A credit card can be a useful business tool that makes it easier to keep track of your business expenses or manage gaps in cash flow. However, if you have bad credit or have a limited credit history, then it can be difficult to qualify for most small business credit cards. Getting one with a rewards program can be even more challenging.
That’s where secured business credit cards can be helpful. You can use these cards wherever that particular brand of card (American Express, Discover, Mastercard or Visa) is accepted. Because there is a security deposit, these cards can be easier to get if your credit history is poor.
However, as of October 2022 Wells Fargo stopped offering the Wells Fargo Business Secured Credit Card. Here we’ll discuss alternative credit cards and charge cards to help you build or rebuild credit, including one that doesn’t require a credit check or security deposit.
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What’s Good About Secured Business Credit Cards
Business owners often use business credit cards to pay for purchases. They have several benefits as a payment method:
Safety: Credit and charge cards are the safest way to pay for purchases. Federal law limits your liability for unauthorized charges to no more than $50, and those protections apply to business as well as personal cards. Many card issuers offer zero liability so you won’t be responsible for fraudulent purposes if you dispute them promptly.
Expense tracking: When you use a business credit card (instead of a personal credit card) for business spending, it’s easier to keep track of business transactions that may be tax deductible. It is also often easy to import purchase history from your business credit card directly into your business accounting software. And some card issuers also offer detailed spending reports.
Build Business Credit: Business credit cards can help your business establish business credit if payment history is reported to business credit bureaus. A credit card or charge card paid on time can be an excellent way to help build good business credit scores.
Perks: Cards may offer perks (like extended warranties) or rewards programs like travel rewards or cash back though your options for cards that earn reward points will be more limited when you don’t have excellent credit,
Secured cards specifically can be useful to small business owners in several ways:
Establish or build credit. Secured credit cards are designed to help individuals without an established credit history, or those with bad credit, get a card to help establish a good payment history. When you build good credit, you may be eligible for unsecured credit cards with significant cash back rewards, bonus points and sign-up bonuses.
Easier to qualify. These cards require a security deposit to qualify. Much like a security deposit helps you qualify to rent an apartment, the deposit is there in case the charges on the card aren’t paid back. A security deposit may not guarantee approval, but it can help significantly.
Avoid debt and overspending. Your deposit determines your credit line and that often means it’s hard to rack up significant debt on the card.
Tip: Be sure to check and monitor both your personal credit and business credit. Nav Prime can help with Detailed Credit Reports
Alternatives to the Wells Fargo Secured Business Credit Credit
While this card is no longer available, there are a couple of great card options that can help you build business credit.
The Nav Prime Card* is a charge card that is available exclusively to Nav Prime users. It requires no security deposit, and there is no personal credit check.
Get the Nav Prime Card and timely, successful repayments will be automatically reported to the major business credit bureaus as a monthly tradeline, helping build business credit history. Link your bank account to set your limit and repay your balance.
And since Nav Prime offers Detailed Credit Reports, and also reports as a monthly tradeline, you can double your tradelines with the Nav Prime Card.
Here’s how helpful tradelines can be. Customers who used Nav’s Detailed Credit Reports with tradeline reporting saw an increase in business credit scores of up to 50% in the first 3 months.**
The Nav Prime card is currently not available in CA, NV, ND, SD.
First National Bank Business Edition® Secured Visa® Card
The FNBO Business Edition® Secured Visa® Card is a business secured card with a credit limit between $2,000 and $100,000, in multiples of $50, subject to credit approval. Your security deposit must be 110% of the credit limit that you want, however you will earn interest on the deposit. There is an annual fee of $39.
*All information about the First National Bank Business Edition® Secured Visa® Card credit card has been collected independently by Nav. This card is not currently available through Nav. To see what business credit cards are available, please visit the Nav.
Frequently Asked Questions
Are There Business Credit Cards for Bad Credit?
Yes. Business owners with poor or non-existent credit can apply for a secured credit card or the other options mentioned above.
What is a Business Secured Credit Card?
A business secured credit card is a line of credit specifically designed for applicants with poor, bad credit or non-existent credit. If you’re applying for a business secured credit card, then you’ll need to make a refundable security deposit. The amount of your deposit will determine your card’s credit limit. You’ll still have to make regular payments and the deposit will only be used if you default.
When used responsibly, a secured credit card could help you improve or build credit. Conversely, late payments or over-utilization can hurt your credit score. So it’s important to monitor usage and make timely payments.
Does Wells Fargo Offer Secured Credit Cards?
Wells Fargo is not currently offering secured credit cards.
How Do I Choose a Business Secured Card?
Here are some key questions to ask when choosing between credit card offers:
- What is the interest rate?
- What is the annual fee?
- What security deposit is required?
- Are there foreign transaction fees?
- Will my deposit be held in an FDIC insured savings account?
- Are there additional fees?
- Does the issuer indicate a minimum FICO score or credit tier required?
- Is the spending limit more, less or equal to the security deposit?
- Which business credit bureaus will the card be reported to?
- If rewards are offered, what is the rewards rate?
*DISCLAIMER: Nav Technologies, Inc. is a financial technology company and not a bank. Banking services provided by Blue Ridge Bank, N.A., and Thread Bank, Members FDIC. The Nav Visa® Business Debit Card is issued by Blue Ridge Bank, N.A., and the Nav Prime Charge Card is issued by Thread Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa cards are accepted. Your funds are FDIC-insured up to $250,000 through Blue Ridge Bank, N.A., Member FDIC.
**Based on aggregate data tracking Experian® Intelliscore Plus business credit scores after three months of having Nav tradeline reporting. Results will vary. Scores are calculated from many variables; some users may not see improved scores.
This article was originally written on August 8, 2019 and updated on October 27, 2023.