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If you're having difficulty securing a business credit card, then it's probably not you, it's your credit. Credit card companies designate a certain credit rating or score for its business credit card holders. The good news is you don't have to have excellent or good credit to get a business credit card. There are cards for people with fair credit.

If you have fair to poor credit, don't despair. You can find a business credit card to help you fund purchases for your business. In addition, securing a credit card specifically for borrowers with fair to poor credit can help you repair your credit.

Differences Between Business & Personal Credit Cards

While personal and business credit cards are much the same, there are some differences. One of the main differences is that, often, a business credit card is linked to your personal finances and credit score.

Your Business and Personal Credit Become Intertwined. Many credit card companies will ask you to sign a personal guarantee before they extend you credit. By signing this guarantee, you pledge to be personally financially responsible for your business's debts. Further, if your business declares bankruptcy, depending on the type of business entity you have, you may or may not be responsible for the business's debts. For example, if you set up a sole proprietorship or general partnership, you are responsible for all of the business's debts. If you set up a limited partnership, limited liability company, or corporation, you're not legally responsible for the card.

Credit Cards for Employees: Monitor Closely. Another difference with business credit cards is that you can issue cards to your employees for business expenses. Make sure your card company provides online tools to track employee spending. Also, ask the credit card company if it can cap the employee's credit limit to keep your finances in check.

Business Credit Cards for Consumers with Fair Credit

If you have fair or average credit, your credit score is likely 550 to 639. There are several cards that cater to this credit range. Two good choices are the Capital One Spark Classic for Business and OnDeck.

Another card you may qualify for, if your credit is closer to good than fair, is the SimplyCash Plus Business Credit Card from American Express. It is for people with a credit score of 640 and higher.

The Catch
While there are companies that will accept your credit rating and issue your business a line of credit, there are some catches, and you may not like them.

Higher APRS and Fees. Some companies charge a higher annual percentage rate (APR) to borrowers with poor credit. The best way to avoid paying a higher APR is to pay your balance in full each month. Not only will you avoid the higher interest, but you will help increase your business's credit score and your own (if you were the personal guarantor for the card). In addition to paying a higher APR, you can expect to pay a fee each year for your card. The typical annual fee can be $75, though some companies charge less, others more.

Spending Limits. Many business credit cards don't come with a spending limit, or the amount you can borrow against. But this doesn't hold true for borrowers with fair or poor credit. It's not unusual for some spending limits to be below $500. In fact, you may find that the credit limit is so low it offers little benefit after you factor in the fees. For example, if the credit card company only gives you a $200 line of credit and charges you a $150 annual fee, it may not be worth the trouble for $50 of credit.

Other Catches. When shopping for a business credit card, read the terms and conditions carefully. There may be other fees and penalties you have to pay; for example, if you make a late payment. Be aware, too, that consumer protection laws, such as the Credit CARD Act of 2009, typically don't protect business owners like they do individuals. This means your terms and fees can change or be much higher than with personal credit cards.

Just because you have fair credit, doesn't mean you're locked out when it comes to getting a credit card for your business. However, there are some important considerations you should be aware of that can have a big impact to you personally. Therefore, it pays to do your research and to shop around.

When choosing a business credit card, especially if you have fair credit, make sure to review the card's terms, including the spending limit, APR and fees, before you apply. You may find you're better off waiting to apply until your credit is better.

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