The Best Business Credit Cards for Bad Credit

Having a business credit card is more than a convenience—when used responsibly, it’s a crucial credit-building tool. However if your personal credit score has taken a hit, or if you don’t have a credit history at all, then you’re caught in a conundrum: You need a business credit card to build your score (and pay for daily business expenses), but your score isn’t high enough to qualify for most business credit cards on the market. To start improving your credit in order to expand your business financing possibilities for the future, you’ll want to look for the best business credit cards for bad credit.

Ultimately, as we’ll discuss below, your options for small business credit cards for bad credit are limited, but they do exist. Overall, rather than a standard, unsecured business credit card, it will be better for you to use a secured business credit card (backed by a cash deposit) which requires low or no minimum credit score for approval. 

In short, a secured credit card is backed by a cash security deposit that typically equals the limit on the card. This deposit lessens the risk for the card issuer, and by using this type of card, you can build your credit to qualify for a more competitive product in the future.

Best Business Credit Cards for Bad Credit in 2020

Credit Card Annual Fee Minimum Deposit Reports to Best For
Wells Fargo Business Secured Credit Card
$25 per card
$500
Business credit bureaus
Improving your business credit
BBVA Compass Business Secured Credit Card
$0 for the first year, then $40 per year
$500
Business and consumer credit bureaus
Building your business and personal credit
Discover it Secured Card
$0
$200
Consumer credit bureaus
Building your personal credit and earning rewards
Capital One Secured Mastercard
$0
$49
Consumer credit bureaus
Low-security deposit requirements
Bento for Business Visa® Debit Card
$0 if using less than two cards, $29-149 monthly for more
Card is funded with cash from your business bank account
Bento is not a credit card and does not report to business or consumer credit bureaus.
Prepaid cards to manage employee spending
Capital One Spark Classic for Business
$0
N/A
Consumer and business credit bureaus
Businesses with fair credit

1. Wells Fargo Business Secured Credit Card

First on our list of the best business credit cards for bad credit is the Wells Fargo Business Secured Card. The Wells Fargo Business Secured Credit Card is one of the only true business secured credit cards on the market. Unlike some of the other options on our list, this Wells Fargo card is specific to small businesses and will only help you build your business credit (as Wells Fargo will only report your history to business credit bureaus) and not your personal credit.

This being said, however, the Wells Fargo Business Secured Card can give you access to a credit line between $500 and $25,000, depending on how much you are willing to deposit. Additionally, this secured business credit card is unique in that it also offers a rewards program—allowing you to build business credit and earn cash back or rewards points for smart spending.

With this card, if you choose the points-based rewards program, you’ll earn one point per $1 spent and a  1,000-point bonus for every billing period that your company spend hits $1,000. On the other hand, if you opt for the cash back rewards program, you’ll earn 1.5% cash back on every $1 you spend.

The Wells Fargo Business Secured Card does require an annual fee of $25, however, there are no foreign transaction fees and no fee to participate in either rewards program. Moreover, Wells Fargo will periodically review your account to see if you qualify for an unsecured card.

Ultimately, if you’re looking to build your business credit and earn rewards while doing so, the Wells Fargo Business Secured Card may be the right choice for you. Once again, however, it’s important to remember that since Wells Fargo only reports your spending history on this card to business credit bureaus, and not consumer bureaus, using it will not help you build your personal credit. If you need a business credit card for bad credit to improve your personal credit, therefore, you’ll want to consider some of the other options on our list.

2. BBVA Compass Secured Visa Business Credit Card

Next on our list of the best small business credit cards for bad credit is the BBVA Compass Business Secured Visa Credit Card. Like the Wells Fargo Business Secured Card, this BBVA business credit card is a secured card specifically for businesses. Unlike the Wells Fargo card, however, the BBVA Compass Secured Visa Business Credit Card can help you build both your personal and your business credit, as BBVA reports your spending history to both consumer and business credit bureaus.

With this in mind, the BBVA secured business credit card requires that you open a Secured Credit Card Savings account with a minimum opening deposit of $500. This account will back your credit card and you’ll have access to a credit line equal to 90% of your savings account balance. You’ll be able to make deposits to that account in $100 increments at any time.

Additionally, because this BBVA card is a business credit card, you’ll be able to appropriately separate your business and personal finances and won’t have to worry about paying for business expenses with a personal card. Moreover, like the Wells Fargo secured business card, the BBVA Compass Business Secured Visa Credit Card offers an ongoing rewards program for all cardholders.

With this BBVA Visa business credit card, you’ll earn:

  • 1x rewards points for every purchase
  • 2x rewards at gas stations and restaurants
  • 3x rewards points at office supply stores

You’ll also be able to add employee cards to your account at no additional charge, plus, BBVA does not charge an annual fee to cardholders in their first year. After the first year, however, cardholders will have to pay a $40 annual fee.

All of this being said, it’s important to note that the BBVA Compass Secured Visa Business Card is currently only available in Alabama, Florida, Texas, Arizona, Colorado, California, and New Mexico, and therefore, will only be one of the best small business credit cards for bad credit if you live in one of these states.

3. Discover it® Secured Card

Once again, as we mentioned above, it’s very likely that you’re looking for a business credit card for bad credit because your personal credit is preventing you from qualifying for other business credit card options. This being said, if you need to improve your personal credit first and foremost, a secured personal credit card, like the Discover it Secured Card will likely be one of your top choices.

Although typically, it’s not recommended to use a personal credit card for business expenses, this card can be useful to build your credit and pay for daily business purchases as long as you use it exclusively for that purpose.

This being said, the Discover it Secured Card is a great option if you’re looking to move up the credit ladder and graduate to better products in the future. First, you can choose how much cash you want to contribute to secure your credit line—if you’re strapped for cash, you can simply opt for the $200 minimum. Then, every eight months, Discover automatically reviews your account to see whether you qualify for an upgraded, unsecured account. If that’s the case, they’ll refund your security deposit.

In addition, the Discover it Secured Card offers a fairly competitive rewards program as well. With this card, you’ll earn 2% cash back on up to $1,000 spent per quarter on gas and restaurants, and an unlimited 1% cash back everywhere else. Plus, at the end of your first year, Discover will also match all the cash back you’ve earned since you activated your account. Finally, this card has no annual fee, no foreign transactions or over-the-limit fees, and no late fee for your first late payment.

Of course, because the Discover it Secured Card is a personal card, you won’t have access to business-specific features like employee cards, and, as we mentioned earlier, you’ll need to be vigilant about using this card only for business purposes.

With this in mind, however, between the regular account reviews, no annual fee, and the ongoing rewards program, the Discover it Secured is one of the best bad credit options out there.

4. Capital One® Secured Mastercard®

Like the Discover it Secured card, the Capital One Secured Mastercard makes our list of the best business credit cards for bad credit, even though it too is a personal credit card. This being said, the Capital One Secured Mastercard is a particularly noteworthy option for its low security deposit requirements.

As we’ve seen, with most secured credit cards, your security deposit has to match your credit limit. With this Capital One secured card, however, a deposit of $49, $99, or $200 (determined based on your creditworthiness) will grant you access to a credit limit of $200. Plus, as long as you make your payments on time every month, you’ll have access to a higher credit line after your first five months of card ownership.

In addition, the Capital One Secured Mastercard offers the following benefits:

  • No annual fee
  • Access to Platinum Mastercard benefits, like 24-hour roadside assistance, travel accident insurance, and auto rental insurance[1]
  • No foreign transaction fees
  • Reports to all three major credit bureaus

Again, this isn’t a business credit card, so you’ll need to take extra care to separate your business and personal finances. This being said, however, if you need to improve your personal credit and don’t have the capital for a large security deposit, the Capital One Secured Mastercard card might be the best option for you.

5. Bento for Business Visa® Debit Card

If you’re working with bad or no credit, but you still want the convenience of a business credit card, you might look to the Bento for Business Visa® Debit Card. In fact, credit checks are not required to qualify for Bento, so you don’t need to worry about your credit score at all.

With features like pre-funded employee cards, an easy-to-use app and dashboard, and automatic integration into your bookkeeping or accounting software, Bento makes it easy to control and track employee spending across as many cards as your business needs.

This being said, however, unlike the other options we’ve discussed thus far, Bento isn’t technically a business credit card for bad credit—instead, it’s a business debit card. In this way, your Bento card only gives you access to funds you already have, as you’ll connect Bento to your business bank account and transfer funds directly onto the card.

Therefore, although prepaid business debit cards look pretty similar to secured credit cards, they have an important distinction. Because a prepaid card deducts funds directly from your bank account and you won’t carry a balance from month to month, Bento (and other business debit cards) can’t help you build your credit.

In this way, Bento is best when used in tandem with a secured credit card—as the secured card allows you to improve your personal credit, and Bento allows you to pay for your daily business purchases and keep them separate from your personal spending.

6. Capital One Spark Classic for Business

Finally, the Capital One Spark Classic for Business is the only unsecured business credit card on our list of the best small business credit cards for bad credit. Unlike the other options we’ve reviewed, the Capital One Spark Classic is actually designed for business owners with fair credit, accepting credit scores as low as 580. 

This being said, as an unsecured business credit card, the Capital One Spark Classic will not require a security deposit and will be a very competitive option for business owners who can qualify. The Capital One Spark Classic has no annual fee, earns an unlimited 1% cash back on every purchase, and offers additional employee cards at no extra cost. 

Moreover, Capital One will report your spending history with this card to both consumer and business credit bureaus—meaning if you spend wisely, you’ll be able to improve both your personal and business credit scores.

In this way, the Capital One Spark Classic can be a great transition card once you’ve built your personal credit to be able to meet the 580 qualification requirement. In fact, you might decide to use one of the personal secured cards on this list, improve your personal credit, and then switch to the Capital One Spark Classic to take advantage of its business-specific features—and continue to build your personal and business credit.

How to Use a Business Credit Card to Improve Your Credit

Ultimately, the goal of using a business credit card for bad credit is not only to finance your business purchases but, as we’ve mentioned throughout our discussion, improve your personal credit score as well. Once you improve your personal credit, you’ll be able to qualify for more competitive business cards—like travel rewards business credit cards and other similar options.

This being said then, there are a few guidelines you can follow when it comes to credit cards to ensure that you’re actually spending responsibly and improving (instead of hurting) your credit history.

  • Pay all your loan bills in full and on time: This includes your credit cards, mortgage, car loans, student loans, small business loans—any outstanding debt that you have. If you have a hard time remembering to pay your balances, you’ll want to try to set up automatic payments with your card issuer. If that’s not possible, you can try to set a reminder in your online banking app or on your calendar so you don’t forget.
  • Utilize debt, as long as you can afford it: Debt can help your credit score, as long as it’s debt you can afford. If instead of paying on-time, you pay your bills late, or default on them entirely, you’ll certainly lower your credit score. This being said, most negative credit behavior, like defaults, judgments, collections, foreclosures, and bankruptcy will stay on your report for seven to 10 years—so you should always be sure you can afford debt financing before taking it on.
  • Keep your credit utilization ratio low: Ideally, you should be using less than 30% of your available credit every month. Credit bureaus associate a high credit utilization ratio with borrowers who default on payments, so your credit score will improve if you keep your utilization at 30% or lower.
  • Regularly check your credit reports for errors: You’re entitled to one free credit report per year from all three of the major consumer credit bureaus. If you catch any inaccuracies, you’ll want to report them to the bureaus as soon as possible. Plus, if you do opt for a secured business credit card, as we discussed above, you’ll want to verify that the card issuer actually reports to the consumer credit bureaus. If the issuer doesn’t report to the personal bureaus, you won’t be able to make an impact on your credit score, and therefore, you might opt for an alternative card option.

The Bottom Line

At the end of the day, these business credit cards for bad credit are great options for business owners who need to build or rebuild their credit histories. Ultimately, as we’ve discussed, if you have poor personal credit, it will be very difficult to qualify for most unsecured business credit cards, so you may need to turn to a secured business or personal credit card

This being said, however, as we’ve mentioned, it’s important that regardless of which card you decide is best for your business, you spend wisely and keep your business and personal purchases separate. If you can pay your bills in full and on-time, only take on debt you can afford, and regularly check your credit report for errors, you should be able to build your personal credit up to a place where you can apply and qualify for more competitive business credit cards.

Article Sources:

  1. Capitalone.com. “Platinum Mastercard Guide to Benefits

Randa Kriss

Randa Kriss is a senior staff writer at Fundera.

At Fundera, Randa specializes in reviewing small business products, software, and services. Randa has written hundreds of reviews across a wide swath of business topics including ecommerce, merchant services, accounting, credit cards, bank accounts, loan products, and payroll and human resources solutions. 

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