Secured Credit Cards for Business

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This is an account from a business owner that I spoke to that gave me some tips on how he was able to get a secure credit card for his business so he could rebuild his credit. He was concerned because he had heard how important credit was for starting a business, but he wanted to create financial independence. This is his experience with secured credit cards for business:

I was going to buy media for my internet marketing business, but I was nervous because I had several occurrences where I had destroyed my credit. Some of these reasons were my fault and others were circumstances that I couldn’t control. I had gone through a bad divorce that had taken a toll on my credit.

So now I knew what I had to accomplish with my business, but I was scared of where to go to find a card that would accept me. I had some funds to help me get my business going, but I realized that I was going to need to leverage on a grander scale. It was going to require more leveraging and being able to exercise what little credit I had.

I realized that this was going to take some good credit history to replace previous mistakes. I knew that there was going to be forgiveness, but I had to prove myself to credit bureaus. I realized that a prepaid credit was a decent option. I searched around and found a company that offered secured credit cards for business. This company seemed legitimate and wasn’t requiring me to pay an arm and a leg with fees and phone minutes to sign up.

I was even more pleased as they asked me for my credit report to find out how my credit history was. This was assuring to me because it showed that they were serious about what they offered and I found out they would report often to credit bureaus about my new established history.

This became a dream come true because I could leave a larger deposit and receive a larger credit limit. I started using the line of credit often and made payments on time. Some times I would make more than one payment a month. It didn’t take long for my credit to be flipped around. Now my credit is well over 700 after being in the pits and I am able to get unsecured credit cards in a matter of months. I am going to try to build my credit more so I can get larger limits. I used to be scared about credit cards after I had bad experiences. Now I have been able to turn it around into my favor and use it to better my life.

Secured credit cards for business can be so beneficial for people with struggling credit. I like to think of it as almost paper trading, or maybe trading on a contract that is only 5 dollars. It is a conservative way to exercise your ability to use credit correctly. After a while you will learn how to use it wisely and be able to adjust it to become one of your strengths and not your weakness.

Apply for Secured Credit Cards

A couple of years ago my little brother crashed his car and needed to buy a new one. He wasn’t looking to get anything too expensive or brand new, but he didn’t have the cash for a car. He was going to have to get a loan. Only one problem, right? He didn’t have the credit history to get approved for the loan, no matter how small it was. He had to have my parents co-sign the loan with him. Both he and my brother in law should have looked to apply for secured credit cards as a way of building their credit history.

My brother in law went through the same thing. The weird thing was he actually makes decent money and had a nice chunk of cash in the bank. He went to apply for a loan, and they wouldn’t approve him for anything. The only option they gave him was to put some of his cash in an account and they’d let him borrow enough money for the new car. I’m thinking – why would I give you the cash so I can borrow some money? Why not just pay cash for the car?

Both of these guys were in the same situation, they didn’t have enough credit history to get approved for the loans they needed. How do you get that history? You need to open lines of credit.

It’s like the old saying about getting a job – you can’t get a job without experience, but you can’t get experience without a job. The solution to the problem in the professional world is to get yourself an internship. You work for free for a while to get yourself some experience. The employer doesn’t have to risk much because you’re not getting paid, but it’s worth it for you because you’re getting the experience people are going to look for when you interview in the future.

In the world of credit cards, the internships you get are called secured credit cards. Since you don’t have the experience (credit history) that makes them feel safe giving you a credit card, you have to minimize their risk.

The solution here is that you apply for a secured credit card. Basically you’re putting down some money – giving it to the credit card provider as collateral just in case you decide not to make your payments. They know they can use your deposit to cover unpaid balances (but you won’t leave those balances unpaid, will you?), and while you’re making payments they’re sending good reports about you to the credit bureaus.

Of course, while you’re doing your credit card internship, make sure you apply for low interest secured credit cards. There’s no reason to pay a bunch of interest while you’re establishing yourself as an experienced credit user. Eventually you’ll have enough ‘on the job experience’ so credit card companies will give you the credit cards you want. Just make sure you use them wisely…