Secured Business Credit Cards

There are many situations when an entrepreneur finds that secured business credit cards are the best way to either build or establish credit. According to financial experts, many business owners use their own personal line of credit for business needs. This has many dangers and risks as if the company defaults on a loan or fails to thrive, not only does the business establish negative credit, but personal credit scores suffer as well. It is recommended that all business owners build a separate line of business credit in order to keep their personal credit safe from potential negative impacts. Unfortunately, establishing business credit may be more difficult than expected and for those who aren’t being approved, choosing a secured credit card is a good solution.

Secured business credit cards enable the borrower to establish their own line of credit by controlling how much they put on the account. These cards differ from unsecured as those cards do not require you to fund your line of credit. After a consumer maintains a secured credit card for a period of time without missing any monthly payments, the credit card company may choose to upgrade the account to unsecured. There are many reasons why business owners should apply for a secured card. Those with insufficient credit history, a low credit score or those who have suffered financial setbacks throughout their business endeavors may need to repair their credit. It can be difficult to rebuild or repair business credit without a credit card and for many, a secured card is the easiest and fastest way to see your business credit rise for poor to best.

There are many reasons why businesses need credit cards, and they are a primary source for those who need to purchase business expenses and equipment. Credit cards also allow businesses to easily track their purchases and many companies prefer to use credit rather than cash to keep their business flowing. Credit allows entrepreneurs to make large scale purchases without needing to shell out cash up front. Those who choose to use secured business credit cards responsibly and wisely will find that their credit scores will rise, their secured cards will convert to unsecured cards and they can establish a line of credit that will be key to their business success.

When choosing secured business credit cards keep in mind that these cards come with associated fees. You must read through the cards terms and services in order to determine what fees are applicable. The most common type of fee includes annual fees and application fees. Additionally, secured credit cards have higher interest rates so you must be prepared for these and ensure that you can afford the expense of the card. Those who may have bad credit or simply haven’t established a credit history may find that secured credit cards are the best choice as they allow you build your business credit quickly and easily.

Those who choose secured business credit cards may find that they receive additional perks and benefits than they would enjoy with a traditional card. Business cards have different perks than standard credit cards and just because your card is secured doesn’t mean you’ll have to bypass these benefits. Some of the benefits include travel and rental insurance, protections for your business card from unauthorized transactions, theft and damage, extended warranties on purchases related to your business, and protection from overdrafts.

It’s important to remember that if you already have good personal credit, it may be easier to get a business credit card than you think. Speak to your bank or financial institution about establishing a business line of credit and apply for a credit card. If, however, you are continually denied for a business card, then apply for a secured business credit card. Though it is possible that a secured credit card will deny your application, there is a great chance that your application will be approved.

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