There’s no way to live or function these days without a credit card, especially for a small business. A credit card is a lifeline for many–allowing them the luxury of getting what they need today and paying for it tomorrow. This isn’t an article to lecture you on how you should or shouldn’t use a credit card (although I will say I am of the school of belief that you should pay it off in full each month but I know this isn’t always possible for some).
Credit cards can allow your small business to get what they need today–supplies, marketing, and sometimes even pay employees. One of the drawbacks to owning a small business is that the income levels fluctuate from month to month–so this month you may only make $1,000 where you know next month you will make at least $10,000–this is an idea situation for using small business credit cards–but getting a small business credit card in the last 3 years, especially for a new small business, is just about as painful as going to the dentist.
Here’s a few simple yet effective tips for small businesses to try and secure a credit card–and I know they work because as a newer small business owner I had to fight to get credit but eventually won the battle:
- Downright Apply For A Card: It can only temporarily hurt your credit a little bit with an inquiry so if you have decent personal and corporate credit then go ahead and just apply for a card. It might help to do this with a bank that you have a long lasting relationship with, so when I first applied for a business card I went to Chase because I’ve been banking with them for years and have other cards with them.
- Go To The Appeals Department: If you do get denied, there is usually a credit operations or credit decision appeals department that you can speak to about the decision. Try calling them and asking what you can do to get the card–you would be surprised how helpful they actually can be and how easy it can be to get a card this way.
- Go To The Executive Office: If the appeals department doesn’t help, then try going to the corporate office and plead your case for being a good customer of the bank and explain why you feel they should extend a credit card to you. Usually they will find some way to get you a card with a low limit at first and then increase the limit over time.
- Maintain A High Balance: If you are applying for a card with your bank, try to have a relatively high balance in your account at the time you apply. By relatively high balance this means try to have at least $10,000 in your checking account at the time of applying for the card–this can make a big difference in their decision.
- Work With A Bank That You Personally Work With: As I mentioned before if you have been banking with Chase for years then go to Wells Fargo for a random credit card you have a lower chance of getting it–stick with a bank that you have an established history with and ideally stick with a community bank where they know you on a first name basis.
- Convert A Personal Card To Business: If all else fails, most banks will allow you to convert a personal credit card into a business card. This will give you the benefit of having a corporate card and building both personal and corporate credit as well as other features of having an actual business credit card.
I’m confident that if you have at least a semi decent credit score by following these tips you will be able to secure a credit card for your small business. Not only will a small business credit card be helpful for your day to day expenses, but you will also be building personal and corporate credit which may be extremely helpful down the road.