If you have a startup that can’t qualify for a traditional business loan, you might consider credit card stacking — a strategy that allows you to access more money by opening multiple credit cards. Although business credit cards can be quick and easy to obtain, managing several at once can be costly and complex.
How much do you need?
We'll start with a brief questionnaire to better understand the unique
needs of your business.
Once we uncover your personalized matches, our team will consult you
on the process moving forward.
What is credit card stacking?
Credit card stacking is a type of alternative financing in which you “stack” multiple business credit cards to increase the total amount of capital you can access.
Credit card stacking can be done individually by applying for multiple credit cards at once, or via a third-party company — sometimes called a stacking lender — that will help you find and apply for multiple credit cards.
Business credit cards may be easier to qualify for than loans because:
- They often require less (or no) time in business.
- They may not have minimum revenue thresholds.
- They don’t require collateral.
- Approval is largely based on personal credit.
Like business loans, however, you’ll likely need good-to-excellent personal credit (a score of 690+) to get approved for business credit cards.
🤓 Nerdy Tip
Credit card stacking isn’t the same as refinancing, which replaces an existing loan with a new one, or debt consolidation, which combines multiple debts into a single loan. It’s also different from a credit card balance transfer, which moves debt from one card to another. How does credit card stacking work?
Here’s an overview of how business credit card stacking works:
1. Find and apply for credit cards
Before applying, make sure you’re prepared to submit multiple credit card applications at once. You’ll want to do this because some providers are inquiry-sensitive and won’t approve you if they see a lot of recent credit inquiries on your report. You can also try targeting cards that pull from different credit bureaus (e.g. Experian, Transunion, Equifax) to avoid this issue.
When choosing cards, prioritize:
- Cards that offer cash-back rewards.
- Cards that provide specific business benefits.
You can pursue credit card stacking on your own, or opt to work with a stacking company, like Fund & Grow or StartCap.
Stacking companies may:
- Help you find the best credit card offers.
- Handle your applications with each bank.
- Provide counseling after approval to help you manage and optimize your stacking strategy.
However, they can be costly. These companies might:
- Charge an upfront membership fee before funding.
- Collect a fee after you’re funded (8% to 12% of the total amount you receive).
Applying with a stacking company may also take longer than getting approved for credit cards yourself.
2. Access multiple credit lines
Once you’re approved, each card will come with its own pre-set limits, which you can combine to get your total available credit. You may spread business purchases out over all your credit cards or spend only on the card with the lowest interest rate.
If the card permits, you may also get cash from your credit line; however, be wary of any fees associated with cash advances, which can be up to 5% of the advanced amount.
3. Pay down and redraw balances
Ideally, you’ll pay off the balance on each card before interest accrues. This will help you:
- Save money by avoiding interest.
- Ensure payments don’t become unmanageable and strain your finances.
Remember: Credit cards are revolving, which means you can draw on them (up to your limit) again once you’ve paid the balance off.
Pros and cons of credit card stacking
Pros
- Relatively easy to qualify. As long as you have strong personal credit, it’s fairly easy to get approved for a business credit card. Plus, these cards don’t require collateral or require you to give up ownership in your company, like some other methods of startup funding.
- Quick funding. You can often apply for a business credit card in minutes and get funding almost immediately.
- Access larger amounts of capital. Credit card stacking gives you access to more funding than you’d get from a single card.
- Business-specific perks. Most business credit cards offer rewards for spending, which you can leverage to offset operational costs.
- Can help build business credit. If managed correctly, credit card stacking can help you build your business credit, which can help open up other funding opportunities in the future.
Cons
- High interest rates and fees. Credit card stacking can be costly if you take on more than you can repay or carry balances from month to month. APRs typically range from 16% to 34% and can add up quickly across multiple accounts. You may also have to pay an annual fee, which can reach up to $700+ on some cards.
- Funding access reliant on personal credit history. If you don’t have a strong personal credit score, you won’t be able to qualify for multiple business credit cards. Even if you are approved with a lower credit score, the available credit limit may not be enough for your needs.
- Requires managing multiple accounts. You’ll need to track multiple credit lines and payment due dates at once. Managing several credit cards on top of other bills can make it easier to fall behind.
- Risk of debt cycle. If you fall behind on payments, interest can accrue quickly, which can trap you in a cycle of debt that’s difficult to break. This can strain cash flow and limit your ability to invest in your business.
- Can impact your personal credit. Applying for multiple credit cards will likely result in several hard credit inquiries, which can temporarily lower your credit score. Most business credit cards also require a personal guarantee. If you can’t repay, it could negatively impact your personal credit history.
Who should consider credit card stacking?
Use these guidelines to determine if credit card stacking fits your needs.
Credit card stacking may make sense for you if:
- Have good-to-excellent personal credit (690+).
- Are a pre-revenue or early-stage startup.
- Need short-term working capital.
- Can realistically pay balances before interest accrues.
It may not be a good fit for you if:
- Can qualify for affordable, less risky business financing options.
- Have inconsistent cash flow.
- Struggle managing multiple payment due dates.
- Need long-term financing.
- Have fair or bad credit.
Alternatives to credit card stacking
If credit card stacking isn’t the right choice for your business, consider these options:
Business lines of credit
Best for: Small businesses that need revolving funding.
Headway Capital Headway Capital - Line of credit
Max Loan Amount
$100,000 If your business regularly needs to cover cash-flow gaps, you may consider applying for a business line of credit. Business lines of credit are available from banks and online lenders, and can have limits over $250,000. Some non-bank lenders — like Headway Capital and OnDeck — also have lower credit score requirements than the average credit card.
Online term loans
Best for: Small businesses in need of fast capital.
Fora Financial Fora Financial - Online term loan
Max Loan Amount
$1,500,000 Online lenders can offer an expedited process with some term loans offering up to $1.5 million. Although same-day funding may be available, online loans typically have higher APRs and less favorable terms than traditional loans.
Invoice factoring
Best for: B2B businesses with cash tied up in receivables.
AltLINE AltLINE - Invoice factoring
Max Loan Amount
$5,000,000 If your business has a lot of money tied up in accounts receivable each month, invoice factoring may be a viable option. This type of funding allows you to sell your unpaid customer invoices at a discount in exchange for an advance of capital.
CDFI loans
Best for: Business owners with poor personal credit.
Accion Accion Opportunity Fund Small Business Working Capital Loan
Max Loan Amount
$250,000 If you’re facing credit challenges and don’t need a lot of funding, you can look for loans from community development financial institutions (CDFIs). CDFIs are non-bank lenders that typically serve underserved communities and may have more flexible qualification requirements.
Equity financing
Best for: Pre-revenue startups or companies in the early stages of growth.
Startup companies may benefit from equity financing, which involves raising capital for your business by selling ownership, or equity in your company. Equity financing may come from venture capital firms or angel investors, and is a debt-free method of financing your business. However, ownership and control of your business can be at risk.
Frequently asked questions
Is credit card stacking legal?
Yes, it is legal to stack credit cards. Some lending companies have policies against loan stacking, in which you take on multiple loans at once.
What is a credit card stacking company?
A credit card stacking company is a third-party company that helps small-business owners find the best credit cards for stacking and submit multiple applications to card issuers at once.
What is the credit stacking method?
Credit stacking, or credit card stacking, is a financing strategy in which business owners obtain multiple credit cards to increase the total amount of credit they're able to access.
