Business Credit Cards

Jumpstart Your Business Credit With A Secured Credit Card

Like the personal secured credit cards, it is possible for business owners to jump starting their business credit with a secured business credit card.  Using a secured business credit is a phenomenal way to quickly build positive business credit.

Most secured business credit cards can be started with as little as $500.  The deposit serves as collateral and limits the credit card company’s risk. If you fail to make payments, it can use the deposit to repay your debt. But if you make payments on time, the issuer might increase your credit limit without requiring an additional deposit.

Use a secured card as you would a regular credit card, repaying what you borrow with minimum monthly payments — often 2% to 3% of the card balance — or paying the outstanding balance in full each billing cycle to avoid interest charges.

Secured Cards are designed for business that may have little to no business credit or poor business credit.  It works well for business owners who have personal credit challenges.  Normally businesses under two years in age require the owner to personally guarantee a business credit card.

The secured business cards are the best option to move forward and develop your business credit profile.  We have found a selection of good secured business credit cards, whose issuers currently report to either one of the business credit reporting agencies: Equifax Business, Experian Business or Dunn & Bradstreet.

Unsecured Cards offer the lowest rates and may come with cash back, travel rewards, and introductory interest free promotions.  These cards can be obtained even if you have just started your business.  However, most banks will require the business owner to personally guarantee the credit card, and they generally must possess a credit score of 680 and above.

 

bbva     bbva2

  • Secured by Your Savings – Before applying for the Business Secured Credit Card, you must open a Secured Credit Card Savings Account. The minimum opening deposit is $500. You can make deposits at any time in $100 increments.
  • Available Credit – Your available credit will be 90% of your savings account balance. You can add funds to your account to increase your credit limit.
  • Online account services – Manage your account at your convenience, view up to 6 months of past account statements available to download, and more.
    • Manage employee business expenses with online tools that will help control, monitor and track card spending trends.
    • Integrate expense data and reports with accounting software packages.
    • Pay business credit card bills online …read more>

 

wells-fargo-bwells

  • Secured by Your Savings – You provide $500 to $25,000 to fund your business secured credit card.
  • Available Credit – Your credit line equals the amount of your deposit. As with any credit card, you’ll need to make monthly payments toward any balance you accrue.
  • Establish or rebuild your business credit with Wells Fargo. Your account will be evaluated periodically for the opportunity to upgrade to an unsecured business credit card.
  • Get up to 10 cards for you and your employees…read more>

 

VISA-BusinessMetro2       metrocu

  • Secured by Your Savings – You provide $500 to $25,000 to fund your business secured credit card.
  • Available Credit – Your credit line equals the amount of your deposit. As with any credit card, you’ll need to make monthly payments toward any balance you accrue.
  • Funds are guaranteed by a Metro savings account.
  • Low APR* of 13.90% while building your business’ credit history.
  • $45.00 annual fee
  • Check membership requirements
  • If your business has less than two years of credit history, the Metro Credit Union Visa® Secured card might be right for you…read more>

 

The following two secured business credit cards are not our first choice, but they will do the trick if you have marginal credit.

vystar      vstaree

 

  • Secured by Your Savings – You provide $2,500 to $25,000 to fund your business secured credit card
  • Low variable interest rate
  • No annual fee or transaction fees
  • No length-of-time-in-business requirements
  • Check membership requirements
  • Credit decision based on business owner(s) personal credit scores; no tax returns required…read more>

 

visa_business_editionfnb

  • Request your own credit limit between $2,000 and $100,000 (in $50 increments), subject to credit approval.
  • Provide a security deposit equal to 110% of your requested credit limit (between $2,200 and $110,000).
  • Make purchases with your card the same way you would with any other credit card, for a low $39 annual fee.*
  • Earn interest on your security deposit…read more>

Potential benefits

A secured business credit card can help you develop good financial habits. If you make on-time payments and maintain a low card balance, you’ll improve your business credit score. A higher score increases the chance that you’ll be approved for a low-cost small-business loan or line of credit in the future.

Some secured business credit cards include other benefits, including the ability to sign up for employee cards with preset spending limits; zero liability protection on unauthorized purchases; rewards for spending; overdraft protection; and the ability to separate business and personal expenses, which makes it easier to prepare taxes and safeguards your personal assets.

Mixing your personal and business finances can be dangerous. If there’s ever a lawsuit, there’s a way for that company to go after you personally because you’re commingling funds. So make sure you are using this card for business purposes.

Beware the risks

If you don’t feel confident that you can pay the bill on time each month, then you’re not ready to get any type of credit card. You must be careful as this is your golden opportunity to build or rebuild business credit. But if you don’t make timely payments, your business credit score will reflect the impact in a negative manner.

Like traditional credit cards, secured business credit cards can have high interest rates and come with additional fees, such as late-payment fees, annual fees (typically $25 to $45), over-limit fees and returned-payment fees.

Miss a payment and you might trigger a penalty interest rate. If you default on the card, the lender can seize your security deposit.

Tips for small-business owners

  • Making on-time payments is crucial to improving your credit. Consider having your monthly payments automatically debited from your checking account, or set up email or text alerts to remind you when payments are due.
  • Try not to carry a balance. Many secured business credit cards have interest rates of 12.9% and up, which you’ll avoid if you pay your balance in full each month.
  • Try not to max out the card. If you want to raise your credit score as quickly as possible.
  • We recommend keeping your credit utilization ratio — the amount you owe on your credit cards relative to their limits — below 10% ($500 on a $5,000 credit limit).
  • Read the fine print on every credit card offer. Not every card will be a good fit for you. Watch out for excessive fees and sky-high interest rates, and try to get a card that offers some rewards.

The bottom line

If you want to build up or improve your business credit, a secured business credit card can be a useful financial tool. It will help you improve your credit, which will help you to qualify for a small-business loan down the road — but only if you are smart about how you use it

How can we help your business grow?

Contact us at the Hillcrest Financial office nearest to you or submit a business inquiry online.

“Hillcrest Financial really helped us achieve our financial goals. The expert advice we received has truly ensured that our businesses financial standing is stable.”

Amanda Seyfried
Sr. Purchasing Officer, Cleveland, OH

Looking for a First-Class Business Plan Consultant?