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Getting a business credit card when you have average credit isn't all that difficult since "average" these days falls solidly into the "good" credit range. Sure, you may not get some of the perks reserved for people with "excellent" credit, but chances are you'll qualify for a great card that can help you manage and grow your business.
If you fall somewhere slightly below average, though, finding a credit card that offers rewards, a low annual percentage rate, special sign-on bonuses or all of the above, can be challenging.
If that's you, we have some good news: You can probably still get a credit card that can help you manage your business expenses and, with responsible use, help you improve your credit score and qualify for a card with even better features.
First, let's take a look at what credit scores actually mean.
What is an 'average' credit score?
There are a lot of different credit scores out there, but all of them fall into two main categories: personal (consumer) credit scores and business credit scores. If you've established business credit and apply for a credit card, you may think your personal credit won't be a factor. The truth is, most creditors consider you personally responsible for your business credit card - you're essentially providing a personal guarantee for your business - so your personal credit is almost always checked.
Keep in mind, though, that while your personal credit is used to qualify for a business card, your new account may not be be reported to the personal credit bureaus, depending on the card. So, if you want to improve your personal credit, look for a card that reports to both the business and personal credit bureaus.
Business credit scores: There are several scoring models, but in general, business credit scores range from 1 to 100, with 80 and above being good, and 50 to 79 considered fair. Anything below 50 is usually considered bad. How much your business credit factors into qualifying for a business credit card depends on the creditor and sometimes even the credit bureaus they use to check your credit. Most likely, though, your personal credit will be the primary consideration.
Personal credit scores: Like business credit scores, there are a number of scoring models for personal credit, but in general, credit scores range from around 300 to 850 with tiers ranging from "bad" to "excellent." For commonly used FICO scores, those tiers break down like this:
Excellent Credit: 750+
Good Credit: 700-749
Fair Credit: 650-699
Poor Credit: 600-649
Bad Credit: below 600
In 2018, the "average" personal credit score among Americans hit an all-time high of 704, meaning the typical American has what is considered "good" personal credit. So how do the credit bureaus come up with these figures? Most consumer credit bureaus consider the same five major factors:
Amount of Debt You Owe
Length of Credit History
A mix of Credit Accounts
New Credit Inquiries
If you don't know your credit score - your business, personal or both - it's a good idea to check before applying for any credit cards or loans. Each application you make generates what's known as a "hard inquiry." The more of these you have, especially all at once, the more it can ding your credit score in the "New Credit Inquiries" category. So, check your score, then look for cards that people with your credit score typically qualify for.
As we said earlier, qualifying for a credit card with today's "average" credit score is pretty simple. But if you're skirting that average or are several points below it with a "fair" credit score, finding a good business credit card can be a little tougher. Here are some of our favorites that people with fair credit usually qualify for.
Capital One Spark Classic for Business
The Capital One Spark Classic for Business has a lot to offer small business owners whose credit could use a little work. First, there's no annual fee. Second, the Spark offers cash back rewards. It's just 1%, but it's cash back on every purchase you make for your business, with no minimum to redeem.
Keep in mind if you're going to carry a balance, the card comes with a variable APR on purchases of 24.74%, which is pretty high compared to cards for people with good or excellent credit. That could jump to 31.15% if you get behind on your payments.
Of course, if you're looking to build your credit and think you won't carry a balance too often, the Spark Classic is a great way to improve your credit history (and establish business credit) so you can graduate to higher-rewards cards with lower interest rates.
Keep in mind that this card will report your credit history to both business and personal credit bureaus, which can help improve your credit scores as long as you properly manage your balances and payments.
US Bank Business Leverage Visa Signature Card
The US Bank Business Leverage Visa Signature Card card offers cardmembers double points rewards for the things they buy most often, then 1x points on all other purchases. You'll automatically receive 2x points from the two categories in which you spend the most each month. Those categories include advertising, airlines, construction materials, auto rental, cable and TV providers, grocery stores, hotels and dozens of others. And, redemption of your rewards is flexible. You can choose to redeem your rewards as cash back, travel, gift cards and even merchandise.
Like the Spark, there's no sign-up bonus or introductory APR with this card, but you will earn an extra bonus point for every dollar spent in the first 365 days of card membership, up to 100,000 points. Like many other cards for fair credit, the Leverage card comes with a slightly higher variable APR of 18.74%. Still, that's pretty good for cards in this range.
There's an annual fee of $95 for this card, but it's waived the first year, and there's no additional charge for employee cards. There's also a foreign transaction fee of 2% or 3% depending upon the currency used in the transaction.
Also, US Bank reports to both consumer and business reporting bureaus, so you can improve or build both your personal and business credit with this card as long as you make on-time payments and don't run up your balance.
The Blue Business Plus Credit Card from American Express
If you're skirting the "good" credit score range and have a decent business score, the Blue Business Plus Credit Card from American Express may be worth looking into.
To start, you'll get a 0% introductory APR on purchases and balance transfers for 12 months. After that your APR will be a variable rate, currently 14.99% - 20.99%, based on your creditworthiness and other factors at the time you open your account.
On top of that, there's no annual fee and you'll earn earn double rewards points on everyday business purchases up to $50,000 every year with no category restrictions. You'll earn one point for every dollar spent after that.
What's really nice about the Blue Business Plus is you can handle large purchases with ease since the card allows you to go over your spending limit without having to get prior approval. Keep in mind, though, that the amount you can spend is not unlimited and adjusts with your use of the card, your payment history and other factors.
As with other American Express cards, your card use is reported only to business credit bureaus, so use of this card will neither help nor harm your personal credit, unless, of course, you fall seriously delinquent on payments.
Of course, if you're closer to the bottom of the "fair" credit range, you may want to consider a secured business credit card to help you improve your credit and ultimately qualify for a card with better features.
Wells Fargo Secured Business Credit Card
A secured credit card with cash back rewards? The Wells Fargo Secured Business Credit Card offers 1.5% cash back on your purchases, no foreign transaction fees, a credit line between $500 and $25,000 and an annual fee of just $25 per card.
And, while it's your money that creates your line of credit, you still need to make monthly payments as you would sith any other credit card. Carrying a balance will incur an interest rate charge of 11.25%. While that's well below the variable APR charged by a lot of unsecured credit cards, it amounts to you paying interest to use your own money, so it's best to pay off your monthly balances.
Best of all, Wells Fargo will periodically review your account and recent credit history and let you know when you may be able to upgrade to an unsecured business credit card.
Keep in mind, however, that your credit line is dependent upon how much money you deposit with the bank, so if you don't already have cash on hand, it may take some time for this card to really help you manage your business finances and build your credit.
The bottom line
Whatever card you end up choosing for your business, remember that timely payments and keeping your balances low are important to building a solid credit score. Check out this helpful guide to maintaining and improving your business credit scores for further information.
Editorial Disclosure: Inc. writes about products and services in this and other articles. These articles are editorially independent - that means the editors and reporters who research and write about these products are free of any influence of any marketing or sales departments. In other words, no one is telling our reporters or editors what to write or to include any particular positive or negative information about these products or services in the article. The article's content is entirely at the discretion of the reporter and editor. You will notice, however, that sometimes we include links to these products and services in the articles. When readers click on these links, and buy these products or services, Inc may be compensated. This e-commerce based advertising model - like every other ad on our article pages - has no impact on our editorial coverage. Reporters and editors don't add those links, nor will they manage them. This advertising model, like others you see on Inc, supports the independent journalism you find on this site.