5 Best Secured Business Credit Cards In Canada (Feb 2023)

January 21, 2023
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There are quite a few good secured credit cards for businesses in Canada, but some stand out above the rest for their impressive earning rates on business purchases. I constantly keep up with the latest options and policy changes and make my recommendations below based on my years of experience.

The Capital One Quicksilver Secured Credit Card is a no-fee secured credit card issued by Capital One, an established American bank that also operates in Canada. With the Capital One Quicksilver Secured Credit Card, you'll earn cash back on qualifying business purchases – with no caps – and it doesn't require a high credit score to qualify.

What Is A Secured Business Credit Card?

Secured credit cards are a type of credit card for individuals with a bad credit history looking to rebuild their credit score. Credit card issuers can’t take the chance with someone with low credit because they risk not receiving their money back – that’s why secured credit cards require a security deposit before you can start using your card.

Secured cards have a limit built-in – you can’t spend more than you deposited, and you will only get your deposit back if your account is in good standing when you close it. Secured cards usually have low annual fees, and anything above $50 is considered a high fee. Secured cards don’t offer much in terms of perks and benefits other than reporting monthly to the biggest credit card bureaus in Canada, like Equifax and TransUnion. They’re a good option to build your credit, but if you’re looking for the best perks, you may want to look at some premium business credit cards.

The Best Secured Business Credit Cards In Canada

1. Capital One Quicksilver Secured Cash Rewards Credit Card – Best For Personal Credit Improvement 

Pros

  • No annual fee
  • Individuals with bad or low credit scores are qualified
  • Earn cashback without capping on every purchase
  • Rewards have no expiration.

Cons

  • High Annual Percentage Rate of 28.49%
  • No welcome bonus or introductory offers

2. First National Bank Business Edition Secured Mastercard – Best For No Credit Assessment

Pros

  • Low annual fee worth $39
  • Individuals with bad or low credit scores are qualified
  • Interest rate applied on your security deposit.

Cons

  • No welcome bonus or introductory offer
  • High Annual Percentage Rate of 23.24%

3. Neo Financial Secured Card – Best For Guaranteed Approval

Pros

  • Earn 5% cash back on eligible stores
  • No annual and over limit fees
  • Redeem rewards anytime you want

Cons

  • No insurance coverage was applied
  • High earn rate is only limited to partnered stores

4. Home Trust Secured Visa Card – Best For Visa Credit Card Acceptance

Pros

  • No annual fee
  • No minimum income required
  • Bankruptcy-discharged individuals are qualified

Cons

  • No discounts or rewards offered
  • High-interest rate of 19.99%

5. Plastk Secured Visa Rewards Credit Card – Best For Introductory Offer And Welcome Bonus

Pros

  • 0% interest rate on the first three months of membership
  • Individuals with bad or low credit scores are qualified
  • 25 days grace period 

Cons

  • Has an annual fee worth $120 
  • Expensive fees for foreign transactions

How Do Secured Business Credit Cards Work?

Technically, secured business credit cards are mainly for building and improving credit scores for business and personal. Unsecured credit cards are the opposite of the secured types. It does not require a minimum deposit to determine your credit limit like the secured credit cards. 

Secured credit cards are not debit or prepaid cards. Purchases made are the same as traditional credit cards. You charge the purchase using your credit card with a credit limit based on your deposit. 

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The purchases charged to the secured credit cards are paid when you receive the statement from the issuer. To achieve your credit goals, you must pay regularly. Your performance is automatically reported to the credit bureaus, where credit card companies access an individual’s credit ratings and other details. 

Constant regular payments and keeping your balances low are significant ways to replenish or build your credit score. Over time, once you establish a good credit score, you can be eligible to apply for unsecured credit cards. 

Why Get A Secured Business Credit Card?

You should acquire a secured business credit card to improve bad credit scores or build a credit history if you have none. Credit card issuers typically require a decent credit score before approving an applicant. For small business owners, it’s an excellent way to use if they can’t qualify for unsecured credit cards. 

Rewards To Look For In A Secured Business Credit Card

Each of the secured business credit cards has varying features. Some are straightforward, and you will only improve your credit score from purchases. Other cards may also provide rewards or cashback, which will require fees. It’s advantageous if you can get perks from a secured credit card based on which card you will get. 

Types Of Secured Business Credit Cards in Canada

There are only a few types of secured business credit cards in Canada. It includes cashback and no annual fee credit cards. 

#1 Cash Back Credit Cards

The business-secured credit cards are best if they allow cardholders to get cashback from purchases. Mostly, these cards don’t offer rewards or cashback; they only help cardholders improve their credit scores. However, a few secured credit cards offer cashback, such as the Neo Financial Secured Card. 

#2 No Annual Fee Credit Cards

Most secured credit cards have high-interest rates. Meanwhile, some of these don’t carry annual fees. It lessens the expenses you must pay every year. 

How To Choose A Secured Business Credit Cards In Canada

When getting a secured business credit card, you must consider factors that affect your usage. Some of these cards don’t have many features, but you can always choose those that offer significant benefits. 

Welcome Bonus

You can opt for a secured business credit card with a welcome bonus. When you start your purchases, it gives you cashback or rewards in the first membership period. That depends on the issuer of your card. 

Annual Fee

Annual fees are an additional load to cardholders' expenses. If you can only choose secured credit cards without annual fees, it’s much better. However, most no-annual-fee credit cards offer few benefits and features. 

Minimum Security Deposit

Security deposits determine your credit limit. Each of the secured credit cards for business has a required minimum deposit. Make sure it will fit your ability to pay and won’t weigh you down from the expenses. 

Earning Rate

Secured credit cards with rewards and cashback have earning rates. Choose cards that offer high earning rates. Additionally, these cards usually have annual fees. 

Insurance Coverages

Insurance coverages of credit cards are offered to protect travel and purchase of cardholders. Without it, you are at risk of some occurrences. A credit card with basic or comprehensive insurance coverage is a good option. 

Rewards Flexibility

Standard cashback credit cards only provide the accumulated cash to a statement credit. Meanwhile, you can redeem rewards in various options, such as gift cards, discounts, and more. 

How To Redeem Your Secured Business Credit Cards Rewards

Only a few secured business credit cards earn cashback and rewards. However, redeeming the rewards is similar to unsecured credit cards. Depending on the issuer, they might require you to redeem it through a mobile app, online website, or participating stores. 

Cashback is usually applied as a statement credit, but some issuers allow cardholders to redeem it as gift cards, discounts, and more. On the other hand, rewards earn points from purchases and provide flexible redemption options. Ask your credit card issuer how their programs work. 

How To Apply For A Secured Business Credit Card in Canada

The primary way to apply for a secured business credit card in Canada is to visit the card issuer’s website. In some cases, they accept applications online with attached requirements. Otherwise, if you want to make a direct application, you can proceed to its nearest branch and apply there in person. 

Eligibility

Secured credit cards are for credit builders, and it doesn't require complicated eligibility. The basic requirements are the following: 

  • You must be a Canadian resident
  • You must possess the majority of the age in your province or territory. For reference, the age of the majority in Manitoba, Alberta, Ontario, Quebec, Saskatchewan, and Prince Edward Island is 18 years old, while 19 years old in all other provinces.

Credit Score And Income

Secured credit card issuers don’t usually require credit scores or income. Getting this can help them build and improve their credit scores and history.  

Secured Business Credit Cards FAQs

Are secured business credit cards worth it?

Secured business credit cards are worth it for small business owners building credit scores and individuals who need to improve their credit history. Most of these cards don’t have annual fees, which is a good start for credit builders. 

Credit card issuers rarely offer insurance coverage, cashback, and rewards. These are typically straightforward credit cards where you can purchase and enhance your credit performance. However, the Annual Percentage Rates are commonly high for purchases and cash advances. 

Furthermore, perks and other beneficial features are less in secured business credit cards. The primary objective is to help you with the credit. Over time, you will be eligible for unsecured credit cards once you establish a good credit score. 

Can I get a business credit card with bad personal credit in Canada?

Yes, you can still acquire a business credit card even if you have a low credit score in Canada. Depending on how low your credit score is, there are still card issuers that accept it. Most likely, they will at least require a decent credit score, or you can build your credit using secured credit cards.  

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