Wells Fargo Business Secured Credit Card Review

Full Review of Wells Fargo Business Secured Credit Card

Pros Explained

• Flexible Rewards Structure: With the Wells Fargo Business Secured card, you can choose a rewards structure that works best for you. You can earn 1.5% cash back on every purchase you make or earn one point per dollar spent, with each point worth up to a cent apiece, depending on how you choose to redeem them. If you opt for the rewards points option, you’ll get 1,000 bonus points if you spend $1,000 or more in any billing period.
• No Foreign Transaction Fees: Not all secured cards offer this feature, which is useful if you travel overseas for work or do business with foreign vendors. Where it’s not uncommon for all credit-card transactions in foreign currencies to be assessed a fee of up to 3%, the Wells Fargo Business Secured card doesn’t charge a foreign-transaction fee.

Cons Explained

• Annual Fee Applies for Every Card Issued: The Wells Fargo Business Secured has a $25 annual fee, which is levied on every card issued (up to 10 cards are allowed per account). So if you issued cards to nine employees on top of your own, you’d pay a hefty $250 in fees each year. If you need employees to use the account, consider a card that doesn’t charge for every authorized user. The BBVA Secured Visa Business card waives the annual fee for the first year; after that, it’s $40 per year. However, you can add employee cards to your account at no additional cost. 
• Minimal Benefits: While it’s not unusual for a secured business card to have few benefits, the Wells Fargo Business Secured is lighter on them than some competitors. For example, the First National Bank of Omaha’s Business Edition Secured Visa card offers a number of benefits missing from this card, including cell-phone protection and automatic discounts on qualifying purchases with Visa SavingsEdge.
• Your Credit Limit Must be Secured: If you’re not familiar with how this type of card works, the Wells Fargo Business Secured, like most secured cards, requires you to make a security deposit on your account that acts as your credit limit. That of course serves to limit how much you can use the card, especially at first (if you use the card responsibly, the limit may later be raised to exceed the deposit.) You can deposit anywhere between $500 to $25,000. 

The Wells Fargo Business Secured card is designed exclusively for business owners with little to no credit history, or who are rebuilding business’ credit that’s been damaged. Wells Fargo will report payment activity and card usage to the Small Business Financial Exchange, helping to establish or improve the credit score for your business. 

Over time, using the card responsibly should allow you to qualify later for unsecured business credit cards. Indeed, Wells Fargo says it periodically reviews the accounts for unsecured cards to assess their eligibility for upgrade to an unsecured business card. 

This card is also a good option in a simple card that provides rewards on your routine business expenses. You’ll earn a flat rewards rate on every purchase you make. Over time, you can build rewards and redeem them for cash back, merchandise, airfare, and more. 

Rewards Earning Details

The Wells Fargo Business Secured card allows you to choose between earning cash back and rewards points. With the former option, you’ll earn 1.5% cash back on every purchase you make. If you opt for rewards points, you’ll get 1 point per dollar spent on every purchase. And, if you spend at least $1,000 within any monthly billing period, you’ll get 1,000 bonus points. 

Rewards Redemption Details

If you opt for the cash back structure, your cash back is redeemable for statement credits or deposits to a Wells-Fargo checking or savings account. But you must wait longer to receive those rewards than with some competing cards. Earned cash back is credited only quarterly (in March, June, September, and December), where that credit is made monthly for the Chase Ink Business cards, for example.

If you decide to use rewards points, you have a number of redemption options. You can purchase gift cards in denominations of $50 (6,500 points), $100 (10,000 points), $200 (20,000 points), or $300 (30,000 points). For travel, you can redeem points to buy flights "at a reduced price," according to Wells-Fargo, or use them directly to buy flights, starting at 25,000 points per domestic flight. (There's a $24 fee for every redemption for an airline ticket.)

When you redeem points online, you’ll get a 10% point credit. For example, if you had 20,000 points and redeemed them online, you’d actually have 22,000 points to use. Because of the 10% bonus, opting for rewards points can give you more value than if you decided to use cash back rewards. 

How to Maximize Your Rewards

To make the most of the Wells Fargo Business Secured, use the card whenever you make a purchase for your company. You’ll earn 1.5% in cash back or one point per dollar spent. 

If you typically only spend $1,000 or so each month on business expenses, it likely makes sense to opt for rewards points rather than cash back and charge expenses of up to that amount to this card, as that would allow you to earn an effective rate of return higher than 1.5%. Charging $1,000 or more per month to the card entitles you to a bonus of 1,000 points. It’s also best to redeem your points online, since you get a 10% point credit for doing so.  

To see how those numbers play out, consider this example. Let’s say you spent $12,000 per year on your business, spending $1,000 each month. If you opted for cash back rewards, you’d get $180 in cash back. 

If you spent that same amount but earned rewards points instead, you’d get 12,000 points—for up to $120 in value. You’d also get 1,000 bonus points for every month in which you spend $1,000 or more, giving you 12,000 additional points. Now you have 24,000 points. Redeem those points online to get a 10% point credit, and you’d have a total of 26,400 points—which could offer a value of up to $264. 

By opting for rewards points over cash back, then, you could receive as much as $84 in additional value. However, if you spent considerably more than $1,000 per month the 1.5% cash back option would probably be the better rewards option.

Standard Benefits

• Zero-liability protection
• Business spending reporting

Cardholder Experience

Wells Fargo ranks near the bottom of the pack in J.D. Power Small-Business Credit Card Customer Satisfaction Study. In its 2020 survey, Wells Fargo scored below the average, receiving 819 out of 1,000 for its service to businesses. 

General customer service is available Monday through Saturday from 7 a.m. to 11 p.m. and Sunday from 9 a.m. to 10 p.m., Eastern Time. You can contact customer support through its online platform or by calling 1-800-225-5935. 

Security Features

The Wells Fargo Business Secured card has some basic security features that are standard for business cards. It includes account alerts and fraud monitoring. 

Our Verdict

If you’re a small business owner who's looking to establish credit for your business, the Wells Fargo Business Secured card offers a decent solution. Its rewards program allows you to earn cash back or rewards points, and using the card responsibly, by staying within your credit limit and making your payments on time, can help you eventually qualify for an unsecured card. Although the Wells Fargo Business Secured does charge an annual fee per card and offers no benefits to speak of, it imposes no foreign transaction fee, which is an asset when traveling abroad for work or ordering from foreign suppliers in their local currency.