Applying for and getting approved for a business credit card is one of the simplest ways to make purchases on credit for your business. It will also help to build your business credit history! Business credit cards have a few advantages over personal credit cards. They contain detailed reports, which helps you track expenses more easily. There is also usually a significantly higher credit limit that comes with opening a business credit card account.
Applying for the right business credit card is a great way to start building credit for your business. Not only will it help you create a clean separation between your personal and business finances, but your timely payments will build a solid credit history for your business.
One thing business credit cards have in common with personal credit cards is rewards programs. There are a large number of business credit cards offering various rewards and cash back programs that will be very beneficial for your business.
However, if you don’t have an established business credit profile, your personal credit will be used to make the credit decision.
Like your personal credit, when you are just starting out, your business has no credit history. You might ask how can your business get a credit card since there is no credit history for credit card companies to check. In those cases, they will actually look at your personal credit score.
What if you have less than perfect personal credit?
If you don’t qualify for an unsecured business credit card because bad or limited personal credit history, you can get a secured business credit card with a revolving line offered to your business by a bank. With secured business credit cards, cardholders need to put down a refundable cash deposit for collateral. So, in the event that you default on your credit card payments, the credit card issuer can use the deposit you made to repay your debt.
Once you’ve put your deposit down and the credit card company has set your credit limit, you can use your secured business credit card just like you’d use an unsecured one. They’re accepted anywhere an unsecured business credit card would be, so you don’t have to worry about where you can and can’t use it.
And just like any other business credit card, secured business credit cards incur interest if you don’t pay your balance off in time.
Recommended secured business credit card.
So, you’re ready to get your secured business credit credit card, but not sure where to start? After doing much research, we highly recommend checking out the Bank of America Business Advantage Unlimited Cash Rewards Mastercard Secured Credit Card. It is great for rewards, and a business owner can open the account with a payment as low as $1000. Here are the details:
- Open your account with a security deposit (minimum $1,000). Upon approval your credit line will be equal to your deposit amount.
- Build up your credit history – with consistent, on-time payments, you could improve your business credit over time.
- Seamless transition – we’ll periodically review your account and if your overall credit history improves, you could transition to an unsecured card. Not all customers will qualify.
- Earn 1.5% cash back on every purchase, every time. No annual cap and rewards don’t expire as long as your account remains open.
- Choose how to redeem your cash rewards – as a deposit into your Bank of America® checking or savings account, as a card statement credit or as a check mailed to you.
How to Apply.
You can apply for a Business Advantage Unlimited Cash Rewards Mastercard Secured Credit Card online, over the phone, or in-person at a Bank of America branch. When you apply, you must provide both your SSN and your EIN if your business has one. Bank of America will typically pull your personal credit report and business credit report. However, there is no minimum credit score, making it a great credit card for startup businesses.
Apply today and start establishing business credit!
On Another Note
If you’re ready to start building strong business credit scores, and would like the step-by-step guide to fast-track your success, check out our Business Credit Guide to get your business credit on the right track!
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