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UPDATED: AUGUST 10, 2022
If you’re a new startup founder or small business owner, building your business credit score from scratch can be a challenge. You’re likely aware that having a good business credit score is the stepping stone for growing and expanding your business, and that banks and other credit lending institutions rely on this score as an indicator of your creditworthiness before deciding whether to extend you a business loan or line of credit.
One of the easiest and fastest ways for a business to build its credit score is by using a business credit card (not a personal credit card!). Using a credit card for everyday business expenses and making timely payments over time will help you build a strong credit history. However, for businesses starting anew or those with poor credit scores after some years in business, it can seem tricky to qualify for business credit cards with its myriad of financial requirements.
Remember that you need to build business credit with a small business credit card. You won't apply for a small business credit card with your personal credit score, as card issuers typically ask for your business's information and require that your business credit card only be used for business expenses. That's also something to keep in mind if you're planning on doling out employee cards: make sure those cardholders don't use the credit card for any personal expenses.
Not to worry — all it takes is finding the right business credit card that is suited to your business needs and current credit score.
A business credit card is a perfect credit builder for businesses that plan to grow in the future. It allows you to start with a smaller limit that you can use and pay off regularly. Over time, this business credit builder strategy will allow you to increase your limit, the number of cardholders in your company and the ways you use the card to pay for expenses.
Ideally, the best business credit cards give its users additional lines of credit, low fees, discounts and rewards. For businesses with an average credit rating that don’t quite qualify for the top of the line credit cards, the Capital One® Spark® Classic for Business is a great option.
The Capital One business credit card is designed with simplicity in mind and is one of the easiest credit cards to get if you have less than stellar poor or fair credit. The biggest drawback of this business credit card is its high yearly annual percentage rate (APR) of 26.99% (variable). In addition to this, CapitalOne has some mixed reviews with small business owners. Even so, the card has some pretty cool perks.
Here's all the good stuff about this business credit card.
Here are the not so great things about this credit card.
In place of Brex, may we suggest the Tillful Card? It pairs well with any bank account, although we’re partial to NorthOne and Nearside.
ℹ️ Need more info? Hop over to our business bank account guide.
If your business is a VC-backed startup, then Brex may still be a good fit for you. That said, we might be careful with a company that dropped such a large segment of their user base so quickly, especially in this economy (we're not alone here — lots of startups have been switching over to other providers).
Wanna proceed? The Brex business card (paid monthly) caters especially to startups, and doesn’t require you to guarantee the debt on the card.
Instead of approval hinging on your business credit score, its measure of creditworthiness depends on your cash balance, spending habits and investors. It also reports to credit bureaus, making it a potential great fit for new businesses with no credit.
Here's all the good stuff about this business credit card.
Here are the not so great things about this credit card.
This is a secured credit card for business owners who are able to afford a security deposit. The Wells Fargo Business Secured Credit Card will also help to build your business’s credit over a period of time which can help you qualify for an unsecured credit card in the future. If you are not able to get unsecured business credit, this card could work well for you. Some business owners do run into trouble with Wells Fargo and have beef with their service, but the card itself isn’t a bad choice if you’re just trying to get your foot in the door.
Here's all the good stuff about this business credit card.
Here are the not so great things about this credit card.
If rewards and cash back programs are a top priority for you, the Chase® Ink Business Unlimited® will likely be the business credit card of your choice. The best part about this card is its generous $750 sign-up bonus if you spend $7,500 in the first three months after account opening (as of the last update of this article). Since Chase reports your account activity to business credit bureaus, this card sets the perfect base for you to build your business credit history. This card also opens the portal to Chase Ultimate Rewards, which can compound your travel rewards, get you bonus points, give you access to credit card offers, and more.
Here's all the good stuff about this business credit card.
Here are the not so great things about this credit card.
This card could be another suitable option for businesses with no credit history that are looking for an appropriate business card to start their businesses. The main selling point of the Blue Business Cash™ Card from American Express is that it allows you to spend higher than your credit limit. The card’s Expanded Buying Power feature adjusts with your use of the card, your payment history, credit record, and other factors.
Though Expanded Buying Power is a nice perk, do keep in mind that high credit usage could lower your credit score. It’s also important to ensure your payment is made on or before it is due in order to build and maintain good credit.
Here's all the good stuff about this business credit card.
Here are the not so great things about this credit card.
If you’re brand new to business and to building business credit, then opening business accounts with stores you frequent will probably be easier and render better results than trying to apply for more “traditional” business credit cards right away. Since these accounts will have to be used for business expenses only, think about where you spend the most money for supplies, and other business goods.
The store card for Sam’s Club is a very popular option among new business owners. It’s a great choice because Sam’s Club carries a very wide array of products, from office furniture to appliances, food, and other essentials. Anecdotally speaking, many new businesses have luck getting approved for the Sam’s Club card.
Pretty much every small business owner needs gas! Most gas station companies offer business credit cards. Circle K is a popular choice, but you could also look into opening an account with Shell, Chevron, or whichever station is most convenient in your area. While getting a gas card won’t let you buy as many different types of things as say, a Sam’s Club card, it does help you establish a tradeline, which can help you build business credit (and later qualify for a traditional business credit card).
Here's all the good things about store cards at Sam's Club & Circle K.
Here are the not so great things about these store cards.
The AtoB card is designed specifically for fleets. It is primarily a fuel card, but can be “unlocked” to cover other costs associated with fleet maintenance, such as repairs. From their site, it’s unclear what the criteria for this would be. Keep in mind that “fleets” aren’t limited to trucking — if you have company vehicles that you use to run your business, then AtoB could help you financially manage that aspect of your business.
Here's all the good stuff about this card.
Here are the not so great things about this card.
CapitalOnTap is a good choice for a beginner unsecured credit card. It does a soft credit pull on your personal Experian score and doesn’t have very high requirements when it comes to your business credit history. The minimum requirements are at least six months in business and at least $2,500 per month in revenue.
Here's all the good stuff about this business credit card.
Here are the not so great things about this credit card.
Because who would we be if we didn’t push our pride and joy? We love Tillful Card for obvious reasons, but also because we built it with and for you. Tillful Card is a secured business credit card designed for business credit building. It reports to Experian (Equifax and Dun & Bradstreet coming soon) and has a minimum deposit of $500 (which you can raise over time with new deposits). The security deposit creates your credit line. There are no fees, and it’s ideal for new businesses. We definitely suggest pairing it with some store cards and/or vendor accounts so that you can properly round out your business credit file.
Here's all the good stuff about this business credit card.
Here are the not so great things about this credit card.
Overall, there are many great credit card options available in the market for startups and small business owners. The key is to look into multiple aspects of what the card has to offer to see if it can help you maximize rewards and meet your goals. This way you get a credit card tailored to your business needs while building a strong credit score. Once you choose the ideal card for your business, take care of your credit score by keeping your credit utilization down, maintaining good payment habits, and spending within your financial means.
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