Shopify Credit: Everything You Need To Know

Are you an ecommerce entrepreneur looking at ways to manage your business's cash flow?

Well, if you're a Shopify user, you might be interested to read about its latest offer: Shopify Credit.

In this review, I look at what Shopify Credit is, how it works, how to apply, and everything else you need to know.

That's enough intro; let's dive in!

What’s the Story?

Shopify Credit is the latest addition to a small stable of other Shopify financial products:

Shopify Balance: to help merchants manage their money (similar to a bank account)
Shopify Bill Pay: for merchants looking for a business payments solution
Shopify Capital: for merchants wishing to access working capital

On July 26th, 2023, Shopify announced Shopify Credit, a fee-free business credit card designed specifically with its merchants in mind.

It aims to address some of the issues entrepreneurs face when applying for a business credit card, namely:

Credit checks that can negatively impact their credit score
Expensive fees

Unlike traditional credit cards that allow you to carry over your outstanding balance from month to month (in exchange for fees and intestate rate charges), Shopify Credit is a pay-in-full credit card. This means you must pay your entire statement balance every billing cycle.

You have up to 56 days to settle your account. But, on the plus side, there are no account or interest fees!

Shopify Credit is brought to you in partnership with Stripe, and cards are issued by Celtic Bank.

Shopify Credit is accepted everywhere Visa is.

Shopify Credit: Eligibility Requirements

Shopify insists upon a few minimum requirements before you can use Shopify Credit.

These include:

A valid US Social Security number (so Shopify can verify your ID)
Your store must be located in the US or Puerto Rico
You must have a Shopify Payments account
The bank account you use with Shopify Payments must be the same as the one you use with Shopify Credit.
If you already have access to Shopify Capital, you're not eligible for Shopify Credit, and vice versa.

Shopify states that these requirements aren’t exhaustive and that (unspecified) ‘additional criteria might apply for eligibility.'

How to Apply

Simply head to the Shopify Credit page and click the ‘Check eligibility' button in the top right corner.

The Shopify Credit web page states merchants typically receive an answer within minutes, with no credit checks or guarantors.

A decision on whether you’ll receive a Shopify business credit card is based not on your credit score but on how well your business is doing.

If approved, you’ll receive a spending limit and a virtual card that you can use immediately. Your physical card (that comes in a lovely shade of pistachio) is sent upon request within five to seven business days.

As previously stated, this is a pay-in-full card. Any outstanding balance on your card will automatically be debited from your bank account or Shopify Balance account if you have one.

If, for some reason, Shopify can't retrieve the funds, your card is locked, and you can’t use it until you’ve repaid your balance.

Shopify Credit: What Does it Offer?

If successful, you’ll be offered the following perks:

No fees and no interest: I've said it already, but I'll say it again (After all, this is arguably Shopify Credit's biggest draw) there are no annual, set up, or transaction fees.
Limited-time welcome bonus: If approved for a Shopify business credit card, you can receive up to $2,000 in Shop Cash offers credits when you spend $20,000 on eligible purchases in the first three months of your account opening. This offer expires on October 31st, 2023.
Cashback savings: You can earn cashback rewards when using your card to buy products and services in the following categories:
- Eligible marketing or advertising from Google, Meta, Microsoft, Pinterest, TikTok, Snap, Twitter, and eligible marketing apps
- Eligible services/products from UPS, USPS, Pirate Ship, DHL Express, Shopify Shopping, Shipsurance, and eligible fulfillment apps
- Eligible inventory purchases from Faire

Each month, you receive 3% cashback on whichever of the above categories is your top spend. Any spending in the remaining two categories will earn you 1% cashback. Cashback will appear as statement credits each month.

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Multiple cards: You can give your team access to their own cards. Extra cards are free.
Visa perks: Use your card wherever Visa cards are accepted. Other benefits associated with Visa include:
- Extended purchase protection: if an eligible item is lost, damaged, or stolen, you can have it replaced, repaired, or reimbursed within the first 90 days of purchase.
  - Protection against fraudulent changes
  - Lost or stolen card replacement within one day or emergency cash advance
  - Collision and damage waiver coverage on car hire
  - Access to travel and emergency assistance services
  - ID Navigator by NortonLifeLock™ to protect you against identity theft

Manage Your Card

You can manage your card on the ‘Credit' page of your Shopify Admin. Here, you can view your account activity, make payments, and access your statements.

Statements are issued on the first day of each calendar month. This is followed by what Shopify calls a “float period” of 25 days before the payment is due.

Each month, payments are taken automatically on your payment's due date. But you can also make additional manual payments any time you like.

If you have secondary cardholders attached to your Shopify Credit account, you can also view their account activity within the ‘Credit' page of your Shopify Admin.

Customer Resources

Given that Shopify Credit is such a new venture, you’re bound to have more questions. Thankfully, Shopify doesn’t disappoint on this score, and its website has several resources you can access to learn more about Shopify Credit.

For example, the Shopify Help Center has a simple guide on Shopify Credit. It includes information on getting started, rewards, welcome bonus, managing your card, managing card holders, and FAQs.

In addition, I found several FAQs on the Shopify Credit page and three blog posts (at the time of writing) that offered more information about the card and advice on business credit cards and lines of credit more generally.

Lastly, if you’re concerned about eligibility criteria, you can connect with a Shopify Credit Specialist via the Shopify Credit homepage.

Pros and Cons

Pros

No account or interest fees
No credit checks
It's potentially a helpful resource for small businesses looking to boost their cash flow.
There's a cashback rewards scheme.
Merchants who apply might receive a response within minutes.
It's easy to manage your card within your Shopify admin panel.

Cons

It’s a very new venture, so there's almost no information about what customers think about it.
At the time of writing, I could find no information about the spending limits offered to potential cardholders.
Although Shopify states eligibility is based on your Shopify sales performance, it doesn't clarify what that means.
Shopify Credit is only available to users in the US and Peutorico.

Shopify Credit: My Verdict

That’s all for now on our Shopify Credit review. On paper, it certainly looks like a positive fit with Shopify’s other financial offers. It could be a good option for small business owners struggling to get credit, provided they can keep on top of paying their balance.

It will be interesting to see if Shopify expands its offer with more customer perks besides those listed above, so watch this space on that!

Overall, given there are no credit checks when you apply and no guarantors necessary, it could be a good resource if you’re not already a Shopify Capital user.

However, as with all things financial, I recommend going through the terms and conditions and small print in detail before signing the dotted line.

Are you considering applying for a Shopify Credit business credit card? Let me know about your experiences in the comments below.