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A secured credit card is another option for building business credit if your business has a limited or poor credit history. Over time, the credit you build using a secured card can allow you to access unsecured credit cards and other forms of lending.

Here’s everything you need to know about secured business credit cards.

The deposit on a secured credit card acts as collateral for the card issuer, reducing their risk in case of missed payments. Just like with an unsecured business credit card, a secured credit card allows you to build business credit. This can be especially helpful for small businesses looking to separate personal and business finances while building the creditworthiness of their business.

Benefits of a secured business credit card

A secured business credit card has a number of benefits:

  • Using a secured loan or credit card can rebuild business credit over time.
  • Startups and small businesses may not have a sufficient credit history, so using secured credit cards can help establish a credit history.
  • Employees may be added to the account to make purchases for the business.
  • Similar to regular business credit cards, secured cards may have rewards.

Can you use a secured business credit card for personal use?

While it's not illegal to use a secured business credit card for personal expenses, it will likely violate the terms and conditions of your card agreement. This can come with some serious consequences, like penalties, the loss of certain benefits like reward points earned on business expenses, or cancellation of the card.

Moreover, in the case of an LLC or a corporation, using a business credit card for personal expenses can undermine the legal separation between the business and the individual. This separation is crucial for maintaining limited liability status, and breaching it could expose personal assets to business liabilities.

How to get a secured business credit card

Here are the typical steps to apply for a business credit card:

  1. Find the lender offering the card with the best terms for your business.
  2. Look for cards with no annual fees, rewards, and relatively low APR or 0% introductory APR.
  3. Make sure the card issuer reports to business credit bureaus like Experian Business, Equifax Small Business, and Dun & Bradstreet so that your business credit will be built.
  4. Apply online or in person for the credit card you’ve chosen.
  5. Make the required deposit for the card’s collateral.
  6. Start paying your balances and building your credit.

Your credit score will gradually increase as long as you pay your balance in full every month, on time. Then, you can upgrade to an unsecured credit card.

Building your business credit with the Ramp business charge card

You may struggle to get approved for traditional credit cards if you have limited or poor credit. However, your business has other options.

Ramp is a corporate charge that qualifies based on factors like your business's revenue and capital in the bank—not your credit score. If you're an e-commerce business, you may qualify for our sales-based underwriting.

Here's what to expect with a Ramp card:

  • Get rewards such as unlimited 1.5% cash back on all cards.
  • Get approval for higher limits than traditional cards.
  • Use first-class software to integrate your accounting workflows.
  • Ramp gives you 5-in-1 software: cards, expenses, bills, accounting, and reporting in one.

Ramp can have your business earning rewards and building credit in minutes. Contact us today to get started.

Get started today.
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Finance Writer, Ramp
Richard Moy has written extensively about procurement and vendor management topics for companies like BetterCloud, Stack Overflow, and Ramp. His writing has also appeared in The Muse, Business Insider, Fast Company, Mashable, Lifehacker, and more.
Ramp is dedicated to helping businesses of all sizes make informed decisions. We adhere to strict editorial guidelines to ensure that our content meets and maintains our high standards.


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