Wells Fargo Business Secured Credit Card review: Earn business rewards with no credit or bad credit

Quick highlights

• Rewards rate: 1.5 percent cash back or 1 point per $1 spent and 1,000 bonus points for spending $1,000 each month
• Welcome offer: None
• Annual fee: None
• Purchase intro APR: None
• Balance transfer intro APR: None
• Regular APR: 15.15 percent

Current welcome offer

While some credit cards come with cash back or points bonus when meeting specific spending requirements, that’s often not the case with secured cards. There’s currently no welcome offer or new cardmember bonus for the Wells Fargo Business Secured Credit Card. While this isn’t a deal-breaker, it’s always nice to see a little bonus tied to your new card.

Rewards rate

Despite the lack of a welcome bonus, the card itself is still very rewarding for the category it falls under. In fact, the card earns rewards as competitively as some of the best, most rewarding secured credit cards. The rewards program for this card gives you two distinct rewards options to choose from. As many secured business cards don’t include any rewards, this standout feature makes the Wells Fargo Business Secured Credit Card a decent choice among similar cards.

For standard purchases, choose from these rewards options:

• 1.5 percent cash back
• 1 point for every $1 spent and 1,000 bonus points if you spend $1,000 each billing cycle

For businesses with large card-eligible purchases, it’s easy to see how the rewards can add up quickly, especially with the bonus point rewards option. In fact, if your business is reliably spending at least $1,000 each month on card-eligible and qualifying purchases, then the rewards value you earn in points is higher than the rewards value earned in cash back. If your business is opting for large purchases each month, then you should consider the points as your best bet to earn maximum rewards with this card. Just be wary that your hefty spending doesn’t lead to carrying a balance. You want to pay as little interest as possible.

With monthly card spending of $1,000, not only are you earning 1 point for each $1 spent, but you’re rewarded with 1,000 bonus points—which rounds out to roughly 2 points per $1 spent at this spending level.

How you earn

With cash back it’s easy to estimate the value of your rewards. For example, if you spend $2,000 on purchases in a statement period, you would earn a flat 1.5 percent back, worth $30. There’s also no limit to what you can earn, but there is a limit to what you can spend and that depends on how low or high your credit limit is as well as how frequently you pay your bill each month. So, calculate your deposit wisely because you certainly don’t want to go over your credit limit, especially because you’re supposed to be on a journey of credit recovery with a secured card. Since you can determine your credit limit with your initial security deposit, you should aim to deposit an amount that’s higher than your regular monthly spend so you aren’t maxing it out every month just to earn rewards.

If you choose to earn Wells Fargo Business Rewards points, you get 1 point for every dollar spent. In addition, you can earn a 1,000 point bonus (posted to the billing cycle following the cycle in which the points are earned) every month when you spend at least $1,000 with the card in a billing cycle. That’s up to 12,000 points per year from the bonus – a $120 value when redeemed.

However, if you have a credit limit of $1,000 then it won’t be wise to maximize it every month just to earn the bonus points. It’s a good idea to use a secured card like this as an opportunity to practice healthy financial habits. If you can and want to spend $1,000 every month, then make sure you have a monthly credit limit of at least $3,500. This will help you keep your credit utilization ratio under 30 percent and give you a little wiggle room in the event you need to make unexpected purchases. While credit utilization isn’t necessarily a large factor with this card because activity isn’t reported to the personal credit bureaus, it’s still worth paying attention to.

How to redeem

For cash back rewards, you don’t have to do anything to redeem. Rewards are automatically deposited to a linked checking or savings account quarterly. Cash back is paid out quarterly in March, June, September, and December.

For point redemptions using Wells Fargo Business Rewards, you have several options:

• Cash Rewards
• Gift Cards
• Merchandise
• Air travel
• Hotels
• Car rentals
• Cruises

To redeem points, you can head to the rewards portal to navigate through redemption choices. If you redeem points online, you earn a 10 percent bonus on the number of points on the redemption amount, further adding to your points balance.

If you’re shopping anyway, you should also consider checking the Earn More Mall for links to participating merchants with store-specific bonuses. Bonuses include increased points on purchases that can be anywhere from 2 points to 35 points per $1 spent on purchases with your Wells Fargo Business Secured Card.

Cash back rewards are worth exactly what you expect: 1.5 percent back as cash directly deposited into your checking or savings account with Wells Fargo. This can make for some rewarding value on all monthly spend limits under $1,000, but beyond that spending limit the rewards are potentially more inflated with the card’s other rewards model.

Rewards points are typically redeemable for 1 cent each. That’s half a cent less in value per dollar on a head-to-head basis. However, once you consider the 1,000-point monthly bonus (for spending $1,000 or more) and the 10 percent online redemption bonus, you’ll find you earn more than 1 point per dollar.

You effectively earn 1.1 points per dollar if you redeem online with the 10 percent redemption rebate. If you spend $1,000 or more, you can earn a rewards rate equivalent to 2.2 points per dollar thanks to the monthly bonus and the 10 percent redemption rebate. As you spend more or less and choose varying redemptions, your business rewards rate would land somewhere between 1 point and 2.2 points per dollar.

Savvy card users can earn more from the points option than cash back, but it’s a bit more complicated to earn and redeem. Plus, it’s only worth opting for the points option if you’re spending $1,000 each billing cycle regularly. This means you’ll have to put down at least $1,000 when opening the card or pay your bill more than once a month to get access to that credit limit. However, you should determine how large or small of a credit limit you need before you make your deposit.

Among secured business credit cards, the rewards program is a major selling point. Here are other useful features and perks to know about when considering the Wells Fargo Business Secured Card:

Flexible credit limits

When signing up for a new account, you can choose a credit line from $500 to $25,000. However, you need an existing Wells Fargo business checking or savings account with enough cash to match your credit limit. If you upgrade to a non-secured Wells Fargo business credit card or close the secured credit card account in good standing, the deposit is refunded to the linked account.

Overdraft protection

Overdrafts can be costly for businesses and consumers alike, and bounced checks and returned payments may come with additional fees from vendors, along with embarrassment when you have to pay again. The overdraft protection feature turns the Wells Fargo secured card into an automatic overdraft line of credit for the linked bank account. This service costs up to $20 per use, however.

Build business credit

Payment history is reported to the Small Business Financial Exchange, a nonprofit data company that collects reports and payment data from credit issuers. Over time, on-time payments and keeping your credit utilization low will help your business establish good credit or improve its credit history. Keep in mind, payments are not reported to the consumer credit bureaus, so your personal credit score isn’t affected by this Wells Fargo credit card.

This card is a winner when it comes to fees. There is no annual fee and no foreign transaction fee. As long as you pay off the card in full every month and avoid certain fee-bearing activities, you can keep and use the card without fees indefinitely as long as you maintain healthy financial practices and remain informed about potential hidden fees.

That said, late payment fees go up to $50 for repeatedly late payments and for returned payments, plan on a $29 fee. Cash advances and wire transfers also incur an additional fee.

If you don’t pay the card in full every month, the remaining balance is subject to a variable APR. For standard purchases, the rate is 15.15 percent. A higher 23.99 percent rate is required for cash advance transactions.

Don’t think the Wells Fargo Business Credit Card is right for you? Here are another two secured credit cards for business to consider as alternatives.

Wells Fargo Business Secured Credit Card vs. First National Bank of Omaha Business Edition Secured Visa Card

While the First National Bank of Omaha Business Edition® Secured® Visa Card requires a $39 annual fee and doesn’t offer any type of cash back or rewards points, it offers credit limits up to 110 percent of your security deposit, putting the highest credit limit available at $110,000. If you need a large credit limit for a secured business credit card, this one should be on your list. It also pays interest on your security deposit, a perk you don’t get with the Wells Fargo Business Secured card. Depending on the size of your deposit – and with this card it can be quite high – the interest you earn can end up being a decent lump of cash when you want to close your account.

Wells Fargo Business Secured Credit Card vs. Union Bank Business Secured Visa Credit Card

Union Bank offers a business secured card that’s a good choice for companies planning to carry a balance. Although this isn’t necessarily a practice you want to get into the habit of, the Union Bank® Business Secured Visa® Credit Card comes with a nice windfall offering an APR that’s lower than other secured cards.

While it comes with a $30 annual fee and no rewards, the lower interest rate on purchases of 13.99 percent could make it a money-saver compared to the Wells Fargo Business Secured card. Beyond that, however, this card is relatively basic and has little to offer compared to the Wells Fargo Business Secured or the First National Bank of Omaha Business Edition Visa. Whether it’s rewards you want or a higher credit limit, either of the other card options might be better choices – especially if you don’t plan to carry a balance.

Learn more: Best secured business credit cards

Best cards to pair with this card

Some cards go well in pairs thanks to shared rewards programs or complementary features. While a business looking for a secured credit card likely won’t qualify for a card from an issuer requiring good to excellent credit, there are a few other cards worth knowing about in the Wells Fargo Business Rewards family. A nice perk is the ability to combine rewards across Wells Fargo rewards accounts if you have more than one.

• Discover it® Secured Credit Card: The Discover it® Secured Credit Card is a great no-annual-fee card that comes with a great rewards program you can use to supplement your monthly rewards with the Wells Fargo Business Secured card. Since both cards earn flat-rate rewards on all purchases it’s easy to calculate how much you earn. However, the Discover it® Secured Credit Card earns 2 percent back at gas stations and restaurants up to $1,000 in combined purchases each quarter (then 1 percent back). This makes the card ideal for purchases in those categories while you earn 1.5 percent back on everything else with the Wells Fargo Business Secured card. Additionally, the Discover it® Secured Credit Card rewards cardholders with a Cashback Match™ for all the cash back they earn at the end of their first year.
• Capital One Platinum Secured Credit Card: The Capital One Platinum Secured Credit Card is a decent personal credit card option that you can open with a security deposit as low as $49. Although the card has no rewards or sign-up bonus and comes with a relatively high ongoing variable APR, it’s a low-stakes option that you can pair with the Wells Fargo Business Secured card for only $49. Assuming a majority of your available cash is tied up in your Wells Fargo bank account and deposited as a security deposit for your business card, this is a good route to follow if you want to build personal credit with minimal spending while earning rewards on your business card with maximum spending.

Compared to other business secured credit cards for bad credit and no credit, the Wells Fargo Business Secured card is a great choice. Businesses typically look to secured credit cards when they have limited credit card options. Among secured credit cards for businesses, the Wells Fargo Business Secured Credit Card is a top choice thanks to its rewards program and no annual fee.

However, requirements to also bank with Wells Fargo might make this card a little less desirable for business owners who are already established at another institution. It’s also worth considering whether you’d like to build personal credit history or not. If you do, then perhaps consider opting for a personal credit card that can build your own credit history while earning rewards for business expenses. You may even qualify for a credit card with a decent unsecured rewards card and, as long as you don’t need a massive credit limit, you could have a lot of options to choose from.

All information about the Wells Fargo Business Secured Credit Card has been collected independently by Bankrate.com and has not been reviewed or approved by the issuer.