credit?

A bad credit score can stem from various factors, including:

  • Incomplete credit history
  • High levels of debt
  • Missed or late payments
  • Business age
  • Public records such as bankruptcies or tax liens

Credit Cards for Businesses with Bad Credit

Despite the challenges, there are options available for businesses with poor credit scores. Let's explore some credit cards that cater to businesses with less-than-stellar credit.

Secured Business Credit Cards

Secured credit cards require a security deposit, which typically becomes your credit limit. This minimizes the lender's risk, making it an ideal option for businesses with bad credit. Although the deposit can be a potential downside, responsible card usage can help improve your credit score over time, eventually allowing you to qualify for an unsecured card.

Business Charge Cards

Charge cards are not technically credit cards, as they require you to pay your balance in full every month. Nonetheless, they can provide businesses with limited credit access and some breathing room to manage expenses. Note that since you can't carry a balance, a charge card might not be the ideal choice if your business struggles with cash flow.

Unsecured Credit Cards with Higher Interest Rates

Some credit card issuers may offer unsecured business credit cards to those with bad credit at the cost of higher interest rates. This option should be approached cautiously, as high-interest rates can lead to unsustainable debt if not managed well.

How to Improve Your Business Credit Score

Improving your business credit score is crucial in gaining access to better financial products. Here are some steps you can take:

  • Check and monitor your credit report regularly
  • Resolve any errors or discrepancies on your report
  • Make timely payments on all debt obligations
  • Reduce your debt levels
  • Establish a good credit history by using your business credit wisely

Credit Cards For Businesses With Bad Credit Example:

Let's say your catering business is a little over two years old, and your credit score is suffering due to late payments and high levels of debt. To keep your business afloat and boost your credit score, consider opting for a secured business credit card with a $2,000 deposit.

By using the card responsibly, like paying it off regularly and not maxing it out, you can demonstrate creditworthiness and improve your business's credit score. Over time, you'll potentially qualify for better credit card options, such as unsecured business cards with lower interest rates and beneficial rewards programs.

Now that you have the lowdown on credit cards for businesses with bad credit, Flik Eco encourages you to explore your options and make informed decisions based on your business's unique needs. Remember to use your chosen credit card wisely to improve your creditworthiness over time. If you found this article helpful, please share it with other business owners and feel free to browse Flik Eco's extensive library for more personal finance tips and advice.


About Jermaine Hagan (The Plantsman)

Jermaine Hagan, also known as The Plantsman is the Founder of Flik Eco. Jermaine is the perfect hybrid of personal finance expert and nemophilist. On a mission to make personal finance simple and accessible, Jermaine uses his inside knowledge to help the average Joe, Kwame or Sarah to improve their lives. Before founding Flik Eco, Jermaine managed teams across several large financial companies, including Equifax, Admiral Plc, New Wave Capital & HSBC. He has been featured in several large publications including BBC, The Guardian & The Times.

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