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Business credit cards come with major benefits for small business owners and entrepreneurs.
Not only can you earn rewards on regular spending, but many business credit cards offer important consumer benefits and travel perks. Credit cards for business can also help you separate business spending from personal expenses, making life easier when it comes to tracking your purchases or getting your business expenses organized for taxes each year.
Not everyone can qualify for the top business credit cards, though. Consumers with poor credit or limited credit history often have to start their journey with a secured credit card that offers fewer benefits and requires a cash deposit as collateral to get started.
Still, a secured business credit card is often the best way to build up personal and business credit scores while accessing the credit you need to grow. If you’re ready to start building credit to take your company to the next level, consider all the business credit cards you may be able to qualify for.
Bankrate’s picks for the best secured business credit cards of 2020:
- Best overall secured credit card for business: Wells Fargo Business Secured Credit Card
- Best secured business credit card with rewards: BBVA Compass Business Secured Visa Credit Card
- Best secured credit card for freelancers: Discover it® Secured
Wells Fargo Business Secured Credit Card
- Earn 1.5 percent cash back, or 1 rewards point per $1 spent and 1,000 bonus points when your company spending equals $1,000 or more in any monthly billing period
- $25 annual fee per card
- $500 to $25,000 credit line
- No foreign transaction fees
- Available to consumers with no credit or limited credit history
Why it’s the best overall secured credit card for business
The Wells Fargo Business Secured Credit Card is worth considering for a few reasons, including the fact you can earn rewards for a reasonable annual fee of only $25 per card. You won’t pay foreign transaction fees when you make purchases outside the United States, and you can qualify for a line of credit between $5,000 and $25,000, based on the amount you deposit.
Once you sign up, Wells Fargo will report your payments to the Small Business Financial Exchange. This means that, while this card can help you build your business credit, payments are not reported to consumer credit bureaus and cannot help boost your personal credit.
Wells Fargo will also periodically review your account to see if you’re eligible to upgrade to an unsecured business credit card with even better benefits.
BBVA Compass Business Secured Visa Credit Card
- Earn 3X points at office supply stores, 2X points at gas stations and restaurants and 1X points on all other purchases
- $0 the first year, then $40
- Free employee cards
Why it’s the best secured business credit card with rewards
The BBVA Compass Business Secured Visa Credit Card offers one of the highest rewards rates of any secured credit card. You’ll earn 3X points at office supply stores and 2X points at gas stations and restaurants, plus 1 points per dollar spent on all your other regular purchases.
The deposit you’re required to put down as collateral starts at $500, but this money will be put into a savings account with the bank that is set aside on your behalf. From there, you’ll be able to access up to 90 percent of your savings account balance (which you may add to at any time) as a line of credit you can use for business purchases or supplies.
You’ll also get free employee cards, auto rental coverage for business rental agreements, purchase protection against damage or theft, travel accident insurance, extended warranties and other valuable perks.
The downside is, this card is only available in a limited number of states, which currently include Alabama, Florida, Texas, Arizona, Colorado, California and New Mexico.
Discover it® Secured
- Earn 2 percent back on up to $1,000 spent at gas stations and restaurants each quarter (then 1 percent) and 1 percent back on everything else
- Discover will match all the rewards you earn the first year
- No annual fee and no late fee on your first payment
- Free access to your FICO Score on your monthly statement
Why it’s the best secured credit card for freelancers
If you’re a freelancer who needs a secured line of credit but you don’t necessarily want a business-specific credit card, consider the Discover it® Secured. This consumer credit card earns rewards on your spending and Discover will even match all the rewards you earn the first year. There’s no annual fee and no late fee on your first late payment.
While this isn’t a business credit card per se, it’s a good option for sole proprietors or freelancers who run a solo business. You’ll only need a minimum security deposit of $200 to get started, and there are no fees, so you can use it to build credit and borrow money as needed to help your business grow.
Benefits of using a secured business credit card
Secured business cards can be a valuable tool for business owners just starting out or without a great personal credit history. Here are the main advantages you should know as you compare card options for your business needs:
- Build both personal and business credit. If you can’t get approved for a traditional business credit card with better perks and rewards, a secured business credit card can give you the chance to start building credit to prove your creditworthiness to lenders. Read the fine print of your agreement to learn which bureaus your issuer reports to.
- Earn rewards on your spending. Many secured business credit cards earn rewards on everyday spending, which can add up quickly if your business has a lot of monthly expenses. Just remember to pay your credit card balance in full each month so you can avoid high interest payments if you want to make the most of rewards.
- Start building positive credit habits. Secured credit cards also give cardholders the chance to build good credit habits that last. This includes using credit to make small purchases you can afford to pay off, keeping track of spending throughout the month and paying card balances in full to avoid interest.
Work towards upgrading to another business credit card later on. Finally, remember that your secured credit card for business is just a starting point. If you use credit responsibly and always pay your bill on time, proving your creditworthiness, you can switch to a more premium business credit card later on.
The information about the Wells Fargo Business Secured Credit Card and the Discover it® Secured has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.