Credit cards for small-business owners with poor credit: Know your options

business-credit-card-bad-creditImage: business-credit-card-bad-credit

In a Nutshell

Owning a business can bring unexpected financial down times and credit hits. When it comes time to apply for a credit card, there are a few options that can help you get back on your feet and build business credit.
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This offer is no longer available on our site: Capital One® Spark® Classic for Business

Starting a business means taking risks, making changes and building from the ground up. Every small-business owner has a story. And if your story includes navigating rough financial waters (or just barely getting your feet wet), it can be difficult to access a line of credit.

We’ve rounded up three of our favorite cards for small-business owners with poor credit. While you’re busy building your empire, these cards will help you build your credit, without necessarily sacrificing features you’ll see on more-exclusive cards.

Wells Fargo Business Secured Credit Card

Who’s it for?

The Wells Fargo Business Secured Credit Card is a versatile pick for the small-business owner who wants a secured business card that can help them build their business credit, along with rewards.

Why we like it

This card is a unique combination of credit-building accessibility and desirable perks. For a limited time, new cardholders can earn 1.5% cash back on purchases if you enroll in the Wells Fargo Business Card Rewards Program and choose the Cash Back Rewards option, for no annual rewards program fee. Or if you’d rather earn points, you can choose the Rewards Points option in the program to earn one point for every $1 spent on purchases.

You’ll also get …

  • A credit limit that spans $500 to $25,000, depending on what you put down for your deposit
  • Up to 10 additional employee cards
  • No foreign transaction fee

Watch out for

Your business credit is separate from your personal credit, so it’s important to know who your business credit card reports to — but figuring this out can be confusing.

While the Wells Fargo Business Secured Credit Card can help you build your business credit, it may or may not report to the consumer credit bureaus as well, which is where your personal credit reports come from. If you’re concerned about whether this card could impact your personal credit, contact Wells Fargo to ask directly.

How to use it

Remember that your credit limit is determined by how much you put down for the deposit. Just like with personal cards, paying your business credit card off in full every month and making payments on time is key to boosting or maintaining your credit. If you keep up with payments and use the card responsibly, Wells Fargo may upgrade you to an unsecured business credit card. 

Spark® Classic from Capital One®

Who’s it for?

The Spark® Classic from Capital One® card is a solid choice for the small-business owner who wants a low-maintenance card that will help build credit.

Why we like it

This card is nothing flashy, but it gets the job done. It’s an unsecured card for users with “fair” credit. By Capital One’s standards, “fair credit” could mean you’ve defaulted on a loan sometime in the past five years or that your credit history is very limited.

We like that this card is simple to use with limited fees.

  • Annual fee: $0
  • Foreign transaction fee: None
  • Fee to add additional employee cards: $0

You’ll also receive 1% cash back on all eligible purchases — with no sign-up or activations required, and the rewards are unlimited and won’t expire while your account is open.

Watch out for

Capital One reports business card activity to the business credit bureaus, but it may report to the three major consumer credit bureaus as well. So be aware that how you use Spark® Classic from Capital One® could affect both your personal and business credit. But paying your card balance off in full and on time every month can help you build your business credit (and maybe your personal credit, too).

How to use it

The Spark® Classic from Capital One® works great for building credit, and that’s what it should be used for. If you’ve got your eye on the rewards and perks that come with business cards reserved for those with excellent credit — such as its complement, the Spark® Cash from Capital One® — the Spark® Classic from Capital One® could be a stepping stone to help you get there.

Credit One Bank® Platinum Visa® for Rebuilding Credit

From our partner

Credit One Bank® Platinum Visa® for Rebuilding Credit

See details, rates & fees

Who’s it for?

While not a business credit card, the Credit One Bank® Platinum Visa® for Rebuilding Credit can still be helpful for small-business owners by helping you build your personal credit. Lenders may check your personal credit along with your business credit when deciding whether to approve you for a business card. So building your personal credit first, with positive personal credit card use, could potentially help you get approved for a business credit card in the long run.

Why we like it

Your unsecured options may be limited if your credit has taken a dive, but the Credit One Bank® Platinum Visa® for Rebuilding Credit card is just that. If you apply on Credit One’s site, you’ll find out if you prequalify in less than a minute (without dinging your credit scores).

We like that this credit-building card doesn’t skip out on rewards. You’ll earn 1% cash back, in the form of statement credit, on eligible purchases in the following categories:

  • Gas
  • Groceries
  • Internet
  • Mobile phone service
  • Cable and TV satellite services

You’ll also be able to monitor your credit health with free monthly access to your Experian credit score and credit report summary. And you’ll be automatically reviewed for credit line increases with this card. That’s helpful for a growing business (and a busy entrepreneur).

Watch out for

Credit cards intended for users with poor credit are taking on higher risk, so they can come with higher fees. The annual fee for the Credit One Bank® Platinum Visa® for Rebuilding Credit card is $75 for the first year, $99 thereafter.

How to use it

If you’re intending to use the Credit One Bank® Platinum Visa® for Rebuilding Credit card for business, keep your personal expenses on a separate card. Pay off your statement balance in full and on time every month, while keeping a close watch on your credit limit — and you’ll be on your way to better credit and, hopefully, some business credit card options. 

Bottom line

If you struggle with credit, growing your business can feel like an uphill climb. But there are cards intended to help you steadily build your credit. Despite high fees or deposits, these cards can help you work on your credit health if you use them responsibly.

Choose a card with features that matter most to you and offer an opportunity to grow, and soon you’ll be applying for a business credit card that better suits you and your work.

About the author: Heather Swick is a freelance writer who specializes in credit cards, mortgages and personal finance. She has a bachelor’s degree in communication, journalism and related programs from Bradley University. Heather alway… Read more.