That’s where secured business credit cards come in.
A secured credit card is one where you put down a security deposit, which serves as your credit limit. For example, if you wanted a credit limit of $10,000, you would put down a security deposit of $10,000. As you use the card and pay your bill each month, your credit gets better.
The best secured business credit cards offer decent interest rates and credit limits. Many even offer cashback rewards and the ability to upgrade to an unsecured credit card later on.
Keep reading to learn about the best secured business credit cards and which one is right for you.
If you open a secured business card, Wells Fargo will periodically review your account and credit history. If you responsibly use your secured card and your credit history improves, then you may be upgraded to an unsecured card.
Pros:
No annual fee or foreign transaction feesOption of either cashback or rewards pointsPotential to upgrade to an unsecured credit card
Cons:
$25,000 credit limit for all Wells Fargo business cardsPoor customer satisfaction among credit card users, according to a J.D. Power surveyHigh interest rates on cash advances
The First National Bank secured card comes with plenty of ideal features for businesses, including tracking expenses, spotting tax deductions, preparing tax filings, forecasting expenses, and managing cash flow.
Pros:
High credit limitsAbility to earn interest on your security depositBusiness management tools
Cons:
A required security deposit of 100% of your desired credit limitHigher interest rate than many competitorsAnnual fee required
The OpenSky card comes with credit limits ranging from $200 to $3,000, and your refundable deposit will be equal to the credit limit you choose. Your security deposit is insured by the Federal Deposit Insurance Corporation (FDIC).
Pros:
No credit check is required to applyNo bank account requiredRefundable deposit insured by FDIC
Cons:
Annual fee and foreign transaction feesNo spending rewardsThe highest credit limit available is $3,000
The Discover secured card also comes with rewards. You’ll earn 2% cashback at gas stations and restaurants, 1% cashback on all other spendings, and with Cashback Match, you’ll earn an unlimited dollar-for-dollar match on all the cashback you’ve earned by the end of your first year.
Pros:
Cashback rewards for spending, including doubling of your rewards after the first yearAbility to convert to an unsecured card after 8 monthsNo annual fee
Cons:
Low credit limits compared to other secured business cardsHigh-interest rates compared to most competitorsIt doesn’t help to build your business credit
When seeking out the best secured business cards, we considered factors such as credit limits, interest rates, cashback rewards, business features, fees, and the ability to upgrade to an unsecured card in the future. And considering most applicants of secured credit cards are those who have poor credit or haven’t built sufficient credit yet, we needed to find cards that business owners could easily qualify for. For example, for those with more established businesses and employees, it might be important to have a card that comes with additional business features. In that case, you might prefer the Wells Fargo or First National Bank cards. But for customers without business credit who would rather use their personal credit.
Capital One Secured MastercardFirst Progress Platinum Prestige Mastercard Secured Credit CardBento for Business Prepaid Debit Card
Depending on the card, you might get a decision immediately or may have to wait for a decision. Once you’ve been approved, you’ll pay the security deposit to fund your card. Once you receive your card in the mail, you can start using it. The OpenSky card is best for those with extremely poor credit since it doesn’t require a credit check. Finally, the Discover secured card is best for freelancers who don’t necessarily need to build their business credit history and who want to take advantage of cashback rewards.
