Best for freelancers
Capital One Platinum Secured Credit Card
Finder rating 4.4 / 5 ★★★★★
Expenses may be tight when you're flying solo. That's why it's helpful to have a chance at paying a low security deposit and a credit-limit increase shortly after you receive your card.
|Minimum deposit required||$49, $99 or $200|
|Purchase APR||26.99% variable|
|Minimum Credit Score||New to credit|
Best for high maximum credit limit
Business Edition® Secured® Visa Card
|Minimum deposit required||N/A|
|Purchase APR||20.24% variable|
|Minimum Credit Score||300|
Best for rewards
|Minimum deposit required||N/A|
|Purchase APR||15.15% variable|
|Minimum Credit Score||300|
Best for $0 first year annual fee
BBVA Secured Visa® Business Credit Card
|Minimum deposit required||N/A|
|Purchase APR||16.24% variable|
|Annual Fee||$40 ongoing|
|Minimum Credit Score||580|
How we selected the best cards
We compared all secured business credit cards and narrowed them down based on criteria such as their annual fee, credit limit and rewards. We chose the cards that stood out in one or more of these categories.
What’s changed in 2020?
Since these cards performed just as well as they did last year, we decided to keep our top picks for 2020.
How to choose the best secured business credit card
You can narrow down the best card for you by considering these questions:
- What annual fee do you want to pay?
Most secured business credit cards have annual fees between $25 and $45. If an annual fee is a big downside for you, consider no-annual-fee options such as the Capital One Platinum Secured Credit Card.
- Are you looking for rewards?
If so, you might like cards such as the Wells Fargo Business Secured Credit Card and BBVA Secured Visa® Business Credit Card. Think about the rewards you might earn, especially in comparison to the card’s annual fee.
- What security deposit do you want to put down?
Secured business cards often have high minimum deposits of $500 or more, but also high maximum deposits. If you prefer to put down a larger deposit, cards like the Business Edition® Secured® Visa Card,Wells Fargo Business Secured Credit Card and BBVA Secured Visa® Business Credit Card might be good fits. Otherwise, consider a personal secured card like the Capital One Platinum Secured Credit Card.
- How much are you comfortable paying for employee cards?
You’ll likely pay for additional employee cards. With some products, however — such as the BBVA Secured Visa® Business Credit Card — you can add employee cards at no additional cost.
Pros and cons of secured business credit cards
- Multiple users. Many cards allow you to add several authorized users to the card for business expenses and purchases.
- Helps you build credit. Many providers of secured business cards report your payment activity to business credit bureaus like Dun & Bradstreet, Equifax and Experian.
- Rewards. Some secured credit cards offer rewards such as cash back or points on certain purchases.
- Security deposit to access credit. In many cases, the cash deposit needs to be higher than the initial line of credit.
- Per-card annual fees. More users often means more fees.
- Slim pickings. Fewer banks offer secured business cards versus unsecured products.
- High variable interest rates. Secured business cards typically come with higher interest rates than the average APR of around 16%.
What fees does a secured business card have?
This largely depends on the card, but the most common fees you’ll find with a secured business credit card are:
- Annual fee. Depending on the card, you’re looking at an annual fee of up to $40. Some secured cards, however, have no annual fee. You might also have to pay an annual fee for each additional card.
- Foreign transaction fees. Most cards of this type charge a foreign transaction fee of 3% of the amount of every transaction made abroad or online with foreign merchants.
- Cash advance fees. Expect to pay either 3% or 5% cash advance fee with your secured business credit card, with either $5, $10 or $15 minimum.
- Penalty fees. Most cards will charge you with a late payment fee if you fail to make the minimum payment when due. There may also be a returned payment fee as well.
- Security deposit. Consider what you want your credit limit to be and make sure you have that amount available to open the card.
How do secured business cards differ from secured personal cards?
There are a few ways secured business cards are different from secured personal cards, including:
- Business use only.
As their name implies, secured business cards are for business transactions only. You’ll typically see a clause in your credit card agreement stipulating that you can’t use your card for personal spending. This isn’t necessarily a bad thing, as it’s wise to keep your business and personal expenses separate.
- Annual fees.
Secured business cards are more likely to have annual fees — typically around $25 to $40. Meanwhile, there are several great secured personal cards with no annual fees.
- Spending reports.
Secured business cards usually come with the ability to generate spending reports online, so you can check which transactions employees make.
- Establish or build business credit.
While a secured personal card helps you build your personal score, it doesn’t help your business score. To build the latter, you can open a business credit card.
- Your credit line might not be 100% of your security deposit.
You’re more likely to see this situation with secured business cards. For example, your credit line might be merely 90% of your security deposit instead of 100%.
How is a secured credit card different from an unsecured credit card?
With a secured credit card, you’ll need to provide an upfront cash deposit. This isn’t required with an unsecured card. Although you can’t use the cash deposit after you open the card, you can usually get it back after you close your account.
Secured cards are most commonly used by individuals who don’t have the necessary credit score to open an unsecured card. Because these consumers are seen as more likely to default on their debt, issuing banks use the cash deposit as protection against missed payments. Some providers allow your deposit to earn interest in a holding account.
How to apply for a secured business credit card
To apply for a secured credit card for your business, do the following:
- Apply online or at your bank. You will most likely need to fill out a personal guarantee for the card, even though it’s a business card. This makes you personally responsible for the card’s balance. Have your Social Security number ready, along with your company’s federal tax ID.
- Bring financial documents. These might include revenue figures, a financial reference and your banking information.
- Submit corporate W-9 info. Sign a substitute for your company’s W-9 or submit your W-9 paperwork.
Alternatives to secured business credit cards
Before deciding on a secured business card, consider these other options:
- Personal secured cards.
These products are more likely to have no annual fees. Most of them make your credit line 100% of your security deposit, instead of just a portion of your deposit as with some secured business cards.
- Personal unsecured cards.
Look for providers that consider other factors besides your credit score, such as your personal payment history and cash flow. The Petal® 2 "Cash Back, No Fees" Visa® Credit Card may be one avenue to explore. Note that if your credit is severely damaged, this could still work heavily against you while you apply.
- Small business loans.
You may have luck with providers who are willing to consider applicants with damaged credit, such as The Kabbage Card and Fundbox.
- Other business loans.
If you’re not sure a secured business card is right for you, consider looking for a business loan. There are many kinds of business loans, including: term loan, line of credit, SBA loan, equipment financing, vehicle financing, invoice factoring, invoice financing, merchant cash advance.
After you get your secured business card, focus on making your monthly payments on time and in full to prove to the credit card bureaus that you’re a reliable customer.
As you continue to use your card, your provider might periodically review your account to see if you’re eligible for an upgrade to an unsecured credit card. You can also call the company and request a credit account review.
In time, as you build your credit, you might qualify for excellent unsecured business credit cards.
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