Having poor business credit history can make it difficult for business owners to get approved for new accounts. If you need to get a business loan or a business credit card, your application can get declined due to bad credit.
The good news is that many business credit card issuers offer bad credit credit cards for businesses. These cards are especially designed to meet the needs of entrepreneurs with bad credit history such as building or repairing damaged credit.
A business credit card for bad credit can either be secured or unsecured. Let us take a look at what each of these bad credit credit cards for business has to offer.
The Difference Between a Secured and an Unsecured Credit Card
Just like a secured credit card for individuals, business secured cards require the submission of a security deposit as well. The amount of deposit submitted will usually determine the business cardholder’s credit limit. For entrepreneurs who need a higher credit line to meet their monthly business spending, it is a must to submit a higher security deposit.
Again, the security deposit is required to give the business credit card issuer a stronger guarantee. Thus, in case the business doesn’t go as expected, the charges left on the account can be paid off using the security deposit. Deposits can range from $300 to $1,000 and up. Remember, if you need at least $1,000 credit line on your account, you need to save the same amount of money for your deposit.
On the other hand, entrepreneurs who can’t afford to submit a security deposit may prefer to get unsecured business credit card instead. This bad credit credit card for business doesn’t call for any deposit. However, these cards may come with higher rates of interests, more fees and lower credit limit.
Which One to Choose?
If your business calls for big spending, you should prepare a significant amount of security deposit before applying for a secured credit card. You may consider getting an unsecured bad credit business credit to give you more flexibility with your spending. The most important thing to remember about using a non-secured bad credit business credit card is to pay back your balances in full and on time to avoid the high interest costs and penalties.
However, if you want to get business credit card as a back-up for unexpected business expenses, then a secured credit card is a great option. You can submit a minimum amount of security deposit to avail a credit line and use it the card only for emergencies.
Whether you choose a secured or unsecured credit card for business, use it to improve your business credit history. As you rebuild bad credit, you can easily get approved for business credit cards and business loans with the best deals as these options are only reserved for business owners with good credit.
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Pamela Williams is a Loan Consultant, Internet Marketer and Writer. For years she had helped consumers and business owners especially regarding business credit cards. This resource is dedicated particularly on business credit card reviews, articles, tips and advice, and online application so that consumers and business owners may compare which is the best business credit card for their business. Copyright 2010 |
I’ve been using secured credit cards for over the years now and I enjoy the benefit of having a low interest rate than the unsecured ones.
Each card has its advantage and disadvantage, it merely depends on the needs of the user. Just remember to read the Terms and Conditions before you apply for a certain card.
Thanks for the comment Kim.
Any recommendations on secured cards for new business owners. I’m just starting out and would like to keep my personal credit out separate from the busienss credit. Thanks for any advice you can give.