Choosing a Business Credit Card If You Have Poor Credit History

Choosing a business credit card if you have poor credit history can be daunting. Read this guide to learn how to make this easy for you.
business credit card if you have poor credit history

Many people are in the unfortunate position of having a less-than-ideal credit score while still wanting to apply for a credit card in order to fund their latest business brainwave. All is not lost if you want a business credit card if you have poor credit history.

If this sounds like you, you’re in luck! The following tips on choosing a credit card will ensure that you get a good deal and can follow your entrepreneurial dreams without being held back by your poor credit history.

Opt for an Unsecured Credit Card

You might have assumed that anyone with black marks on their credit report wouldn’t be able to get a new card without putting down a deposit to act as collateral.

The good news is that you can actually find providers willing to offer guaranteed credit card approval with no deposit whatsoever.

Better yet, you can check to see if you’re eligible for approval before a hard credit check is run against you, which will ensure that you don’t do even more damage to your score just by applying.

Bear in mind that there are usually a few caveats that apply to unsecured credit cards, such as needing to pay an annual fee to keep the account open, even if you don’t use the available credit. Read the terms and conditions carefully to ensure you’re happy with everything.

Choose a Card That Lets You Track Your Spending

Having a separate credit card for business use is very convenient when it comes to things like recording expenses and filing tax returns.

However, unless you are tuned into the amount you’re using the card you procure, it’s all too easy for your spending to climb up and for your limit to be reached without you realizing it until it’s too late.

That’s why it’s a good idea to pick a credit card from a provider that has a mobile app available to customers, with automatic spending alerts and advanced tracking features included.

This is doubly important if you are not the only one who will be using the credit card. If it will be available to other employees of your business, it helps to have a central means of getting an overview of spending patterns to avoid nasty shocks.

Consider Balance Transfer Options

If you’ve already got a credit card associated with your business that has an outstanding balance still left to pay, applying for another card might not be the best move.

One way around this is to choose a new card deal that lets you transfer over the balance of your existing card and close the original account as a result.

This can even be used to consolidate several credit cards into a single, more manageable package. Often for people with poor credit histories, it’s all about putting them more in touch with their habits, and consolidation does just that.

Compare Interest Rates

The rates that apply to credit cards for people with imperfect repayment histories are unavoidably higher than those for customers who’ve got a clean track record to back them up.

However, that doesn’t mean you have to grin and bear whatever rate you’re offered by the first provider that will approve you. There can be a significant gulf between the amount of interest you’ll pay depending on the deal you select, so playing the field could save you a bundle.

Another choice to make at this point is whether you go for a card with a fixed rate or one with a variable rate.

With a fixed rate deal, you have a clear idea of how much interest you’ll pay on your balance each month, depending on the amount of use your card receives. With a variable rate deal, you could see lower minimum repayments if interest falls, but you’ll also be more exposed if there are rate rises, as there have been recently.

Be Responsible and Boost Your Score Over Time

Poor credit history isn’t something you should leave unaddressed, especially if you run a business. It could hamper you in more ways than simply making getting a credit card harder and more costly.

The best option for you is to make it a priority to use your credit card responsibly, keep up with repayments, and continue to pay down any other debts you owe.

By doing this, you will see your score creep steadily upwards over time, and you will be able to level out your finances, both personal and professional, with the right attitude and approach.

Wrapping Up

Choosing the right credit card can transform your business, and it is more than possible regardless of your credit history. By shopping around and comparing deals, as well as by considering the features offered by each provider beyond rates and credit limits, you’ll find what you need.

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