Some people think secured credit cards are for people who just cant get any other financing. While it’s true that individuals with less than perfect credit can still get a secured credit card, many secured options offer just as many benefits as traditional cards and should not be over looked as a valuable form of business credit.
If your business is just starting, it won’t have a credit history. It’s very much like a teenager who has just graduated high school- it can be difficult to get a credit card because you haven’t yet established credit worthiness. So if you’re a business owner, you should not rule out the secured card option when it comes to applying for business credit cards.
The idea of secured credit cards is that you put something up for collateral, typically you make a deposit, against the use of your credit card. Once you do that, you are provided with the power of a credit card having either the Visa or MasterCard logo and all the spending power you would expect from either card issuer. Your payments will be reported to the credit bureaus in the same way that they would be reported for unsecured credit cards. This is how secured card options can help you start establishing and building a strong credit reputation that helps you get other types of financing in the future.
If you decide to get a secured business credit card, make sure you shop around. Some secured card companies will charge ridiculous annual fees and interest rates- but not all. So take the time to find a reasonable offer and use that to build your credit.
When you shop with a secured credit card, there is absolutely no difference to the merchants. No one will be able to tell that your card is secured rather than a traditional credit card. You and the credit issuer will be the only people who know the real truth behind the credit card!
A Secured Stepping Stone to the Future
When you consider using a secured business credit card, just keep it in mind that it’s temporary. As you establish a good credit rating by making your payments on time with your secured card, you’ll soon be able to apply for and get approved for other financing, including loans or unsecured credit cards. Having a secured card when you first start a business is a gteat way to give the business it’s own credit right from the start- so that a year or so down the line, when you’re ready to grow the business but require financing to do so, you’ll have the credit score and positive credit history to help you do so.