Apply for business credit card with bad credit tips, Finance advice, Manage business operations guide

Apply for business credit card with bad credit advice

20 December 2022

For a business owner, a credit card becomes an essential tool to manage finances and efficiently run business operations. And when it comes to credit cards and loans, one can’t overlook credit score. It’s a known fact that a person’s credit score plays a crucial role in the evaluating credit eligibility.

This is also true for business credit cards. A bad, poor, or dented credit score will make it challenging for businesses to secure a credit card. If you are a business owner looking for credit but have a low credit score, you might opt for a guarantor loan or a secured loan. Besides this, you may also apply for a credit card with bad credit.

In this blog, we have listed some methods to pick a business credit card for bad credit.

But first, let’s understand how business credit cards are different from personal credit cards.

How can one apply for Business Credit Card with Bad Credit?

What makes a business credit card different from a consumer (personal) credit card?

As the name suggests, business credit cards are designed for businesses and entrepreneurs to meet their unique demands. The perks and benefits offered on business credit cards also vary from personal credit cards. Besides, business credit cards have higher borrowing limits to cater to the business’s volatile finance needs.

One example of benefits offered by business credit cards is employee cards. Most business credit cards allow employees to have a credit card as well. Moreover, business credit cards are not subjected to the same regulations that govern consumer credit cards. While most consumer credit cards come with a fraud liability guarantee, business credit cards don’t offer this benefit.

Tips for picking business credit card for bad credit

Securing a business credit card is already tricky and time intensive. There are many options to choose from and a long list of eligibility criteria to check. However, if you have a bad credit score or no credit score at all, you might experience a tough time securing a credit card. Before applying for a credit card for bad credit, always consider the following points.

#1 Steer clear of annual fees.

Some lenders offer credit to businesses with bad credit score. However, they charge a high yearly fee. Paying annual fees upfront will reduce your credit limit and rewards. Thus, when looking for credit card options, go with the one that has no annual fees.

#2 Check the minimum and maximum deposit limit.

When applying for a secured credit card, you should check the minimum and maximum deposit limits. Also, keep the cash ready to deposit. Another strategy to optimally use the secured card is to ensure the spending charged on the card doesn’t go over 30% of the total amount you intend to deposit. The idea is to avoid exceeding the standard card utilization ratio, as going over the limit will further hurt your credit report. You should also check with the card provider whether the maximum deposit amount will limit your spending.

#3 Go for the credit card that reports of the leading CRA.

If you apply for a credit card with bad credit in the UK, ensure that the credit card provider reports to Equifax, Experian, and TransUnion. The transactions you make on your credit card are recorded on your credit file. The credit bureaus use the report to assess your creditworthiness and give you credit score. With a properly managed secured credit card, you can build your credit score from scratch or rebuild it. Thus, it’s essential to acquire credit cards that report to Equifax, Experian, and TransUnion as they are the main consumer credit reference agencies.

#4 Read the fine print carefully

When it comes to finance and money, one should read the fine print. Most credit cards carry hidden charges that are not apparent at first but can come biting at you in the form of monthly charges or maintenance fees. Thus, you should always read the terms and conditions and cross-check with the card provider if the card has any annual fees or maintenance charges. However, there are various credit cards that charge no hidden fees or monthly maintenance fees.

#5 Fix your personal credit score

Before applying for a business credit card, one must ensure they have a proper credit report. If your personal credit score is not good for any reason, your first concern should be improving it. One of the biggest advantages of having a good credit score is you get a low interest rate and enjoy additional perks. Today, one can easily rebuild their credit score and strengthen their chances of securing a better deal on credit cards. Once your personal credit score is improved, you can easily obtain a business credit card with better rewards and benefits.

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