Best Secured Business Credit Cards

How can you get a business credit card if you have less than perfect credit? If your goal is to strengthen or build business credit, this post is for you.

You’ve probably heard a secured credit card can be a good option to build or rebuild your personal credit. But what about businesses?

As a business owner, you need a different approach: a secured business credit card that builds your business credit.

What Is a Secured Business Credit Card?

A secured business credit card requires a refundable deposit before a card account can be opened. With the majority of secured business credit cards, the amount you deposit becomes the credit limit of the card.

You will also need to link your business bank account to the card account in order to load the security deposit to your card and make future credit card payments.

Keep in mind with a secured business credit card, you can make purchases just like a regular credit card. With this card, your payment history is reported to business credit reporting agencies such as Dun & Bradstreet, Experian Commercial and Equifax Small Business to name a few.

The main benefit to secured business credit cards is the ease of approval. You don’t need good credit to qualify. Secured business credit cards are designed for business owners who have less than perfect credit or little to no credit history.

Let’s face it, credit cards are an essential tool needed for day-to-day business activities. If you’re paying for supplies, booking a hotel, purchasing airline tickets for business travel, or simply taking a client out to lunch; a business credit card is a must.

Putting a small deposit down for a business credit card is a smart decision. It helps you build business credit, keeps personal and business expenses separate, and may potentially lead you to acquiring an unsecured business credit card.

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Instant Approval Business Credit Cards

The surge in applications for instant approval business credit cards has caused a dramatic increase in credit card usage among small business owners according to the 2009 Small Business Credit Card Survey.

Since April, the top TARP recipients cut their small business loan balances by $8 billion dollars. While traditional loans have dried up and small business credit lines get cut, banks have decided to funnel more of their small business lending with business credit cards.

Even though some leading credit card companies like Advanta left the card business entirely it’s refreshing to see that banks like J.P. Morgan Chase card services launched four more credit cards specifically targeted at small-business owners.

As these instant approval credit card offers enter the market to compete for your business it’s important for you to consider all the business credit card options and compare the costs to the benefits before you apply.

Here are just a few to take into consideration:

Cash Back – Many business credit cards now offer cash back rewards. For example Chase’s new InkSM Cash has unlimited cash back and accelerated earnings on its card. This is a great perk because it rewards you for spending on everyday business purchases that you do already. Make sure you understand what the card’s limitations are and read the fine print before you apply.
Frequent Flyer Mileage – Getting frequent flyer or airline miles cards is a very popular perk for business travelers. Once you accumulate enough points you can redeem them for airline discounts or free nights at participating hotels. Make sure you know if there are any limitations prior to applying.
No Annual Fees – Many business credit cards now waive the annual credit card fees. Keep in mind that your credit score needs to be strong to get these credit cards. However, if your business pays its balance in full every month then this is definitely the way to go if you can. In effect, if you pay your balances, you get the credit card for free.
Zero Percent Balance Transfers – This can help you reduce your high interest debt. Be sure to never miss a payment or you’ll immediately lose your interest free terms and have to pay the full rate.
Payment Reporting – Traditionally, the majority of the easy approval business credit cards in the marketplace report your payment history and revolving debt to your personal credit files and not to the business credit bureaus.

However, some companies have started to catch on to the new world of business credit cards like JP Morgan Chase and American Express. They understand that business credit cards are for business purchases and any debt incurred should only report to business credit reports not your personal one. These unsecured business lines of credit shelter your personal credit for personal necessities such as auto loans, mortgages, student loans, and personal credit cards.

When you apply for instant approval credit card offers they check your personal credit report, but your payment history and debt report to the business credit bureaus. This is what every small business owner like you should demand from a business credit card.

One important catch is if your accounts become delinquent then these leading credit card companies will report the delinquency to your consumer credit bureaus as well.

Finally, keeping liability strictly tied to your business can be accomplished with no personal guarantee business credit cards. There are less than forty of these types of cards available and you will need to have a strong business credit file in order to qualify.

With the growth in business credit bureaus, data suppliers, and business credit files across the country more and more leading credit card companies will have to supply an ever growing demand of new business credit cards with high credit limits that will have to measure up to the needs of today’s small business owner.

I encourage you to choose credit cards that will best serve the needs of your business while supporting the growth of your business credit file and limiting personal liability.

Business Credit Resources

» Start Business Credit

» Business Credit Builder

» Business Credit Blog

Looking for business credit? Become a member of my Business Credit Insiders Circle and gain access to a proven step-by-step business credit building system. A system that provides you access to vendor lines of credit, fleet cards, business credit cards with and without a PG, funding sources and lenders that report to all the major business credit bureaus. Submit your name and email below for details and receive a free business credit building audio seminar ($597 value) =>

Marco Carbajo

Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for AllBusiness, a subsidiary of Dun and Bradstreet and author of “Eight Steps to Ultimate Business Credit” and “How to Build Business Credit with No Personal Guarantee.” His articles and blogs have also been featured in the SBA Community, American Express Small Business, Business Week, The Washington Post, The San Francisco Tribune, Scotsman Guide, Alltop, Entrepreneur Connect, and Active Rain.