Obtaining a U.S. business credit card as a non-resident is challenging, especially if you lack a U.S. credit history. However, for non-residents running e-commerce businesses registered in the U.S., having a business credit card is essential. It not only helps in validating accounts on platforms like Amazon but also allows you to build creditworthiness over time. This article will guide you through the process of securing a U.S. business credit card and building your credit profile, even if you are a non-resident without a U.S. credit history.
Why You Need a U.S. Business Credit Card
For non-resident e-commerce businesses registered in the U.S., having a business credit card is crucial. Platforms like Amazon require a credit card to validate your Amazon Seller Central account. Additionally, a business credit card allows you to build creditworthiness by taking out credit loans for your business and paying them back on time, which is critical for long-term financial health.
Credit Cards vs. Debit Cards
Before diving into how to obtain a U.S. business credit card, it’s essential to understand the difference between credit and debit cards:
- Credit Cards: These cards allow you to borrow money up to a certain limit (your credit limit) to make purchases. If you do not pay back the borrowed amount within a set period, typically 30 days, interest will accrue. Many credit cards also offer additional benefits like cashback, travel points, and insurance. By repaying your credit on time, you build a positive credit history, which can increase your credit limit and make you eligible for larger loans in the future.
- Debit Cards: Debit cards allow you to spend the money you already have in your account. Once your account balance is depleted, you cannot spend any more money.
Challenges in Obtaining a U.S. Business Credit Card as a Non-Resident
One of the main challenges non-residents face when trying to obtain a U.S. business credit card is the requirement for an extensive personal credit history in the U.S. Most traditional credit card issuers require a strong credit history to grant unsecured credit cards. Unfortunately, building this history is difficult if you don’t already have a U.S. personal credit card or a significant credit record.
Options for Non-Residents Without U.S. Credit History
If you are a non-resident with no credit history in the U.S., your best option is to apply for a secured business credit card. Unlike unsecured credit cards, which are issued based on your credit history, secured credit cards require you to pay a security deposit. This deposit determines your credit limit and acts as collateral, making it easier for you to obtain a credit card despite the lack of a credit history.
As you build a positive credit history with a secured credit card, you can eventually qualify for an unsecured credit card.
Recommended Secured Business Credit Cards
Here are two secured business credit cards available to non-residents:
- Bank of America® Business Advantage Unlimited Cash Rewards Secured Credit Card
- This card is an excellent option for businesses looking for travel-related benefits. It has no annual fee and offers a pathway to graduate to an unsecured business card based on your credit history. However, it requires a relatively high minimum security deposit of $1,000.
- Valley Visa® Secured Business Credit Card
- The Valley Visa Secured Business Credit Card is ideal for businesses looking to manage cash flow with an intro APR offer and no minimum security deposit. It offers unlimited 1% cash back on purchases and requires a security deposit of 110% of your desired credit limit.
Secured vs. Unsecured Credit Cards
- Unsecured Credit Cards: These are issued without any credit deposit. The credit card issuer determines your creditworthiness and limit based on your credit history.
- Secured Credit Cards: These require a credit deposit to issue the card. Your credit limit is typically determined by the amount of your deposit. Secured cards are often the only option for individuals without a credit history. As you build a positive credit history, you may become eligible for an unsecured card.
Building Your U.S. Credit History
To build your U.S. credit history as a non-resident:
- Use your secured credit card for regular purchases and ensure you pay off the balance on time every month.
- Gradually, your positive payment history will help you build a strong credit profile.
- Over time, this can lead to higher credit limits, lower interest rates, and eligibility for more attractive financial products, including unsecured business credit cards.
By following these steps, non-residents can establish a U.S. credit history and unlock opportunities for their business in the U.S. market.
