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When you’re sifting through your options for business credit cards for fair credit, it’s easy to get caught up in an all-too-real conundrum: It’s difficult to secure a business credit card with a less-than-stellar or limited credit history. But, at the same time, the best way to build or rebuild credit is with a credit card.
Don’t worry—though your choices for business credit cards may be limited, you’ve still got plenty of options.
In this guide, we’ll break down your options for business credit cards for fair credit. But first, let’s learn a bit more about what it means to have fair credit.
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So what does having “fair credit” mean within the context of business credit cards?
When you apply for a business credit card, the card issuer will typically look to your personal credit score when deciding whether or not to extend you the business credit card in question. They’ll look at your personal fiscal responsibility because the credit card issuer considers you, the business owner, to be the main manager of your business credit card.
So, within the context of business credit cards, it’s assumed that “fair credit” refers to your personal credit rather than your business credit, as that will almost always be the ultimate decider.
Though this might seem unfair or arbitrary—many small business owners might sacrifice their personal financial soundness in order to better their business’s—you’ve still got some pretty great options when it comes to business credit cards for fair credit.
Even if you’re not quite able to access an unsecured credit card with your current personal credit score, improving your personal credit is just one additional step toward securing a business credit card for fair credit.
Now that you know what “fair credit” means when it comes to business credit cards, let’s look at your options for the best business credit cards for fair credit.
The Capital One Spark Classic is the only unsecured business credit card for fair credit out there. It offers a credit limit—with no security deposit required—to business owners with personal credit of 550 or above. Meanwhile, most other unsecured business credit cards out there require that you have a personal credit score of at least 620 in order to qualify for a card.
Not to mention, you’ll be able to earn rewards for any business spending you do on this business credit card for fair credit. You’ll get an unlimited 1% cash back for every dollar you spend. Unlike other cash back cards, the Spark Classic doesn’t come with an annual fee, so you won’t have to pay for these perks.
The Spark Classic is a great option for business owners with fair credit since it will report all of your activity on it to personal credit bureaus. When you spend responsibly with it, your personal credit score will improve accordingly.
On the other hand, if you miss monthly payments or outspend your credit limit with the Spark Classic, then your personal credit score will suffer accordingly. So, it’s especially crucial to be diligent with this business credit card for fair credit, as your personal credit score is at stake.
If you do end up spending responsibly and improving your personal credit with the Spark Classic, then you can access even better business credit card deals as a result.
Once you surpass that 620 threshold, you’ll be able to access some of the very best business credit cards—all unsecured–on the market.
What if you’re not quite able to qualify for a Spark Classic?
If your personal credit isn’t quite at that 550 cut off, not to worry. You’re just one step removed from access to the Spark Classic.
All you have to do is improve your personal credit score with a secured credit card. A secured credit card is a credit card that has a credit line secured by a refundable security deposit. This security deposit makes secured credit cards much easier to access if you have fair credit, as it mitigates the risk that a card issuer takes on by extending you a credit line.
It might seem counterintuitive to get a credit card just to lock up your cash in a security deposit. You’re probably thinking, “Why wouldn’t I just spend with my debit card at this point?”
However, a secured credit card is meant for pretty much only one thing: building credit. The Capital One Secured Mastercard is the best, most flexible secured credit card for business owners looking to build or rebuild credit.
This secured card is the most flexible credit building solution out there. And though it’s actually a personal secured credit card, it’s ideal for business owners who need to build their personal credit to improve their future business credit card options.
While most secured credit cards require that you put down a security deposit of at least 90% of your credit limit, depending on your creditworthiness, the Capital One Secured Mastercard comes with the possibility to put down a security deposit of as little as 25% of your credit limit.
Additionally, if you’re unable to provide your security in one lump sum, you could pay it in installments, as long as it’s paid in full within 35 days of being approved.
Finally, unlike many other credit cards that are meant for building credit, the Capital One Secured Mastercard won’t saddle you with an annual fee, or any other hidden fees, for that matter.
If you’re looking for a flexible yet effective way to build your personal credit, then you’re looking for the Capital One Secured Mastercard. If you spend responsibly with this secured card, you’ll be at that 550 threshold that the Spark Classic requires in no time.
If you have no credit, the Wells Fargo Business Secured Credit Card is a good option for your business. Note that because this is a secured credit card, you’ll have to put down anywhere between $500 and $25,000 as a security deposit, depending on how big you want your credit limit to be. Unlike the Capital One Secured Mastercard, this business credit card for fair credit requires that you put down the full amount of your credit limit.
Other costs to be aware of with the business credit card for fair credit include an ongoing high APR, a $25 annual fee, and up to a $50 late payments fee. However, the Wells Fargo Business Secured Credit Card also allows you to earn rewards as you spend. For starters, you’ll get 1.5% cash back on all purchases, which is more than you get with the Spark Classic.
It’s important to note that Wells Fargo doesn’t report to personal credit, so you can only use this card to build your business credit. This arrangement is less than ideal for those who want to build their personal credit to qualify for an unsecured business credit card.
You’re probably picking up on a theme here: If you have fair credit, it’s hard to qualify for an unsecured credit card. That’s why our next business credit card for fair credit option is the BBVA Compass Secured Visa Business Credit Card. Indeed, it’s another card that will require you to lay down a security deposit. It also comes with the major caveat that it’s only available in seven states: Alabama, Arizona, Colorado, California, Florida, New Mexico, and Texas.
However, if your business is located in one of those states, the BBVA Compass Secured Visa Business Credit Card is a great business credit card for fair credit. If you sign up by December 2019, you’ll receive a 0% introductory APR for the first nine months. After those nine months, a variable ongoing APR that will be adjusted with the market Prime Rate will set in, so be sure to check the terms of your agreement for the latest APR information.
Other costs to be aware of include a late fee between $19 and $39 between on your account balance, and an increased penalty APR. There is also a foreign transaction fee of 3%, and a balance transfer fee of $10 (or 4%, whichever is higher).
The rewards program, however, is second to none in the secured credit card space. First off, you’ll earn 20,000 “CompassPoints” if you make $3,000 worth of purchases in your first 90 days. This makes the BBVA Compass Secured Visa Business Credit Card the only option on our list of the best business credit cards for fair credit to offer an introductory reward. Ongoing rewards include 3x cash back on office supplies, 2x cash back at gas stations and restaurants, and 1x cash back on all other purchases.
Additional features include purchase protection if your card is lost or stolen within the first 90 days of opening your account, $500,000 in coverage for travel incidents when you spend on transportation, and auto rental collision damage protection.
No matter where your credit score lands, if you’re the owner of a registered business entity, you can definitely qualify for the Bento for Business Visa® Debit Card. That’s because Bento doesn’t require a credit check to sign up—which means it doesn’t require any minimum credit score to qualify. And since it’s a debit card, it will never impact your credit score.
When you sign up for Bento, your card is hooked up to your checking or business banking account, and you’ll securely transfer cash directly onto the card to fund your credit line. That may sound a lot like a secured credit card, since both are funded with the cardholder’s own capital. But unlike a secured credit card, the Bento’s expenses are pulled directly from the cardholder’s own bank account. You won’t carry a monthly balance with the Bento card, so you can’t use this card to build credit.
Rather than a credit-building solution, this is an excellent tool for business owners who delegate and manage spending for several employees. Bento makes it easy for the original cardholder to create and assign new cards, set spending limits, and track card activity—all without any hidden fees. Take advantage of its features while you graduate your credit from fair to good with the Spark Classic or the Capital One Secured Mastercard.
The bottom line for sifting through your business credit cards for fair credit options?
If you’re working with fair credit that rounds in higher than 550, then your decision should be a no-brainer—your very best business credit card option is the Spark Classic. With an unsecured line of credit, an unlimited 1% cash back for every dollar you spend, and no annual fee, the Spark Classic can’t be beat when it comes to business credit cards for fair credit.
However, if your personal credit score doesn’t quite reach the eligibility threshold for the Spark Classic, then you’ll need to build credit with a secured card option—the best of which options include the Capital One Secured Card, the Wells Fargo Business Secured Credit Card, or the BBVA Compass Secured Visa Business Credit Card.
And if you’re delegating expenses to one or more employees, signing up for a prepaid business debit card that won’t impact your credit score is a no-brainer. Track, control, and manage employee spending with the Bento for Business Visa® Debit Card while you build you credit with a conventional credit card.
Either way, spending responsibly with these five business credit cards for fair credit will help you build and improve your personal credit score. If you keep at it, your credit will help you access some of the very best business credit cards available on the market.