Brands and businesses have highs and lows, but successful ones stay true to their long-term vision. It is, therefore, safe to say that sometimes businesses find themselves in urgent need of cash. When such a situation arises, a credit card can provide a quick solution.
But unfortunately, most (unsecured) credit cards require a good credit score. So what happens if you or your company doesn't have an established credit score? In that case, you can obtain a secured credit card in Singapore. Firstly, let's look at what Singapore secured credit cards are.
Although limited, secured credit cards in Singapore are designed for businesses (or individuals) with not-so-good credit scores. They are typically provided to fulfil a company’s requirement for credit card with a huge credit line despite having a poor credit score. However, this would require you to provide collateral, typically a fixed deposit of at least S$10,000.
One of the main benefits of these cards is that they offer you the flexibility to either make regular payments or pay later with interest. If you are unable to repay a credit amount, banks use collateral to offset the debt, making this a secured option.
Here are some features of a secured credit card you should know before applying:
It is the maximum amount that can be spent on a secured credit card. In most cases, it is 80% to 100% of the collateral.
It is the interest charged on all cash transactions, such as withdrawals from ATMs.
Interest is charged on balances not paid by the statement due date, just like with a regular credit card. Even so, the interest rate may be lower than that of a regular or unsecured credit card.
Information about your purchases and credit repayment history will be sent to credit bureaus by credit card companies.
Before applying for a Singapore secured credit card, it's helpful to understand its pros and cons. Let's take a look.
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As a business owner with a poor credit history, a secured business credit card may be your only option. While secured business credit cards may not offer the same rewards as unsecured credit cards for small businesses, they can be beneficial for building or rebuilding your credit history. Furthermore, when your business grows, and your credit score improves, you may be able to qualify for a credit card without a security deposit.
So, who should opt for a secured business credit card:
Step 1: Ensure you meet the credit card eligibility criteria in Singapore
Here are the credit card application requirements of Singapore that you need to check to ensure your application for a Singapore secured credit card will be approved:
Step 2: Visit the nearest branch
To begin the process, fill out and submit the application form. You will need to activate the fixed deposit in order to park your collateral.
Step 3: Await approval
Once your application is approved, the card you have applied for will be delivered to the registered address.
Looking for the best Singapore secured credit card for your business? Well, not all banks have the same credit card eligibility criteria in Singapore, and they do not always offer the same benefits. So let's quickly examine each of them -
It’s always best to know your options, right? So, here are some of the alternatives you might want to know about.
It is a card that withdraws money directly from your checking account. This card can be used for direct payments or cash withdrawals at an Automated Teller Machine (ATM).
Unlike bank debit cards, these cards do not require a bank account. Once you load money onto the card, you can make purchases or withdrawals up to the amount of your deposit.
A multicurrency card lets you switch seamlessly between fiat currencies and digital assets. This prepaid card allows you to load multiple currencies onto the card, making international purchases much easier.
It is an unsecured loan you take from a bank or another financial institution to pay for your urgent financial needs. There is, however, a set repayment method and period associated with it.
Alternatively, you can choose Aspire Corporate Cards. They provide you all the benefits of a secured credit card, without having to deposit a security. They work as Multi-currency debit cards and come with an option for interest-free credit, a month's period for re-payment, and are much easier to obtain. Still wondering which card to choose, read our article: how to choose the right corporate card for your business.
Unsecured credit cards may not be available to you if your credit score is bad. Your application may also be rejected if you have no credit history. It is, however, possible to obtain a secured credit card, but collateral is required. Make sure you check your credit card eligibility in Singapore before applying.
Yes, if you do not meet the eligibility criteria of the card you are applying for, you may be rejected by the bank. This can be for several other reasons, including errors on your credit card application form or your credit report. A history of inadequate income or bankruptcy could also be one of the reasons.
To apply for a secured credit card in Singapore, most banks advise their customers to visit their branch. You must fill out a form to open a fixed deposit account where you can park your deposit as collateral. While it may take around 7 to 9 working days (may vary depending on the chosen card), applying for a Singapore secured credit card through your regular bank usually proceeds more smoothly and swiftly.
For a secured credit card in Singapore, banks will normally approve 80%-100% of the amount deposited as collateral as the credit limit. So you may not be able to raise it higher than that. There may be differences in policies between banks, so contact their customer service for more information.
You will need to settle the outstanding debt and request the bank to terminate the credit card. Upon completion of that step, you can notify the bank to release the pledge on your fixed deposit.