Startup Business Credit Cards With No Credit – Buyer’s GuideChoosing a startup business credit card can be challenging and overwhelming for a variety of reasons. For example, you may not be familiar with your options, or you’re not sure which card offers the best features for the long term. Our buyer’s guide will help you overcome your concerns. Show
How to Choose the Right No Credit Business Credit Card for Your StartupWhen choosing the best credit card for your business, you should consider the following five factors.
Credit-building options allow you to establish a good payment history. To do so, you need to pay on time and in full. You also need to lower your credit utilization ratio—the amount you currently owe divided by your credit limit. Your best options are card issuers, who report to major credit bureaus, create your credit report, and give you your credit score. The three major credit bureaus in the US include Experian, Equifax, and TransUnion.
Credit cards for new businesses with no credit history often offer bonuses, rewards, and deals that incentivize your business expenses. Bonuses from different card issuers aren’t inherently better or worse than one another; their usefulness depends on your card transactions. For instance, the best business credit cards for travel offer huge bonuses when you use them for travel-related expenses (hotels, flight booking, transportation, gas). While these cards’ bonuses are best for frequent flyers, they might not be helpful if you don’t travel much.
Credit cards for small businesses with no credit usually charge various fees that you must pay to enjoy their features, including the annual fee, regular APR fee, foreign transaction fee, and balance transaction fee. Others charge situation-based costs, such as penalty fee, late fee, and cash advance fees. Different cards charge various rates. So it’s essential to compare which ones have the most reasonable costs. Some look cheap but offer minimal rewards, while others provide excellent rewards with equally high costs. Still, others offer great rewards and affordable fees but aren’t always available to businesses with no credit history. In other words, your card should strike a balance between helpfulness and cost-efficiency.
Besides bonus categories, business credit cards for new businesses with no credit also offer rewards based on your account type and card transactions. One card might offer a generous signup bonus when you spend a certain amount during a specific period. Others let you earn points to redeem such rewards as hotel discounts, loyalty financing, etc. Additionally, business credit cards also offer features like fraud monitoring and damage or theft insurance coverage. As a result, your choice of the business card depends on which rewards are more beneficial for your business and card transactions.
How to get a business credit card with no credit involves, of course, the application process. First, you must provide personal and business information and fill out the forms they request. Afterward, you wait for the card issuers to either reject or deny your application. How to Obtain a Startup Credit Card With No CreditThe best business credit cards for startups are easy to find if you know where to look. But if you have no credit, it can be challenging. Consider the following four points to find the best card.
A secured business credit card is meant for those with little to no personal credit history. It’s also ideal for those with poor credit scores. If you default, it requires a refundable deposit that serves as your credit limit and the issuer’s collateral. Using secured business cards responsibly can establish a positive history and build a better credit rating. As with all corporate credit cards, a secured business credit card should be used only for business purchases.
To acquire new business credit cards with no credit history, you can assign someone as a co-signer. This person serves as a guarantor for your credit; if you default, the co-signer will take responsibility to pay your debt. Card issuers require your co-signer to have a better credit score than you and a stable income. If you have a business partner with a better credit standing, you can use them as your co-signer to acquire the business credit card.
As a business owner, you should have a separate credit card for business transactions. In this way, your personal and business expenses won’t get mixed up:
While keeping your business account from your personal account separate is a good idea, you only need one business credit card to accommodate your business transactions. Technically, you can apply for more than one business credit card. But it will be inconvenient if you cannot keep track of your business expenses. You also might miss or confuse due dates. Creating a Credit History With a Credit CardCredit cards are ideal credit history-building tools, and the way you use them largely determines whether your credit score is good or bad. Unfortunately, business credit cards for no-credit startups won’t help if you keep missing payments and maxing out your balance. A credit card can help build your creditworthiness when you:
Your payment history is the most significant factor that affects your credit score. As such, make at least the minimum payment each month. If you miss a due date as a cardholder, you’ll be charged a fee. Once your payment exceeds 30 days past due, the card issuer can report your late payment to the credit bureau—a record that stays on your credit report for up to seven years. You can set up autopay on your card to avoid missed payments.
Startup business credit cards with no credit give you a chance to use credit to establish your business. But it doesn’t mean you’ll use it for everything. If you do so, your credit utilization ratio will go up, which isn’t good on your credit report. To maintain a low utilization rate, limit your card usage, especially when your credit limit is low. While there’s no hard and fast rule for the perfect credit utilization rate, the general rule of thumb is to keep the ratio below 10% to achieve the best credit scores.
While it’s tempting to apply for a business credit card with no credit history multiple times, it’s not advisable to do it often. Card applications can cause temporary drops on what little credit score you have. In addition, doing it multiple times and with close intervals to each other results in significant damage to your performance. If you must do it, make your applications with about six months of an interval in between.
If you already have multiple startup business credit cards, keep them open. Don’t touch the account unless you have a genuinely critical reason to close an account. Even if you have a serious issue with it (e.g., high annual fee, poor customer support), try downgrading the account or transferring your credit to another card. Closing an account can hurt your credit utilization ratio and decrease your average account age, reflected in your credit history.
Since your credit report affects many aspects of your financial life, it’s best to check it regularly for any errors or discrepancies. You can acquire small business credit cards with no credit check if you’re lucky, but that’s rare. As such, take advantage of the major credit bureaus free annual credit reports. If you play your cards right, you can receive a free credit history report from one credit bureau each quarter. If you see any errors or questionable transactions you didn’t make, dispute them immediately and find ways to correct them. Such records (if legit) stay on your report for years. Startup Business Credit Cards at a Glance
ConclusionStartup business credit cards with no credit are an excellent way to build a great payment history and credit score for your business. This opens up many opportunities for your business’s finances. Finding the suitable business credit card for your startup begins with vetting which card has the best credit-building options, bonuses, and rewards. Comparing fees and rates is also critical to get the most out of your chosen credit car Can you get business credit without personal credit?A corporate credit card allows business credit without a personal guarantee because the company is liable for the debt. While using a corporate card can work in some situations, not all businesses will qualify for one. It may not be a feasible option for startups or if you're a business owner and not an employee.
How can I get a business credit card if my personal credit is bad?If bad personal credit keeps you from getting approved for traditional small business credit cards, a secured card may be the next best thing. Secured cards require a cash deposit that doubles as your credit line. Like vendor trade lines, make sure the card you're opening reports to the business credit bureaus.
Does a business credit card require a credit check?Applying for your first business credit card will trigger a hard credit inquiry on your personal credit, which could lower your score by a few points. And lenders might continue to conduct personal credit inquiries when you apply for additional small-business credit cards or small business loans.
Is a business credit card based on personal credit?That's because card issuers typically rely on your personal credit for approval, even on business cards. Most also require a personal guarantee that says you'll repay the debt if your business fails, so your personal credit history helps issuers assess their risk.
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Startup business credit cards with no personal credit check
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