Secured Business Credit Cards

Chase does not offer secured business credit cards, but other credit card companies do. For example, the Wells Fargo Business Secured credit card has a low annual fee of $0 with a minimum deposit of $500. And the BBVA Compass Business Secured credit card actually waives its $40 annual fee for the first year you have the card (the minimum deposit is $500).

That said, you don’t necessarily need a business credit card to use for your business. There’s no law against using a regular, personal credit card for business expenses. And there are lots more options for personal secured credit cards than there are for secured business credit cards, so you might find a better deal.

If you get a secured personal card instead of a secured business card, you’ll generally have a lower annual fee and lower minimum deposits. For example, if you get the Capital One Secured Mastercard, there is a chance your card could be partially secured – meaning you’ll only need to deposit a fraction of the credit line up-front.

No, there is no secured business credit card from American Express. Amex doesn’t offer secured consumer credit cards either. In fact, the easiest American Express credit cards to get require at least good credit for approval.

Amex is not the end of the road for those who want a secured business credit card, however. The Wells Fargo Business Secured card is one of the best options. It gives 1.5% cash back for every $1 spent, and it charges a $0 annual fee. The minimum deposit is $500, and whatever amount you deposit becomes your credit limit. It’s also one of the only secured business cards that reports to the business credit bureau Dun & Bradstreet. That can help if you’re trying to build your business’s credit history, though business credit reports aren’t as influential as personal reports.

Secured business credit cards are an option for business owners with bad credit or limited credit history. But business owners don’t need to get a secured business credit card for company expenses. You’ll find lots more secured credit card offers for individuals than businesses. Personal secured credit cards also generally come with lower minimum deposits than secured business cards, and the best ones have no annual fee.

The best secured consumer credit card out right now is the Discover it Secured card because it has no annual fee and gives 1 - 2% Cash Back on purchases. And all the cash back you earn in the first year will be doubled. Considering many secured credit cards don’t even offer rewards, it’s a nice cherry on top.

The only secured business credit card that reports to D&B is the Wells Fargo Business Secured Mastercard. It offers 1.5% cash back on all purchases, charges an annual fee of just $25 and requires a security deposit of at least $500.

There are just two other secured business credit cards available right now: the BBVA Compass Business Secured Visa and the Metro Credit Union Visa Secured Card. Those two report to the three major consumer credit bureaus – Experian, Equifax and TransUnion – but not to D&B, at least not directly. Dun & Bradstreet often incorporates information from the other bureaus’ reports.

Here’s what you should know about secured business credit cards that report to D&B:

• 1 of the 3 available secured business credit cards reports to Dun & Bradstreet: Wells Fargo Business Secured Mastercard.
• All major secured credit cards report to the three consumer credit bureaus: Equifax, Experian and TransUnion.
• D&B, Experian and Equifax are the three major business credit bureaus.
• Dun & Bradstreet reports are geared more to credit agreements with vendors, bank loans and annual revenue data.
• Your personal credit history is much more important than your business’s credit history when it comes to getting approved for a business credit card.
• Small business owners are personally liable for debt on nearly all business credit cards.

Although opening a credit card is the easiest way to build credit personally, it’s not as efficient with business credit. 

If you want to build business credit, your first step to be to register for a D-U-N-S Number from D&B. This will get you on Dun & Bradstreet’s radar, at the very least. You should also open a business bank account using your Employer Identification Number. That will help establish a financial identity for your company that’s separate from you as an individual. And then you need to ask your vendors to report your payment history to D&B using your D-U-N-S. 

That’s at least what Dun & Bradstreet recommends. Tracking so-called trade credit is one of the most important things business credit reports do that personal reports don’t.

You need a credit score of 700 for an American Express business card. That means you must have at least good credit for decent approval odds. American Express does not offer business cards for bad, fair, limited or no credit. Nor do they have any secured business cards to help rebuild credit.

It’s important to note that an applicant’s credit score is not the only factor that Amex considers. Things such as payment history, income and current debts are also important. But the higher your score, the better your chances of approval become. Keep in mind that Amex will look at your personal credit during the approval process because you will have to provide a personal guarantee to pay Amex back if the business cannot. This is normal for business credit cards.

There are several easy approval business credit cards. That’s because the easiest business credit cards to get only require fair or bad credit. They include Capital One Spark Classic for Business,  the Staples Business Credit Card, and the Wells Fargo Business Secured Credit Card. It’s also worth noting that while you must have a business to get one of these cards, your personal credit history matters a lot more than your company’s.

Here are your options for easy approval business credit cards:

• Limited Credit: Capital One Spark Classic for Business
  You’ll get 1% cash back on all purchases. There’s no annual fee, and the purchase APR is 24.24%.
• Fair Credit: Staples Business Credit Card
  You’ll save $50 on a purchase of $150 or more made within 45 days of opening your account. You’ll also get 5% back in Staples credit for each purchase. There’s no annual fee. Your APR will be somewhere between 14.99% and 23.99%, depending on credit worthiness.
  
• Bad Credit: Wells Fargo Business Secured Credit Card
  You’ll get 1.5% cash back on purchases. The annual fee is $25. The minimum security deposit is $500. And the APR is 16.40%. The BBVA Compass Business Secured Card is another good option.
  
• Personal Option: Discover it Secured Credit Card

You’ll get 2% cash back on the first $1,000 you spend at gas stations and restaurants each quarter. You’ll get 1% cash back on all other purchases. Discover matches the cash back you earn the first year. There’s no annual fee, the APR is 24.24%, and the minimum deposit is $200.

There are a few easy approval business credit cards, so you shouldn’t let limited or damaged credit prevent you from getting the card your business needs. And remember, if you pay your bills on time and keep your credit utilization ratio low, your credit should steadily improve over time.

There is no way to get guaranteed business credit card approval. Business credit cards always have certain requirements that must be met for approval, such as exceeding credit and income thresholds, having proof of U.S. residency and/or providing a Social Security Number (SSN).

The closest thing to guaranteed business credit card approval is a secured business credit card. The Wells Fargo Business Secured card has high odds of approval even to people with bad credit. It requires a minimum $500 cash deposit. This deposit serves as collateral and is equal to your credit limit. But even though the deposit makes Wells Fargo’s risk very low, they might still reject your application if you have pending tax liens or bankruptcies on your credit report.

Business credit card approval relies on your personal credit history. The reason is that business credit cards require a personal guarantee. Issuers need an assurance that any money they lend will be paid back. The personal guarantee states that if the business is unable to repay a debt, then the business owner is personally liable.

All secured business credit cards can build credit quickly if you always pay the bill on time and keep your credit utilization low. There are two types of credit that a secured business credit card could build, however, and it may not address both equally. Secured business cards can help build business credit, but they don’t all build personal credit.

Much like unsecured business credit cards, each secured business card issuer will have their own consumer credit reporting practices. Some may not report to consumer agencies at all. So, business owners looking to rebuild damaged personal credit may want to consider a secured credit card branded for personal use. They work just as well to separate business expenses from personal expenses; they all report to consumer credit bureaus; and there are far more consumer secured cards available than business ones.

It’s also important to remember that business credit scores aren’t built the same way as personal credit scores. Building a business credit score may require more effort, and business credit scores don’t matter nearly as much as personal credit scores when it comes to securing business funding or credit cards. So, secured business credit cards generally can help build business credit, but that isn’t always as helpful as you might think.

Secured business credit cards can report to some business credit bureaus to build business credit, but some don’t report directly to business bureaus. And much like unsecured business credit cards, each card issuer has their own policy about what they report to personal credit bureaus. For example, the Wells Fargo Business Secured Credit Card does not report to personal credit bureaus, so it won’t build personal credit. On the other hand, it reports business credit information to the Small Business Financial Exchange, which then licenses that information to business credit bureaus.

Most people with secured credit cards are using them to rebuild damaged credit. If you want a secured business card to build your business credit, it’s advisable to call and ask about the card issuer’s business credit reporting policy. Keep in mind that business credit is built differently than personal credit, and you may need to take extra steps to effectively build credit for your business.

On the other hand, if you are looking to rebuild your personal credit score with a secured business credit card, you should call the card issuer to make sure they report to personal credit bureaus. Or just use a general-purpose secured credit card.

Some alternatives to a secured business credit card are regular secured credit cards, small business loans and personal loans that approve applicants with damaged credit, and unsecured credit cards for bad credit. Most business owners looking for a secured business credit card want to rebuild their credit, and these alternatives can help toward that end. Unsecured business credit cards for bad credit are virtually nonexistent. But there’s no rule saying you can’t use a regular consumer credit card for business expenses - and if you go that route, get the best card you’re qualified for.

The best alternative to a secured business credit card is a regular secured credit card. Regular secured cards for consumer use have similar approval requirements as secured business cards, and there are a lot more consumer secured cards to choose from. Plus, you can find a few consumer secured cards that don’t charge annual fees, which you probably won’t find on the business side. Consumer cards also tend to have lower minimum deposits, and some have ongoing rewards for purchases, too.

Another option is to find a lender that caters to business owners with damaged credit. Some of these lenders, such as Fundbox and Headway Capital, have an annual business revenue requirement of $50,000 or more. But they accept applicants with less-than-good credit, so if your business fits the requirements, it may be worth looking into. Similarly, you might be able to get business funding with a personal loan, though the interest rates will likely be high if you have bad credit. And if you have a credit score under 550, you may not have much luck getting a personal loan.

Unsecured credit cards for bad credit are another alternative to a secured business credit card, though they are not the best option. The unsecured cards you’ll qualify for with bad credit tend to have higher interest rates and fees than secured credit cards. Such a card will help you build good credit history if you use it responsibly, but there are definitely cheaper ways to build credit.

The only secured business credit card that reports to a business credit agency (D&B) is the Wells Fargo Business Secured Mastercard.

However, all major secured business credit cards report to the three consumer credit bureaus: Equifax, Experian and TransUnion.