The best prepaid business credit cards in 2022

The best prepaid business credit cards in 2022

The term prepaid business credit cards can be used to describe any credit card for business owners that requires funds to be prepaid before they can be used. Unlike most standard credit cards, these cards do not require a good or excellent credit rating. This makes these cards useful for small business owners who have a limited credit history and those who have had significant credit issues.

Just like other business credit cards, prepaid business credit cards are ideal for paying business expenses and employee expenses. However, these cards will have spending limits based on the amount you have prepaid.

How do prepaid business credit cards work?

There are two types of prepaid business credit cards. First, there are secured cards which require the payment of a refundable security deposit before an account can be opened. After that, these cards work like standard unsecured cards because you make purchases normally and have to make a minimum payment each month. When used responsibly, secured credit cards allow account holders to add to their positive credit history and improve their credit score. At the same time, secured credit cards offer a convenient and reliable method of payment, just like any other credit card.

The other type of prepaid business credit card gives you the option of placing money on deposit, which is used to pay your credit card. These new types of prepaid business credit cards differ from secured cards in that when you make a purchase, the funds you have on deposit are automatically used to pay the charges. These types of cards can also be a great way to establish business credit because these cards report your balance and payment history to business credit bureaus, rather than consumer credit bureaus. And like secured credit cards, these cards don’t require a strong credit history, and some don’t even require a personal credit check at all.

Keep in mind that prepaid business credit cards are not business loans. So if you need financing for your business, it’s best to look elsewhere.

Best Prepaid Business Credit Cards

Divvy Credit Creator for Business

the Divvy Credit Creator for Business is a credit card that does not require your personal credit check and automatically debits your account to pay the fees. But Divvy isn’t just a prepaid business credit card, it’s also an expense and expense management platform for businesses. The company provides funding for startups and small businesses as well as tools to manage budgets and expense reports. the Divvy Credit Creator for Business is part of the Visa payment network and can be used for payment anywhere Visa credit cards are accepted.

the Divvy Credit Creator for Business The program builds business credit and does not require a personal credit history or personal repayment guarantee. Instead, businesses pre-fund their line of credit and can then spend up to that amount. Divvy Credit Creator for Business accounts can be pre-funded via wire transfer or ACH from your checking account or business bank account. Or, you can fund it directly through the payment portal on your Divvy dashboard (this may be subject to a 4 day hold). Divvy also offers virtual cards and free employee cards.

There are $0 annual fee for this card. All charges made on this payment card are due and payable when you receive your periodic statement.

Citi® Secured Mastercard®

While the Citi® Secured Mastercard® isn’t just a small business card, it’s still a valuable secure card you can use to make business purchases and build your personal credit. This card, which is marketed to consumers, is available to new applicants with virtually any credit profile. But you must submit a refundable security deposit of at least $200 before your account can be opened.

You can also submit a deposit of up to $2,500, and the amount you submit becomes your credit limit. Then this card works like any other credit card. In fact, it doesn’t even say “secure” on the card, so retailers won’t know it’s not a standard credit card. You can use this card to make purchases anywhere Mastercard is accepted. This card will transmit your balance and payment information to the major consumer credit bureaus. With an on-time payment record, you will establish your positive credit history and increase your credit score. This is a relatively simple card that offers no cash back and $0 annual subscription. This card has a 3% foreign transaction fee imposed on international transactions.

How to qualify for a prepaid business credit card

Luckily, you don’t have to do much to qualify for a prepaid business card. These cards are open to almost anyone, regardless of your credit issues or credit history. In most cases, you will just need to prove your identity and not have a pending bankruptcy or foreclosure. And while you may have weak or bad credit, you shouldn’t have accounts that are currently delinquent or in default.

What you need to apply for a prepaid business credit card

First, you will need to provide your personal information such as your address, date of birth, and Social Security Number (SSN) or Employer Identification Number (EIN). You will also need to provide other information such as your company name, job title, phone number, and number of employees. The application may also ask if you are incorporated and what your position is in the company. For most small businesses, the applicant position will be the owner. You may also be asked to provide forecasts of your company’s revenues, expenses and profits. Some prepaid card issuers also require you to link your card to a checking account.

Alternatives to Prepaid Business Credit Cards

There are several alternatives to prepaid business credit cards. First, you might consider a business credit card for fair credit. There are several cards offered for those who have had credit problems, but do not have bad credit. These cards will have higher standard interest rates than cards designed for those with good or excellent credit, and they will offer modest rewards such as cash back. But they are good cards to have to build up credit without having to post a deposit. And as your personal credit improves, you may qualify for a business credit card that requires no prepayment.

Another alternative is to use a personal card for business purposes. These cards will not offer business features such as expense tracking, reporting, and QuickBooks integration. But there is a wide selection of subprime and secured cards available for personal use. Some even include benefits such as purchase protection and travel insurance. However, you should expect that the subprime cards available for those with credit problems will also have high interest rates and fees.

Then there are other types of prepaid cards, including prepaid business debit cards. These cards do not require any personal credit history or even a credit check. And with these cards, there’s no way to help or hurt your credit score. You simply deposit funds and make purchases up to the amount of those funds. This is similar to the debit cards offered by most checking and savings accounts. Like these cards issued to bank account holders, many prepaid debit cards can also be used at ATMs. And because these cards are reloadable, you can add funds as needed. Many even accept money by direct deposit from your bank account. The downside is that many prepaid debit cards come with fees like monthly fees, ATM fees, and maybe even transaction fees.

Conclusion

Just because you don’t have good or excellent credit doesn’t mean you can’t use a credit card for your business. In fact, there’s never been a better time to look into the various prepaid credit card offers for business and personal use. By finding the product that best suits your needs, you can be sure that your business has access to a secure and convenient payment method, and potentially a payment method that can help you build your business and personal credit at the same time. time.

This article was originally written on March 31, 2022 and updated on April 1, 2022.

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