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Bank of America Secured Card, Reviewed (Plus 3 Alternatives)

Maddie Shepherd

Staff Writer at Fundera
Maddie Shepherd is staff writer at Fundera. Beyond her deep knowledge of small business financing, Maddie's specialty is business credit cards—she'd love to help match your business with the credit card that benefits you most!
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If your search for a business credit card has brought you to looking into the Bank of America secured credit card—and secured business credit cards in general—then you’ve figured out something very important about the business credit card process. It’s that your personal credit score is one of the most important factors that’ll decide whether or not you qualify for business credit card offers.

As counterintuitive as this seems at the surface, it makes sense if you think about it: Your personal credit score indicates what kind of spender you are. Since you—as the business owner—are the one doing the spending on your business credit card, issuers will look to your personal credit score to decide if you qualify for their credit card.

But that’s still really frustrating in practice—especially as you’re trying to qualify for the best business credit cards. As a business owner, you might prioritize your business’s finances over your own personal finances, and your personal credit score might suffer as a result. If you’re unable to qualify for an unsecured business credit card because of your personal credit score, your next move is to improve your personal credit.

One of the most surefire ways to do this is through a secured personal credit card, and one of your many choices is the BankAmericard Secured Credit Card. We’ll go through the features of this Bank of America secured option, plus examine how it stacks up against other choices for business owners looking to build credit.

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What the Bank of America Secured Card Can Offer Business Owners

The BankAmericard Secured Credit Card could be a fit for you—but let’s go through the finer details of secured cards in general before we break down the specifics of the Bank of America secured card:

What’s a Secured Credit Card?

As you might imagine from its name, a secured credit card has a security deposit that you have to provide up front. This money—the deposit—acts as collateral to secure the card. It mitigates the risk that credit card issuers, like Bank of America, take on by extending a credit card to those with lower personal credit scores. (With an unsecured credit card, as you’ll expect, this isn’t required—that’s riskier for the card issuer.) 

In the worst case scenario that you can’t repay what you owe on the card, the issuer can simply seize the deposit you’ve put down against the secured credit card—much like a loan secured with collateral. This is inherently a much less risky deal for an issuer than extending an unsecured business credit card in which a security deposit isn’t required.

Basically, secured credit cards like the Bank of America secured card or other similar cards are meant for building credit. They offer people with lower credit scores an opportunity to access a credit line despite their credit history. When you use a secured credit card responsibly over time, you’ll eventually improve your credit score and, as a result, open up the opportunity to qualify for an unsecured credit card.

The Bank of America Secured Credit Card, Reviewed

Have a good hold on secured credit cards in general, and whether they’re the right move for you?  Let’s look specifically at the Bank of America secured credit card.

What kind of terms does this particular secured personal credit card offer business owners who want to build credit for future funding potential? Let’s check it out:

BankAmericard Secured Credit Card Line of Credit Amounts

Depending on your credit history, your income, and how much you’re able to put down as a security deposit, you’ll be able to access a credit limit of anywhere from $300 to $4,900 with the Bank of America secured credit card.

If you provide a security deposit of more than your income and credit history can qualify you for, Bank of America will return the difference to you as a check.

BankAmericard Secured Credit Card Rates

One thing to understand about secured credit cards is that you’ll accumulate interest on your overdue spending even though you have a security deposit on the line of credit. Just like any unsecured credit card, secured credit cards will come with an APR that they’ll charge on any balance you carry from month to month.

The Bank of America secured card is no exception. You’ll have to check the terms for the BankAmericard Secured Credit Card to see its current ongoing APR for overdue spending, as the rate can change and will vary based on the market Prime Rate.

As with any credit card, carrying a balance with this secured card will cost you in money and in credit score points. And, of course, if the point of using a secured credit card for now is to build your credit score and you think you’ll carry a balance, you might not be quite ready for a credit card at all yet—we’ll talk another option below.

BankAmericard Secured Credit Card Fees

You also have to pay to be able to build credit with this secured credit card. More specifically, this secured credit card comes with an annual fee of $39. Additionally, you’ll have to pay a balance transfer fee of either $10 or 3%, whichever amounts to the greater sum of money.

Not to mention, you’ll have to shell out $10, 3%, or 5% for cash advance with this card, depending on the manner through which you acquire the cash. Plus, you’ll have to pay up to $38 for a late payment and up to $27 for a returned payment.

Finally, you’ll have to pay a foreign transaction fee of 3% of every transaction you make abroad.

Again, these numbers are subject to change, so you can check out the details for the BankAmericard Secured Credit Card’s fees here—it’s crucial to go over your current spending habits to see if this card’s fees will cause you to rack up a lot of charges.

BankAmericard Secured Credit Card Perks

One of the main perks that distinguishes the Bank of America Secured Card from the crowd is its deposit return practices. After a year with this secured card, you can have your account reviewed for a return of your security deposit. This decision will be based on your overall credit history, and if you qualify, you can use your card without the security deposit.

Most secured cards require you to go through the whole application process again to access unsecured credit after spending responsibly, but the Bank of America Secured Card makes unsecured credit that much easier to access.

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The Top Alternatives to the Bank of America Secured Credit Card

With the Bank of America secured credit card covered, let’s explore some of the other choices available to business owners who need to build credit, or who just want to have access to a card to spend on:

Best Secured Personal Credit Card Alternative: Capital One Spark Secured Mastercard

The Capital One Secured Mastercard is another option for business owners looking to build credit with a secured card. Just like the Bank of America secured card, the Capital One Secured Mastercard is a secured personal credit card that provides credit to business owners whose personal credit score needs to be built—or rebuilt.

Beyond the fundamentals of being a secured credit card, however, the Capital One Secured Mastercard differs wildly from the BankAmericard Secured Credit Card.

For starters, unlike the Bank of America Secured Credit Card, the Capital One Secured Mastercard doesn’t come with an annual fee. So, you won’t have to pay yearly for this opportunity to build credit.

Additionally, based on your credit history, the Capital One Secured Mastercard could let you make a security deposit that can be as small as 25% of your credit line. Meanwhile, the Bank of America Secured Credit Card requires a security deposit of 100% of your credit line, no matter your creditworthiness.

All that said, to qualify for an unsecured card after improving your credit with the Capital One Secured Mastercard,  you’ll have to apply for a new credit card, whereas the Bank of America secured credit card facilitates the process for you by allowing you unsecured credit on the same card.

If you’re in the market for a secured credit card, decide whether this ease into unsecured credit is worth sacrificing the perks that the Capital One Secured Mastercard offers.

→TL;DR (Too Long; Didn’t Read): With a smaller initial deposit requirement and no annual fee, the Capital One Secured Mastercard is a better alternative to the Bank of America secured card for those who want to use a personal secured credit card to build or rebuild credit.

Best Unsecured Credit Card for Poor Credit Alternative: Capital One Spark Classic for Business

Another option for business owners for less-than-stellar credit? The Capital One Spark Classic for Business.

This is the only unsecured business credit card on the market that’s available to business owners with poor credit who need to get their scores up. If you’re working with a personal credit score that’s 550 or above, then you might be able to get your hands on the Spark Classic and its unsecured credit limit.

Not to mention, you can rack up cash back rewards as you spend with the Spark Classic—for every dollar you spend on your business, you’ll see a 1% unlimited cash back return. Plus, you won’t have to pay an annual fee to access these rewards.

Plus, Capital One will report your activity on the Spark Classic to personal credit bureaus, so you’ll be able to improve your credit swiftly if you spend responsibly.

Even if you’re not quite able to qualify for the Spark Classic, this unsecured business credit card is the perfect next step for business owners who are building personal credit with a secured credit card.

→TL;DR: If you can qualify for this unsecured card—and know you’ll be able to pay off your bills in full and on time—then this is your best option. Not only can you build your credit score, but you can earn cash back rewards at the same time.

Best Prepaid Business Debit Card Alternative: Bento for Business Mastercard

Maybe after reading through all of this, you’ve decided that you’re not quite in a position to take on card that reports to a credit bureau yet.

That’s entirely fine—and, frankly, you should feel really good about recognizing this! You don’t want to open up even a secured line of credit until you know that you’re going to be ready to pay off your bills in full and on time. That’s the way you’ll build credit for yourself and your business.

A great way to help yourself feel out when the time is right to apply for that secured card is to get a prepaid business debit card first. With a prepaid business debit card, you load funds from your business bank account onto cards, and only spend what you have. You’ll easily know if you’re not spending as you should because you can’t use the card beyond your preloaded funds—but these cards don’t report to credit bureaus, so you can build up good financial habits here on your own terms.

We love Bento for Business, which not only allows you to spend wherever Mastercard is accepted, but also hooks into your business accounting software. That way, you can really get a handle on not only how you’re spending, but where you’re spending, too.

→TL;DR: If you’re not totally sure you’re ready to take on a line of credit yet, try to set good spending patterns with a prepaid debit card first. Bento is the best pick for this—plus it integrates into your accounting software to help you track spending. (Note: This isn’t a credit-builder.)

Is the Bank of America Secured Credit Card Right for You?

The verdict on the Bank of America secured card depends on your own particular situation.

  • If your personal credit score rounds in somewhere above 550, then you might be able to qualify for the unsecured Spark Classic—in which case, you should definitely opt for it. With unsecured credit, cash back rewards, and no annual fee, the Spark Classic is far and away the best credit card for business owners whose credit isn’t quite excellent.

However, if you’re not yet able to qualify for the Spark Classic, you’ll need to take a look at your secured credit card choices.

  • If you’re willing to prioritize ease into unsecured credit, then the Bank of America secured card could be your best option.

That said, if you’re not worried about easing into unsecured credit, then you should keep looking.

  • The Capital One Spark Secured Mastercard is likely a better choice for you—with no annual fee and a flexible security deposit, this is one of the best tools for building credit available on the market.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

Maddie Shepherd

Staff Writer at Fundera
Maddie Shepherd is staff writer at Fundera. Beyond her deep knowledge of small business financing, Maddie's specialty is business credit cards—she'd love to help match your business with the credit card that benefits you most!

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