Secured small business cards are offered by different establishments, including small and major banks, and other entities. They are available to business owners with tarnished and less than perfect scores and help boost ratings. The user’s savings account serves as a guarantee or collateral.
Establishments That Offer Secured Business Cards
There are small business cards by AMEX, Visa, MasterCard, and other issuers. They are usually offered by major and small banks, including BMO, CIBC, RBC, Toronto-Dominion, and others. Mortgage providers also offer secured cards to small businesses. Some banks offer cards to new businesses with a limited credit history. They usually come with annual fees but the funds deposited sometimes earn interest. The downside is that holders pay more in interest charges on cash advances and purchases. Some issuers also charge one-time fees. In general, these cards are intended to fill gaps in cash flows when they occur rather than make big-ticket purchases to start a business. Many issuers offer solutions with low limits of $200 to $500 while others feature larger limits of $1,000 to $25,000. While banks charge annual fees, some offer annual fee waivers during the first year. Additional cards may be available so that business owners control employee spending. Some banks offer between 3 and 10 additional cards. In addition, some secured cards come with beneficial features such as cash back and rewards that can be redeemed for brand name merchandise, travel rewards, gift cards, and account credits. Business owners are free to choose from different categories such as healthcare, travel, gas, utilities, office supplies, and many others. Credit unions also feature secured cards with beneficial features such as no cash advance fees and no annual fees, long grace periods of 25 days, and attractive interest rates. Another benefit is that unions offer high interest limits of $20,000 – $25,000 depending on the deposit made. In addition, unions also run their own rewards programs and advertise cards with merchandise, travel, and other rewards. Other cards have a limit of about $1,000 to use for everyday stationary, gas, and other purchases.
Benefits for Cardholders
In addition to convenient and flexible access to funding, business owners are offered a number of perks such as customized cards, business bill pay solutions, overdraft protection, cashback rebates, and others. Further add-ons and benefits include travel insurance and assistance, purchase protection, auto rental collision insurance, competitive interest rates, and others. Issuers also advertise introductory offers to attract customers.
CIBC offer business credit cards with great value and you can apply for one of those online. If you have a personal bad credit history, getting a business card might be a problem. In that case you might have to apply for a secured or bad credit card personally.
Credit accounts are also offered by gas stations and office supply stores, and the approval criteria are less stringent compared to brick-and-mortar financial institutions. The interest rates are often higher, and it is a good idea to pay the balance in full. A secured loan by your credit union or local bank is also an option provided that you have some asset to pledge as collateral.