Credit Cards

Small Business Credit Cards For Bad Credit

Small Business Credit Cards For Bad Credit

Running a small business comes with its fair share of challenges. One of those is establishing and maintaining good credit. But what happens when your credit score is less than perfect? Does that mean you can't get a small business credit card? Fear not! In this article, we'll dive into the world of small business credit cards for bad credit and how you can still secure one and improve your financial situation.

Small Business Credit Cards For Bad Credit Table of Contents

Finding the Right Card for Your Small Business

How to Improve Your Chances of Approval

Finding the Right Card for Your Small Business

1. Secured Credit Cards

The first option for small businesses with bad credit is to apply for a secured credit card. These cards require you to provide a cash deposit, which acts as collateral. Your credit limit will generally be equal to the deposit you provide. It's important to note that secured credit cards often come with higher fees and interest rates, so make sure you find one with reasonable terms.

  • Pros: Easier to qualify for, helps build credit
  • Cons: Comes with higher fees and interest rates, deposit required

2. Subprime Credit Cards

Another option is to consider subprime credit cards, which are designed for individuals with bad credit. However, these cards often come with predatory terms, such as extremely high interest rates and fees. If you choose this route, proceed with caution and ensure you understand the conditions before signing up.

  • Pros: Designed for those with poor credit
  • Cons: Extremely high interest rates, numerous fees, predatory terms

3. Business Credit Cards for Fair Credit

Some credit card issuers offer cards specifically for small business owners with fair credit. While not targeted at those with bad credit, it can be less challenging to qualify for these cards compared to those for excellent credit. Do your research and compare offers to find one that works best for your situation.

  • Pros: Easier to qualify for, designed for fair credit
  • Cons: May still be harder to get if your credit is very low

How to Improve Your Chances of Approval

When applying for a small business credit card with bad credit, there are steps you can take to improve your chances of approval:

  1. Check your credit report: Start by looking over your credit report to identify any errors or discrepancies. Correcting these can help improve your credit score.
  2. Improve your credit score: Pay down debt, make on-time payments, and avoid applying for multiple credit lines in a short period. These actions can all contribute to a better credit score.
  3. Build credit history: Use your current credit accounts (such as secured credit cards or loans) responsibly. This will show credit card issuers that you are capable of managing credit responsibly.

Small Business Credit Cards For Bad Credit Example:

Imagine that you own a small online store selling handmade candles. Your credit score has taken a hit over the years due to a combination of late payments and high credit card balances. However, you're working hard to turn things around. You've been paying down your debt, and your credit score has steadily started to improve.

You decide to apply for a secured credit card specifically designed for small businesses, which requires a $1,000 deposit to provide a $1,000 credit limit. By using this card responsibly and making payments on time, you gradually rebuild your credit score. As your credit improves, you become eligible for better credit card terms and may even be able to move on to an unsecured card with more perks and rewards for your business.

Navigating the world of small business credit cards with bad credit can seem overwhelming, but remember that there are options available to you. It may take some research and work on your part, but securing a credit card and using it responsibly can help set you on the path to a brighter financial future. Share this article with other small business owners, and be sure to explore other Flik Eco guides for more helpful tips and strategies to conquer your personal finance goals!


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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