Small business credit cards without a personal guarantee are very rare. A representative of the company almost always has to agree to personally pay any balances the business cannot. Large corporations with tens of millions of dollars in annual revenue can get corporate credit card accounts using their assets as collateral. And there are a handful of outliers available to smaller companies, half of which work only at specific gas station chains. But most small business owners will have to give their personal guarantee to get a business credit card. When you apply for most major business credit cards, you will have to list your own Social Security number as well as your company’s Tax Identification Number. The terms and conditions will state that both you and your business are liable for balances. And the issuer will review your credit history, as well as that of your company, before making a decision.
All major banks and credit unions have those same policies, according to WalletHub’s research. But they differ in some other important areas. For example, most credit card companies retain the right to raise the interest rate on a business card’s total balance at any time. Only Bank of America and Barclays have adopted the personal card rule against doing so until payment is at least 60 days late.
Below, you can learn more about why business credit cards with no personal guarantee aren’t widely available. We’ll also highlight the best business credit cards to apply for right now and give you some tips for how to reduce your personal risk when using them.
No Personal Guarantee Business Credit Card Options
There are just a handful of credit cards on the market that don’t require a personal guarantee. Most credit issuers naturally want to know that someone will be held responsible if a business defaults. The only way to escape this requirement is to have a business that makes a lot of money, or to get a credit card that can only be used for gas purchases.
Here are the no personal guarantee business credit cards:
- Sam’s Club Business Credit Card: There are two versions of this card, a Mastercard and a version that can only be used at Sam’s Club and Walmart. But there’s just one application, and it suggests providing a personal guarantee if your company has less than $5 million in annual revenue, fewer than 10 employees or less than two years in operation.
- Bremer Visa Signature Business Company Card: You can use this credit card anywhere. But your business must be based in Minnesota, Wisconsin or North Dakota. Your business must have also made at least $1 million per year for the past two years to be eligible for no personal guarantee.
- SuperAmerica Fleet Card: This card can only be used for gas from SuperAmerica. It’s mainly for businesses that have their own trucks to send out on deliveries. If your company has been open for at least three years, SuperAmerica won’t ask you for a personal guarantee.
- Shell Small Business Card: You can only buy Shell gas with this credit card. It does not require a personal guarantee if your business has been open for at least 3 years and has more than $1 million in sales per year. Non-profits don’t need to provide one, either.
It’s generally pretty easy to tell whether a small business credit card requires a personal guarantee. Just search the terms and conditions for the word “liable.” Most cards’ terms will include language noting that both the business and the individual applying for the card on behalf of the business are liable for transactions.
Why Aren’t There More Business Credit Cards Without a Personal Guarantee?
There aren’t many small business credit cards without a personal guarantee because credit card companies consider a business owner’s company and personal finances to be fundamentally intermingled. In other words, they’re so closely connected that they’re basically one and the same. There are stats to back that up, too.
- One-third of businesses fail within two years, and half don’t make it five years.
- Personal savings are the top source of start-up capital, used by nearly 6 in 10 companies.
- 8% of start-ups use personal credit cards for financing, versus just 2% using business credit cards.
Source: U.S. Small Business Administration
In the end, it’s a question of both trustworthiness and responsibility. A credit card issuer doesn’t want to be stuck with the debt if a company defaults on its payments and goes under. Having one person who will be legally responsible for paying them back adds a level of security.
Plus, people typically have longer credit histories than the businesses they create. So taking personal credit into account can help an issuer better predict how the owner will manage the company’s finances.
2020’s Best Business Credit Cards With a Personal Guarantee
Capital One® Spark® Cash for Business
Ink Business Preferred® Credit Card
Business Advantage Cash Rewards Credit Card
Radisson Business Credit Card
|Annual Fee||$0 for 1st yr, $95 after||$95||$0||$60|
|Rewards Bonus||$500||100,000 points||$300||85,000 points|
|Rewards Rate||2% Cash Back||1 - 3 points / $1||1 - 3% Cash Back||5 - 10 points / $1|
|Purchase Intro APR||N/A||N/A||0% for 9 months||N/A|
|Transfer Intro APR||N/A||N/A||N/A||N/A|
|Regular APR||20.99% (V)||15.99% - 20.99% (V)||12.24% - 22.24% (V)||16.24% - 25.24% (V)|
|Editors' Rating||5.0 / 5||5.0 / 5||N/A||N/A|
|Details, Rates & Fees||Learn More||Learn More||Learn More||Learn More|
Rates & Fees
All of these cards require good or excellent personal credit for approval. You can check your latest credit score for free on WalletHub. And if you don’t have the good credit or better required for one of the best business credit cards, there are some options for small business owners with fair, limited or bad credit to consider, too.
How to Minimize Personal Liability With a Business Credit Card
- Spend Conservatively & Always Pay in Full: Obviously, if you never carry a balance from month to month, you won’t have any unpaid amounts to be personally liable for. So make a credit card budget that you have no question you’ll be able to afford and stick to it. Forcing yourself to prioritize and keep costs low will also reduce uncertainty and stress. It may even help sharpen your focus on your company’s most important objectives.
- Use a 0% Consumer Card for Business Financing: Most business credit cards are bad for carrying a balance from month to month. The cost of that debt could change at any time, you see. Unlike with consumer cards, credit card companies are not legally required to wait until payment becomes 60 days late to increase the interest rate on an existing business card balance. And while a pair of major issuers – Bank of America and Barclays – have adopted the 60-day rule, that doesn’t give you much of a selection. So it’s best to use a 0% consumer card for purchases that you won’t be able to repay for months.
- Put Limits on Authorized Users: You are personally liable for any transactions made on your business credit card account. That includes those made by authorized users. Fortunately, business credit cards are known for letting owners set custom spending limits for individual employees. You can even set it up so that purchases above a certain amount or made by a particular employee require your permission to go through.
While it certainly can be a bit nerve-wracking to put your personal finances at stake in order to get a business credit card, it’s something most small business owners have to deal with. Besides, you only need to worry about a personal guarantee if your business defaults on debt. So just focus on making sure that doesn’t happen