How Hard Is A Bad Credit Business Card?

The answer to the question how hard is a bad credit business card or how hard is it to get a business credit card with bad credit is it is very difficult.  Banks and other issuers of credit cards are tightening their standards with regards to all types of debt, including credit cards and are risk adverse when it comes to borrowers with bad credit.  A business owner that is seeking to acquire a credit card for their business needs should look into alternatives such as secured credit and debit cards and low balance cards.

Understanding the Impact of Credit Scores

A business should seek ways to raise their credit scores in terms of their FICO for personal credit and DUNS for business. These credit ratings are used by lenders to determine credit worthy and with a near collapse of the banking and financial system in 2008, a near perfect credit rating is required in order to obtain a credit card.

Credit CARD Act of 2009

The requirements for receiving a business credit card have gotten more stringent with the passage of the Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit CARD Act), credit card issuers are even less inclined to extend credit terms to bad credit cardholders.  

Use of a Co-Signer

Using a third-party guarantor or co-signer may help increase an applicant’s chances of being approved for a bad credit business card as well as setting up an escrow or guaranty account that secures a requested balance.  Debit cards are an idea since they can only draw on an available balance and are difficult to run a negative balance on.  

The Need for Business Credit Cards

The need for a Visa or MasterCard logoed card to make purchases for the business, schedule business travel and accommodations and conduct other business affairs requires a business owner with bad credit to become creative in their efforts to acquire a bad credit business card.  Working on improving credit, lowering credit requirements and securing as much debt as possible are all possible solutions to this dilemma with the understanding that it is ultimately the decision of the issuer whether or not to issue a card.

Be leery of online offers and promises to give a card regardless of credit history.  These offers can be suspect and lead to a worsening of a business owner’s credit situation, not improvement.  A business owner that has established a good relationship with a bank or lending institution that issues credit cards may be able to work with the institution to obtain some form of a business card with an arrangement to work on the outstanding debts and credit issues of the bad credit business owner.