A credit card can be a useful business tool that makes it easier to keep track of finances or manage gaps in cash flow. However, if you have bad credit or limited credit, getting a business card can be difficult. Getting one with a rewards program can be even more challenging.
The Wells Fargo Business Secured Credit Card, however, is an exception, offering cardholders a line of credit — as long as you can make a cash security deposit — and a rewards program despite potentially negative credit history. All with a relatively low annual fee of $25.
Keep in mind that this type of credit card requires cardholders to make an initial security deposit to open the account. The credit limit is then based on the total deposit amount. For example, a $1,000 cash security deposit may result in a $900 spending limit.
Like a debit card or credit card, you can use your secured credit card wherever Visa is accepted. But when used responsibly, a secured credit card can help you improve your credit score, making it more likely that you’ll be approved for unsecured cards in the future. However, if you have good or excellent credit, you’ll want to consider an alternative Wells Fargo business credit cards, like the Business Platinum or Business Elite card.
Card Review Details
As a secured credit card, one of the defining characteristics of this Wells Fargo credit card is the need for a cash security deposit. This deposit, which can range from $300 to $10,000 is held in a Secured Card Collateral Account.
If you don’t have $300 cash to deposit, you can also choose to transfer security deposit funds directly from your Wells Fargo checking account or savings account. The funds, however, are not used to pay down any debt. You’ll still be required to make monthly payments on the card should you make any purchases.
The credit limit amount you deposit into your collateral account dictates your limit; therefore, over time, you get a credit limit increase depositing more funds into your collateral account.
Another important characteristic to take note of, at least as it relates to secured business credit cards in general, is the Wells Fargo business rewards program. While many secured cards do not feature a rewards program, with the Wells Fargo Business Secured Credit Card you can choose between either cash back or rewards points.
Cash Back rewards
If you choose the Cash Back option, you can earn 1.5% cash back on every dollar spent. Cash Back rewards are redeemed automatically each quarter (March, June, September, and December) via account credits or your existing Wells Fargo checking or savings account.
If you choose the Rewards Points option, you will earn 1 point per dollar spent. And though that may be slightly lower than the 1.5% cash back option, you can also earn an additional 1,000 bonus points when you spend $1,000 during any given billing cycle. Plus you can earn a 10% point credit when you redeem your points online.
Points can be redeemed for gift cards, airline tickets, merchandise and more. However, tickets must be redeemed through the Rewards Service Center and a $24 fee will be assessed. Even with the fee, however, this can be a good deal.
The Wells Fargo Business Secured credit card also offers numerous other benefits, including the following:
- Financial management resources through Wells Fargo Business Online
- Online bill pay
- Automatic credit card bill payments to help you avoid late fees
- Overdraft protection for linked Wells Fargo accounts (an Overdraft Protection Advance Fee may be charged in certain circumstance)
- Access to the Card Design Studio, which gives cardholders the option to the look of their credit card.
- Up to ten employee cards.
- Ability to use the card for balance transfers, though the balance transfer APR may be higher than that associated with other business cards
The Wells Fargo Business Secured Credit Card offers approved applicants access to a credit line between $500 and $25,000. When used responsibly, this can be a great starter card that could help you build or establish business credit.
If you’re considering this card, there are a few things to keep in mind. Each card, including the primary card and any employee cards, will incur an annual fee of $25.
That means that if you request the maximum of 10 employee cards, your annual fee can be as high as $275. Still, a $25 annual fee is still lower than many of the other secured business credit cards available.
You’ll also be charged a fee for cash advances and overdraft protection advances. There are, however, no foreign transaction fees or monthly service fees.
In addition, in order to be eligible for a Wells Fargo Business Secured Credit Card you, or the primary applicant, must have Wells Fargo checking or savings account.
Finally, existing Wells Fargo Business Secured Credit Card customers may have the opportunity to upgrade to an unsecured credit card over time. Eligibility is determined by a variety of factors including your payment history, credit utilization, and FICO score. Upgrades are at the discretion of Wells Fargo, who periodically reviews card accounts to determine eligibility.
Overall, the Wells Fargo Business Secured Credit Card represents a great option for business owners who want the benefits of a rewards credit card but lack the necessary credit score. If, however, you don’t have a low credit score, you should consider other options before you apply for a credit account with Wells Fargo.
Frequently Asked Questions
Can a business get a secured credit card?
Yes. Business owners with poor or non-existent credit can apply for a secured credit card through select providers, including Wells Fargo.
Does Wells Fargo Business Secured Credit Card report to the credit bureaus?
The Wells Fargo Business Secured Credit Card reports card activity to the major credit bureaus — Experian, Equifax, and TransUnion.
What is a business secured credit card?
A business secured credit card is a line of credit specifically designed for applicants with bad credit or non-existent credit. If applying for a business secured credit card, you will need to make an initial security deposit, the amount of which will determine your credit limit.
When used responsibly, a secured credit card could help you improve or build credit. Conversely, late payments or over-utilization can work to decrease your overall credit. As such, it’s important to monitor usage and make timely payments.
Does Wells Fargo offer secured credit cards?
Wells Fargo offers numerous business credit cards, including the Wells Fargo Business Secured credit card. This card allows you to do many of the same things that an unsecured credit card does, including earn rewards, make balance transfers and cash advances, and request employee cards.
What are Wells Fargo’s business credit card approval requirements?
Wells Fargo doesn’t release specific information about their credit card approval requirements, but, like other card issuers, Wells Fargo considers numerous factors before making their decision. Your personal credit score will play a significant role in their decisions.
If you have excellent credit, you may be eligible for one of the Wells Fargo Business Platinum card or the Wells Fargo Business Elite card. However, even with less than stellar credit, you may be eligible for the Wells Fargo Business Secured card.
To apply, you’ll also need to have a Wells Fargo checking or savings account, provide basic information about your business, and have a valid driver’s license. And, because this is a secured card, you’ll be expected to make a security deposit when opening the account.