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Are you looking to separate your business finances from your personal finances? Well, if you want to do so with a business credit card, a card with no personal guarantee might be an option you want to explore. However, it may seem like every single card offer requires you, as an individual, to serve as a guarantor.
Since credit card loans are unsecured, banks want an extra line of defense in case your business can’t pay its debts. As a result, almost every bank asks for a personal guarantee on business credit cards. As such, it’s hard to come by a business credit card with no personal guarantee requirement.
That said, it is possible to waive the personal guarantee requirement. However, this doesn’t rely on the card you apply for but on your relationship with the bank.
We’re breaking down exactly what the personal guarantee means, how you can (at least try to) get it waived, and the top options for a business credit card with no personal guarantee requirements.
In a hurry? Here’s a quick summary to find your the best card.
As we said, it can be tough, if not impossible, to get a business credit card with no personal guarantee. In some cases, you can waive the guarantee, but your best bet is to focus on business credit cards that won’t heavily impact your personal credit score. This could be because the bank usually only does a soft pull when you apply, they only report seriously delinquent accounts, or they don’t report any history at all.
Our top business credit card picks for those being cautious with their credit are:
First, let’s dive into the mechanics of a personal guarantee.
In a nutshell, when you guarantee a business loan, you’re saying that you’ll personally pay off the loan if the primary payer (your business, a co-signer on a personal loan, etc.) defaults.
Most small business credit card terms include a clause saying that you’re personally responsible for paying off the balance if your business can’t do it.
It’s important to know that personal guarantees hold whether you’re an S-corp, C-corp, or LLC. Registering your business as an LLC limits your personal risk if, say, your company gets sued. However, it doesn’t let you off the hook on your business credit card debts.
There are two ways you can get business credit cards with no personal guarantee requirements. Both of them rely on your business’s financials and credibility, rather than the cards themselves.
As we mentioned, almost every bank wants a personal guarantee. That is unless your business meets certain requirements or you negotiate a personal guarantee waiver after the fact.
However, not all business credit cards will impact your personal credit score. For example, when you apply, some issuers may just do a soft pull of your credit (which won’t affect your credit score). Take American Express, who in most cases, from what we’ve seen, usually just do a soft credit pull when you apply.
Then, after you take out a business credit card, you have to consider whether or not the bank reports your usage to personal credit bureaus. Think on-time payments, debt-to-credit ratio, credit limit, etc. But, not every bank reports your usage to personal credit bureaus.
This can be helpful if you need to carry a balance on your business credit card and don’t want it to negatively impact your credit utilization. Discover and Capital One report business card usage to personal credit bureaus. Meanwhile, Chase and U.S. Bank only report seriously delinquent accounts.
On the other hand, credit cards issued by Bank of America, Citibank, BBVA, and Wells Fargo won’t impact your personal credit score.
So if you can’t get a business credit card without a personal guarantee, here are our top picks for business credit cards that are better for your personal credit score.
Chase Ink Business Preferred
As we mentioned, Chase won’t report your business card usage to personal credit bureaus unless you’re seriously delinquent. Which is good news, as the Chase Ink Preferred is one of the best cards on the market. If you like to travel, there isn’t a better option.
Right now, the Chase Ink Preferred has the best sign-up bonus available to businesses. When you spend $5,000 in the first 3 months, you get 80,000 bonus points. This is equivalent to $1,000 towards travel.
Although there is an annual fee of $95, outside of that awesome sign-up bonus, you can earn 3 points per $1 spent on the first $150,000 spent in certain categories, and 1 point per $1 spent on all other purchases.
If you happen to use a personal Chase card, this card becomes even more powerful, as you can combine points. I’m personally a fan of using this card alongside the Chase Sapphire Reserve.
Learn more about the Chase Ink Preferred.
American Express Blue Business Plus
As a reminder, American Express, in most cases, usually does a soft credit pull only when you apply for one of their business cards. So, if you happen to be shopping for a card with a 0% intro APR offer, RUN to apply for the American Express Blue Business Plus.
A little dramatic, yes, but my excitement here is because I’ve never seen an intro period this long on a business credit card. Their 0% intro APR period lasts for 15 months. That’s like a 15-month interest-free loan!
Of course, you’ll want to be careful that you have a plan to pay off any debt before those 15 months are up. Outside of the intro period, other perks of this card include no annual fee and the ability to earn 2x points on your first $50k in spend,
Learn more about the American Express Blue Business Plus.
Chase Ink Business Cash
To reiterate: Chase doesn’t report the usage on this card to the personal credit bureaus unless you’re seriously delinquent. So as long as you borrow responsibly, you’re in the clear.
The Chase Ink Business Cash is one of the cash back cards out there. Cash back is great for business owners who want to earn rewards for their spend, but don’t want to have to do any extra work to redeem those rewards.
The Ink Business Cash boasts a 0% APR on purchases and transfers for the first 12 months and offers 5% cash back on office supplies and phone, internet, and cable services (up to a combined $25,000 spent annually). You’ll also get 2% cash back on gas and restaurants (up to a combined $25,000 spent annually). Beyond that, you’ll get an unlimited 1% cash back elsewhere.
To sweeten the deal, it had no annual fee and comes with a $300 signup bonus. You’ll just have to spend $3,000 in the first 3 months of cardmembership.
Learn more about the Cash Ink Business Cash.
We’ll admit it.
A business credit card with no personal guarantee requirements is hard to come by. Plus, they’re usually out of reach for small or new business owners.
That being said, you can still find plenty that do have good rewards and minimal impact on your personal credit score. Any of the options above should meet your requirements, but you can explore these cards and more below.