For consumers with bad credit, it can often be a long journey to rebuilding their score.
One way to demonstrate creditworthiness is the ability to show a consistent history of making on-time payments to a credit card company.
In this review, we will examine how the Applied Card Bank option stacks up vs. other business credit cards in 2019 to help you decide if it is the best fit for your needs.
Applied Card Bank: The Pros
The Applied Bank® Visa® Business card is marketed as a way for sole proprietors and entrepreneurs to turn their hobby into a business by giving them the ability to separate personal expenses from business expenses.
The biggest selling point for the Applied Card Bank is that it’s intended for people with bad credit.
If an applicant has been denied by other creditors, this may be one of the few options they qualify for.
Visa states that the application process is quick, and those would-be borrowers will receive a decision in under a minute.
If borrowers are approved and demonstrate that they are capable of making on-time payments, they can begin to rebuild their credit history.
High Fees, Low Credit Line
While a solid payment history will be reported to the major credit bureaus, that is about the only advantage to be found here.
Business owners should be aware that there are no rewards or savings programs, and plenty of fees to keep track of.
For starters, there is a $125 origination fee that is charged immediately after a borrower is approved.
Once you also take into account the $500 borrowing limit, that immediately reduces the available funds to just $375.
Technically there is no annual fee, but borrowers are charged a $9.95 monthly maintenance fee, which adds up to $119.40 per year.
And unlike most other credit cards, there is no grace period.
That means interest begins to accrue the same day a purchase is made, instead of the minimum of 21 days offered by most other creditors.
The APR is more reasonable, with a variable rate of 23.99%.
However, late payments bump the APR up to 29.99%. Cash advances are charged at the same 23.99% rate, but with the addition of a 5% fee.
Combined with the lack of a grace period, that can make fees add up fast.
Other fees to be aware of include a $30 charge for an additional card and foreign transaction fees of 3%.
And because this is intended for business use, it is not covered by the Credit CARD Act of 2009 – meaning borrowers could be subject to retroactive increases on outstanding balances, sudden rate increases, and other unexpected fees.
Our final thoughts on this card are that it makes the most sense for someone with poor credit and limited borrowing needs who wants to keep their business spending separate from their personal account.
Otherwise, most other borrowers would benefit from a less restricted card with more borrowing power and lower fees.