Credit Cards

How To Get A Secured Business Card

By David Krug David Krug is the CEO & President of Bankovia. He's a lifelong expat who has lived in the Philippines, Mexico, Thailand, and Colombia. When he's not reading about cryptocurrencies, he's researching the latest personal finance software. 7 minute read

We did not rank the Union Bank Business Secured Visa Card well enough to include it among the best credit cards for small businesses. Not only is it not included in our evaluation of the top secured credit cards, but you won’t find it anywhere else, either. However, it might be a potent instrument that helps a small company owner with less-than-perfect credit get closer to their financial goals more quickly than they ever imagined.

This starter credit card is worth considering if you’re trying to repair your credit after bankruptcy or just aren’t a frequent card user.

New cardholders must make an initial deposit into a secured, FDIC-insured collateral account, which functions similarly to a savings account but does not accrue interest. The minimum first deposit amount is $500. As much as $25,000 is possible. Your deposit is always the same amount as your credit line.

The money belongs to you, but Union Bank can legally keep it until your credit card account is terminated and the balance is paid in full. This is a serious issue for cash-strapped business owners who must rely on money tricks to stay afloat.

Fortunately, Union Bank does a monthly report to the credit agencies including helpful data like your payment history and credit utilization. Your company’s credit score might rise gradually with careful card use and regular payments.

The need to submit an in-person application might be the card’s biggest drawback. Applications submitted through email or telephone will not be accepted. That works out great for company owners in the states of California, Oregon, and Washington, where Union Bank has several branches, but not so well for those in other areas.

What follows is a discussion of its salient characteristics, advantages, disadvantages, and general applicability.

Important Characteristics

Requirement for an Initial Deposit and Refund

Union Bank will ask you to fund your collateral account after they have conditionally accepted your credit application.

There’s a $500 minimum required for the initial deposit. All the way up to $25,000 may be deposited in $50 increments. Your credit line will never exceed the amount you have on deposit.

For instance, if you put down a deposit of $5,000, your credit line will be $5,000. It’s important to note that your credit score has nothing to do with the size of your deposit; if you can afford to make a bigger deposit, you get a bigger credit limit. Please be aware that until your account is paid in full and closed, you will not have access to the monies you have placed.

Union Bank may, at its option, convert your collateral account to a standard savings account that pays interest and authorizes withdrawals when upgrading to an unsecured Union Bank business credit card.

Credit Limit Raises

Making a new deposit into your collateral account (in $50 increments) will boost your credit limit. Your total aggregate collateral account deposit cannot exceed $25,000 at any time, even if you don’t formally ask for the increase.

Credit Bureau Information

Union Bank sends data on cardholders’ payment histories and credit use to the major credit agencies once each billing cycle. While there are a number of elements that go into determining a business’s credit score, it is true that making payments on time and being careful with credit utilization will help improve your score.

If bouncing back from credit difficulties is a top priority, then consider reading about these seven strategies.

APR (Annual Percentage Rate)

The standard purchase and balance transfer interest rate for this card is 15.49%. This rate is effective immediately and there is no promotional period for making a first purchase or transferring a balance.

Important Charges

There is a $30 yearly charge for the Union Bank Business Secured Visa Card. The charge for doing a foreign exchange is 3%. Fees for balance transfers are $10 or 5%, whichever is larger. If you need a cash advance, you should expect to pay either $15 or 5% of the amount borrowed. Fees for late or returned payments range from $35 to $39, respectively.

SavingsEdge on Visa

The Union Bank Business Secured Visa Card is a member of Visa SavingsEdge, a business-only discount program that provides consistent savings of 5% or greater at thousands of local, national, and online retailers.

Among them are such household names as Alamo, National, Panera Bread, and La Quinta Inn & Suites. The Business Platinum Card from American Express features a similar rewards scheme.

Additional Visa-Backed Advantages

This card comes with a wealth of other perks that are often free to use, in addition to Visa SavingsEdge. The most helpful ones include free loss and damage insurance for rental vehicles paid in full with the card, emergency card replacement and cash withdrawal, and reporting lost or stolen cards.

Credit Required

If you operate a business and have fair or poor credit, you may qualify for a Union Bank Business Secured Visa Card. Your application may be reviewed more carefully if you have filed for personal or commercial bankruptcy during the preceding several years.

Benefits

  1. Option for Credit Limit Increase Up to $25,000. If you have the cash, you can increase your credit limit to a maximum of $25,000 by raising your collateral account deposit. You do not need to formally request a credit limit increase, which is a significant difference from the majority of other secured credit cards. This is excellent news for entrepreneurs whose financial resources exceed their credit scores.
  2. Low Persistent Interest Rate The Union Bank Business Visa Secured Card features a comparatively low continuing interest rate for a secured credit card: 15.49% APR for purchases and balance transfers. Many other secured credit cards have standard APRs of 20% or more. This is an excellent reward if you appreciate the ability to carry sums from month to month.
  3. Visa SavingsEdge Provides Excellent Discount Opportunities. Visa SavingsEdge enables you to access discounts of up to 5% (and often greater) at hundreds of partner retailers, the majority of which operate coast to coast. If you often dine out or travel domestically for work, the hotel and foodservice suppliers can assist you. Check out our guide to saving money at restaurants for further suggestions on saving money when dining out.
  4. Visa-Backed Benefits. Although the Union Bank Business Secured Visa Card lacks a rewards program, its Visa-backed features are a consolation. The most helpful (and possibly valuable) features are gratis damage insurance on rental vehicles purchased in full with the card, emergency card replacement and cash disbursement, and complimentary damage insurance on rental cars paid in full with the card. Most don’t demand out-of-pocket expenses.
  5. Creates credit via responsible use. If you use this card properly and make on-time payments (ideally in full each month), you will gradually develop your business’s credit and increase its credit score. Eventually, you may be able to qualify for more advantageous business credit cards, such as the Chase Ink Business Preferred.

Drawbacks

  1. Charges a yearly fee. The yearly charge for the Union Bank Business Secured Visa Card is $30. While this is reasonable in comparison to more generous business credit cards, it is $30 more than many customers would want.
  2. Apply in person only. For prospective cardholders who do not reside on the West Coast, the in-person application requirement for this card is a significant obstacle. Fortunately, Union Bank accepts online applications for its other business credit cards, including Union Bank Business Visa.
  3. No benefits. This card lacks a rewards program, therefore it does not offer cash back, points, travel incentives, or any other form of loyalty money. Obviously, this is disappointing for cardholders expecting rewards for routine business expenses. Our review of the top cash-back credit cards contains several further alternatives.
  4. No opening account bonus. The Union Bank Business Secured Visa does not offer a welcome bonus. Many other business credit cards do provide this perk, such as Capital One Spark Cash for Business, which awards new cardholders with $500 after meeting spending conditions in the first three months of account setup.
  5. There is no overdraft protection for deposit accounts at Union Bank. The Union Bank Business Secured Visa does not offer overdraft protection. Compared to Union Bank’s consumer credit cards, notably the Union Bank Secured Visa, this is a significant disadvantage. It is also a poor bargain for those who occasionally overdraw their checking account owing to liquidity problems — a regular issue for small business owners with accounts receivable backlogs.
  6. There is no 0% APR Promotion. There is no introductory 0% APR incentive for purchases and debt transfers with this card. The majority of Union Bank credit cards offer this benefit. If you want to finance a major up-front purchase or transfer a high-interest amount from another credit card, these cards are superior.
  7. No Travel Benefits. If you often travel, the Union Bank Secured Visa Credit Card is not the best option. It lacks extensive travel privileges like access to airport lounges, priority boarding, travel credits, and in-flight discounts. American Express Platinum Delta SkyMiles Business Credit Card and Capital One Spark Miles for Business are more desirable alternatives. Check out our list of the top travel rewards credit cards to learn more about the perks of a travel rewards credit card.
  8. Foreign Transaction Fee of 3% This card assesses a 3% foreign transaction fee on all international purchases. This is a significant issue for company owners who frequently go abroad for professional reasons. The absence of a rewards program, which would at least somewhat offset the non-negotiable cost, exacerbates the issue. A number of competitive business credit cards do not charge international transaction fees.
  9. Assesses Penal Interest. The Union Bank Business Secured Visa carries interest penalties. This is an unwanted and perhaps expensive need for business owners who periodically miss statement due dates owing to cash flow challenges or other concerns. It just takes one missed payment for this card’s interest rate to go to 30% APR, which may add hundreds to your yearly bill if you carry a load from month to month.

Bottom Line

A $25,000 credit limit should be more than adequate for the kinds of everyday credit card costs incurred by most self-employed professionals and small company owners.

The Union Bank Business Secured Visa is an excellent choice if this describes your current financial situation. The $25,000 maximum spending restriction may be insufficient for more capital-intensive businesses.

Curated posts

Someone from Phoenix, AZ just viewed Best Credit Unions in Texas