If you are on the internet in search of the best business credit cards, you have come to the right spot. We have all the information you need to select the best business credit card to benefit you and your business.
We hope you are an entrepreneur or a business owner and want to keep your personal and business expenses separate. We know that it is quite a task to manage all your company’s expenses. Don’t worry, a business credit card will help you keep a tab on all your expenditures.
But which business credit card to select? You don’t simply go on and select a card that offers the lowest rate of interest. We hope it is as simple as that, but it’s not. You have to analyze a ton of things before making such an important decision.
Read along to find out the best 15 business credit cards, their features, the rewards offered, and their APR (annual percentage rates). Let us help you select the best business credit card that can benefit your business.
What Is A Business Credit Card?
A business credit card is issued to business owners and entrepreneurs to keep track of their company expenses. The principle of a business credit card is similar to that of a personal credit card.
While personal credit cards are issued to a person, business credit cards are issued in the company’s name. It has higher credit limits and offers exclusive rewards for its beholder. It helps keep the company expenses apart from personal expenses.
Business credit cards are available for businesses of all shapes and sizes. The credit limits of the card also vary according to the business revenue. While it has a higher interest rate when compared to personal credit cards, business credit cards help a company build a robust credit history so that they can have easier access to loans.
It can also support a business by covering its expenses on a rainy day. Business credit cards are an essential financial tool to keep your business up and running.
Top 15 Business Credit Cards
1. Capital on Tap Business Credit Card
Capital on Tap is a lifetime free credit card that offers cashback, reward points, and access to advanced accounting software. It also offers a 42-day interest-free period. Also, get up to £250,000 in credit and no FX and ATM fee.
It is a no-nonsense and basic credit card that small businesses can utilize to build a strong credit score. It also offers employee cards with no additional charges.
| Overview | • Annual Fee: None • Interest-Free Period: Up to 42 days • APR: 15.5% and above • Best For: Cashback rewards |
| Features | ✨Up to £250,000 in credit ✨No FX or ATM fees ✨Compatible with all popular accounting software ✨Get virtual cards by using the credit card app ✨24/7 customer support. |
| Rewards | ✔️1% cashback on all card spending ✔️Accrue reward points and exchange them for cash ✔️Access the savings on popular cloud-based software such as Slack ✔️and Dropbox |
| Eligibility | • A business turnover of at least £24,000 • The business should be an LLP or Ltd based in the UK • Active director or majority shareholder with over 25% ownership • No county court judgments for the past 12 months |
| Pros | ✅No annual fees ✅Offers a high credit limit ✅Offers cashback and other features ✅Accounting software integration |
| Cons | ❌No travel rewards ❌Eligibility requirements are difficult to achieve for small businesses. |
2. American Express Business Gold Card
The American Express Business Gold Card is one of the cheapest credit card options meted out by American Express. It has a higher annual fee and is ideal for large businesses and high spenders.
Small businesses can use it as a one-year use card as there are no annual fees for the first year. It also offers lucrative rewards, cashback, membership points, and global and travel insurance.
| Overview | • Annual Fee: £195 (Free for first year) • Interest-Free Period: None • APR: N/A • Best For: High spenders |
| Features | ✨No interest for up to 54 days after making the purchase ✨24/7 customer support for users around the world ✨20 complimentary employee Gold Cards ✨Emergency card replacement |
| Rewards | ✔️Intro offer ✔️Spend £6,000 in the first 3 months to earn 40,000 Membership Reward Points ✔️Purchase any amount between 14 and 17 months after getting the ✔️membership to get an extra 20,000 Membership Rewards Points ✔️Global travel and accident insurance. |
| Eligibility | • Permanent UK home address • Your business has a UK-based bank or building society account. |
| Pros | ✅No annual fee for the first year ✅Free employee cards ✅Wide range of rewards and offers ✅Global assistance. |
| Cons | ❌High APR ❌Annual fee of £195 after the first year ❌AMEX cards are not supported in certain countries ❌Only high-spending users are rewarded. |
3. Barclays Select Cashback Business Credit Card
Unlike many other cards on the list, the Barclays Select Cashback Business Credit Card does not have an annual fee, yet it offers higher interest-free periods, huge cashback, insurance for cardholder misuse, and access to FreshBooks.
However, the card does have a lot of disadvantages like high FX fees, no loyalty system, and are not suitable for large and international businesses.
| Overview | • Annual Fee: £0 • Interest-Free Period: None • APR: 27.5% (variable) • Best For: Small businesses and startups. |
| Features | ✨ 56 days free of interest for business purchases ✨ The card can be connected to Apple Pay ✨ FreshBooks integration |
| Rewards | ✔️ 1% uncapped cashback on all transactions ✔️ Insurance for cardholder misuse and purchase protection ✔️ Free FreshBooks access. |
| Eligibility | • Business with a turnover of £10,000 or more • No default payments in the past few years • You have not been rejected for a Barclays Commercial Card in the past 6 • months |
| Pros | ✅ Ideal for small businesses and startups with low turnover ✅ Long interest-free period for purchases ✅ FreshBooks integration ✅ Insurance against fraud and card misuse |
| Cons | ❌ No reward points or loyalty system ❌ High annual purchase rate ❌ High foreign transaction fee ❌ It is not suitable for large businesses and international companies. |
4. Capital On Tap Business Rewards Credit Card
Capital on Tap Business Rewards Credit Card is a different take on the credit card Capital on Tap Business Credit Card. Unlike the latter, it charges an annual fee of £99.
While it charges an annual fee, the credit card offers huge cashback, rewards, and accounting software integrations. It is ideal for large businesses and high spenders who seek a straightforward way to manage their business expenditures.
| Overview | • Annual Fee: £99 • Interest-Free Period: Up to 42 days • APR: 15.5% APR (variable) • Best For High spenders |
| Features | ✨ No foreign transaction or ATM fees ✨ Get up to £250,000 in credit ✨ 24/7 customer support ✨ Virtual cards are available with the credit card app ✨ Unlimited employee cards with expense tracking |
| Rewards | ✔️ 1% cashback on all card spending ✔️ Access to popular accounting software like Dropbox and Slack ✔️ Reward points can be exchanged for cash |
| Eligibility | • Business with a turnover of more than £24,000 • An LLP or Ltd company based in the UK • No county court judgment (CCJ) of a high court judgment for the past 12 months |
| Pros | ✅ No ATM and foreign transaction fees ✅ High uncapped cashback offers ✅ Free complimentary employee cards ✅ Integration with various accounting software |
| Cons | ❌ High annual fee. ❌ Eligibility requirements are unattainable by small businesses. |
5. Santander Business Cashback Credit Card
Santander Business Cashback Credit Card offers an uncapped 1% cashback on all purchases. While it charges an annual fee of £30, it is easily recovered by the rewards the credit card offers.
It is a good overall credit card that offers good rewards with moderate charges on transactions. Small businesses can hugely benefit from the Santander credit card as it has no FX fees and offers additional cards for employees.
| Overview | • Annual Fee: £30 • Interest-Free Period: None • APR: 23.7% APR (variable) and 18.9% p.a. purchase rate (variable) • Best For: Small businesses |
| Features | ✨ No foreign transaction fees when used abroad ✨ Up to 4 additional cards with customizable limits |
| Rewards | ✔️ 1% uncapped cashback |
| Eligibility | • Already have a current business account with Santander • You don’t own a business cashback credit card • Should be a business with no more than two partners |
| Pros | ✅ Uncapped cashback offers ✅ Suitable for tiny businesses ✅ No FX fees |
| Cons | ❌ The card can be used only for business purposes only ❌ Very limited software integration ❌ High annual fee ❌ Unsuitable for large businesses |
6. RBS Business Plus Credit Card
High-spenders can hugely benefit from the RBS Business Plus Credit Card. The annual fees are waived for businesses that spend more than £6,000. Additionally, you can also get rewards and cashback offers on every spending.
It offers a 56-day interest-free period and access to ClearSpend, an advanced accounting software. It can also benefit businesses that highly depend on transportation.
| Overview | • Annual Fee: £30, but £0 when you spend over £6K/year • Interest-Free Period: None • APR: 24.3% APR (variable) and 16.9% p.a. purchase rate (variable) • Best For: Existing RBS customers |
| Features | ✨ 56 days free of interest on purchases ✨ Generate reports of business spending using Smart Data. ✨ ClearSpend mobile app integration |
| Rewards | ✔️ 1% cash back at fuel stations and EV charging stations |
| Eligibility | • You should be an existing RBS customer • Your revenue should not exceed £2 million |
| Pros | ✅ High foreign transaction fees ✅ Very limited rewards and offers ✅ Must be an RBS account holder ✅ High annual fee for low-spenders |
| Cons | ❌ 1% cash back at fuel stations and EV charging stations |
7. Metro Bank Business Credit Card
Metro Bank business credit card offers a very low APR of 18.90%. So, you must be thinking that it might be very hard to get a Metro Bank credit card. No, it is a relatively easy and cheapest way for small businesses to get credit.
While there are very few rewards for low spenders, high spenders can benefit hugely from the Metro Bank business credit card. However, you must have a business current account in the bank to get the credit card.
| Overview | • Annual Fee: £0 • Interest-Free Period: None • APR: 18.90% APR • Best For: Small and medium enterprises |
| Features | ✨ Up to 56 days of interest-free periods after purchase ✨ No FX fees for countries using SEPA |
| Rewards | ✔️ None |
| Eligibility | • Must own a business current account at Metro Bank |
| Pros | ✅ Low and non-variable APR ✅ No annual fee ✅ No FX fees in countries trading in Euro |
| Cons | ❌ No rewards of any kind ❌ No cashback offers ❌ High FX costs outside countries using SEPA ❌ No employee cards are offered. |
8. HSBC Commercial Card
Startups and new businesses can greatly benefit from HSBC’s Commercial Card. It is relatively a low-cost credit card that offers good interest-free periods for purchases, additional employee cards, international brand discounts, and relatively lower interest.
It is also easier for new businesses to get qualified for an HSBC Commercial Card. Also, get to use award-winning accounting software like Xero for trial.
| Overview | • Annual Fee: £0 for first year, second year onwards £32/year • Interest-Free Period: 56 days • APR: 22% APR (variable) and 15.9% p.a. purchase rate (variable) • Best For: Small businesses. |
| Features | ✨ Up to 56 days of interest-free period after purchases ✨ Free access to Xero accounting software for three months ✨ Employee cards with custom limits are available ✨ Discounts when shopping at international brands like Dell, Europcar, AA, McAfee, Samsung, and Supportware. |
| Rewards | ✔️ None |
| Eligibility | • Sole traders, partnerships, or limited companies with 3 or fewer directors/partners • Must own an HSBC business current account. |
| Pros | ✅ 56 days interest-free period ✅ Free trial of Xero ✅ Employee cards with custom limits |
| Cons | ❌ No rewards, cashback, or other offers ❌ High FX fees |
9. Lloyds Business Credit Card
Lloyds Bank is a famous financial entity in the UK that offers financial solutions for small and large businesses. The business credit card offered by Lloyds has a higher annual fee.
But for the fee, it offers buyer insurance, travel insurance, a longer interest-free period, a good borrowing limit, and additional credit cards. Sole traders and small businesses can make use of Lloyds business credit cards to gain more credit scores for their businesses.
| Overview | • Annual Fee: £0 for first year, second year onwards £32/year. • Interest-Free Period: 45 days • APR: 22.4% (variable) and 26.3% p.a. purchase rate (variable) • Best For: Small and large businesses. |
| Features | ✨Up to 45 days free of interest on purchases ✨Buyers protection insurance ✨Travel insurance ✨Borrowing limit of up to £10,000 ✨Get up to 20 employee cards with custom limits |
| Rewards | ✔️ None |
| Eligibility | • Sole trader, partner, or director with the authority to borrow • A business current account holder at Lloyds Bank • Potentially a guarantee for Limited Companies |
| Pros | ✅ Easily accessible for new businesses ✅ Offers buyers protection and travel insurance ✅ Up to 20 employee cards with custom limits |
| Cons | ❌ Up to 2.95% FX fee ❌ No rewards or cashback.£5 is charged for transaction receipts |
10. Bank of Scotland Business Credit Card
Bank of Scotland is a subsidiary bank of Lloyds Bank. It offers buyer protection, travel insurance, and merchant benefits which no other credit card in this segment offers.
If you are opting for a business credit card that will fetch you better rewards for your daily spending, the Co-operative Bank business credit card might disappoint you. However, it is a good option for small businesses to build up a good credit score.
| Overview | • Annual Fee: £32 • Interest-Free Period: 45 days • APR: 22.4% APR (variable) and 16.3% p.a. purchase rate (variable) • Best For: New businesses |
| Features | ✨Up to 45 days free of interest on purchases ✨Up to 20 employee cards with custom limits ✨Buyer protection ✨Travel Insurance ✨Borrowing limit of up to £10,000 ✨Merchant rebates with business savings (only for MasterCard). |
| Rewards | ✔️ None |
| Eligibility | • Sole trader, partner, or director with the authority to borrow • Should be a Bank of Scotland business current account holder • Potentially a guarantee for Limited Companies. |
| Pros | ✅ Easier for new businesses to get a credit card ✅ Buyer protection and travel insurance ✅ Get up to 20 employee cards with custom limits. |
| Cons | ❌ £6 is charged for transaction statements ❌ 2.95% fee for foreign transactions ❌ No rewards or cashback ❌ A shorter interest-free period when compared to other cards. |
11. CashPlus Bank Business Credit Card
CashPlus offers a diverse collection of business products for small and large businesses based in the UK.
The most lucrative services are the business credit cards that offer cashback and employee cards with lower APR when compared to competitors. CashPlus supports sustainability and offers physical business credit cards that are made out of recycled plastic.
| Overview | • Annual Fee: None • Interest-Free Period: Up to 56 days • APR: 19.9% p.a. variable on purchases • Best For: Small and large businesses |
| Features | ✨Up to 56 days free of interest on purchases when you pay in full each month ✨24/7 mobile and online banking for generating invoices ✨Get up to 20 employee cards ✨Connect to leading accounting software like Xero, Quickbooks, and Sage ✨Cards are made out of recyclable plastic |
| Rewards | ✔️ 1% cashback on purchases. |
| Eligibility | • You are a sole trader, or the director of a Limited Company registered in the UK • You are a UK resident over the age of 18 • You haven’t had a CCJ, IVA, or CVA recently |
| Pros | ✅ No annual fees ✅ High free-of-interest period ✅ Cashback on all purchases ✅ Employee cards with custom limits |
| Cons | ❌ High FX fee ❌ Only available for UK-based businesses ❌ Onboarding fees for corporate PSCs |
12. The Co-operative Bank Credit Card
The Co-operative Bank is a financial institute with a rich history in the UK. The bank offers only one business credit card option suitable for small and large businesses based in the UK.
While it offers not much in terms of rewards and cashback, the low APR when compared to other credit card options makes it a lucrative financial tool. You can streamline your company’s expenses and get additional cards to simplify the expenditures.
| Overview | • Annual Fee: £24 • Interest-Free Period: Up to 56 days • APR: 21.8% APR (variable) and 15.9% (variable) p.a. purchase rate • Best For: Smalls and large businesses |
| Features | ✨Up to 56 days free of interest after making the purchase ✨Get additional cards with custom limits ✨Integration with Apple Pay, GPay, and Samsung Wallet ✨Get up to £25,000 in credit |
| Rewards | ✔️ None |
| Eligibility | • A UK resident with a business registered in the UK • You are authorized to borrow on behalf of the business or charity • Must hold a Co-operative bank current account |
| Pros | ✅ Low annual fee when compared to competitors. |
| Cons | ❌ High FX fee. £8 is charged for each transaction statement generated ❌ High payment default penalty |
13. NatWest Business Credit Card
NatWest or National Westminster Bank is one of the leading retail commercial banks in the UK. NatWest offers a lucrative business credit card for businesses with an annual turnover of £2 million or more.
There is no annual fee for the first year and if you spend more than £6,000 per year, the annual fee is waived. Get additional cards, an efficient expense management system, and cashback offers with the NatWest business credit card.
| Overview | • Annual Fee: No fee for the first year, second year onwards £30 • Interest-Free Period: 56 days • APR: 24.3% APR (variable) and 16.9% p.a. variable purchase rate • Best For: Large businesses |
| Features | ✨An annual fee of £30 is waived if the spending is more than £6,000 per year ✨Up to 56 days interest-free credit period on purchase ✨Get merchant offers with business savings from MasterCard ✨Get a very high credit limit according to your business ✨Integration with Apple Pay and GPay ✨Get employee cards for £30 per card |
| Rewards | ✔️ 1% cash back at eligible fuel and electric vehicle charging stations |
| Eligibility | • Business must have a £2 million annual turnover • Must have a NatWest business current account. |
| Pros | ✅ Annual card fee waiver ✅ Cashback offers ✅ Higher credit limits. |
| Cons | ❌ High FX fees ❌ The high additional card fee ❌ Limited to NatWest customers |
14. Juni Business Credit Card
Juni is a financial platform made for e-commerce businesses and large businesses. It allows the integration of all business spending under one dashboard.
Apart from business current and savings accounts, Juni also offers business credit card solutions. The financial platform allows real-time tracking and management of business-related expenditures. The credit card has relatively higher fees but offers many rewards for the cash paid.
| Overview | • Annual Fee: €79 per month or Prime (bespoke) • Interest-Free Period: None • APR: Charged monthly • Best For: eCommerce, advertising businesses, and Large businesses. |
| Features | ✨€200k credit limit ✨Credit limit of up to €20 million for Prime ✨38-day interest-free period ✨Integration with all modern accounting software ✨Dedicated account manager for Prime ✨1.5% FX fee for card payments ✨10 free IBAN accounts ✨Get virtual cards in the mobile app |
| Rewards | ✔️ 0.5% uncapped cashback on debit spend ✔️ 1% cashback on all spends in the bespoke plan |
| Eligibility | • Available for Juni business current account holders • Be an eCommerce limited company or partnership registered in the UK • Should have been trading for the past three years |
| Pros | ✅ Very high credit limits ✅ Best for foreign and international transactions ✅ Lucrative cashback rewards |
| Cons | ❌ Not suitable for small or medium enterprises ❌ Highly monthly fee ❌ No physical cards. |
15. Moss Business Credit Card
Moss is one of the latest entrants into the financial world. It has state-of-the-art systems to help you manage your finances efficiently.
It offers no rewards and offers for spending. However, the rate of interest is based on your spending and is a good option for large businesses and corporations. It integrates AI and automation to better manage your business’s expenditure.
| Overview | • Annual Fee: Custom monthly fee • Interest-Free Period: None • APR: Charged monthly • Best For: Large business |
| Features | ✨Advanced finance management solution ✨Integration with modern accounting software ✨2% fee on foreign transactions ✨Uses AI to detect receipts from emails and messages |
| Rewards | ✔️ None |
| Eligibility | • The business should have a total turnover of £2 million • Must have up to 10 employees |
| Pros | ✅ High credit limits ✅ Integrates automation for better account management ✅ Custom monthly fees based on spending ✅ Employee cards with custom limits |
| Cons | ❌ Small businesses are ineligible ❌ No rewards or cashback ❌ Highly monthly fee |
Types Of Business Credit Cards
1️⃣ 0% Interest Credit Card
Credit cards usually levy interest on the money borrowed for making purchases. For business credit cards, these interests are higher than personal credit cards.
However, companies provide a 0% interest credit card for customers with a higher credit score, where you don’t have to pay interest for the money borrowed. You are required only to pay the annual fees for maintaining the card, given that you pay back the money over a specified time. This is the most lucrative credit card, available only to the creme-de-la-creme customers of the bank.
2️⃣Corporate Credit Cards
These credit cards are usually meted out to the employees of a large company or corporation and come with a higher credit limit than the normal credit card. The employees can use this card for their personal use or for making purchases for the company, which will be paid regularly by the company.
This type of credit card usually has the company’s name on the credit card and helps track the expenses, for better financial management. When an employee leaves the company, they will have to return the credit card, therefore, it is issued for a specific time.
3️⃣Small Business Credit Cards
A small business credit card is specifically made for small and medium-sized enterprises (SMEs) and entrepreneurs. These usually have a higher credit limit, and high interest rates, and are issued to cater to the various needs of a small business.
These credit cards also help in building up a good credit limit for the business for availing more loans and other financial offers. Just like a personal credit card, small business credit cards also offer various bonuses and rewards. It helps in managing and tracking the expenditure of the business.
4️⃣ Fuel Credit Cards
Companies and startups that depend heavily on transportation can use fuel credit cards. This type of business credit card helps the company to track and manage the expenditure on fuels.
Companies can then pay back a lump sum amount at the end of the month as opposed to paying the fuel charges every day. Apart from the convenience offered, fuel credit cards also provide various offers, discounts, cashback, and rewards while purchasing fuel.
Some cards also provide roadside assistance and benefits like fuel surcharge waivers. Many banks associate with fuel companies to provide many more additional rewards than the ones mentioned above.
5️⃣ Cashback Rewards Credit Cards
Every credit card offers cashback rewards, but not as lucrative as business credit cards. Business credit cards usually have a huge spending limit which is fully utilized by the businesses. This has prompted banks and financial institutions to provide more offers and rewards for it.
Companies can use this type of credit card to meet daily demands such as buying office supplies, utilities, advertising, and phone bills. Bonuses are doled out to the companies in the form of huge cashback, discounts, and reward points.
This benefits the company and the bank in the long run. Cashback rewards credit cards have higher interest rates when compared to other business credit cards.
6️⃣ Travel Rewards Credit Card
This type of business credit card is ideal for companies that spend a huge amount on travel expenses. Using this credit card to book flights, train tickets, bus tickets, and taxis will fetch huge discounts and help to keep track of the traveling expenses of the company.
In addition to the discounts while booking tickets, these types of credit cards also offer airport lounge access, travel insurance, hotel discounts, and airline miles.
Companies or employees that require frequent traveling are the most benefited from this credit card. The interest rates of travel rewards credit cards are high, but not as high as other business credit cards.
7️⃣Co-Branded Credit Card
Co-branded credit cards are usually issued by a financial institution in partnership with a company or a brand. It offers specific discounts, rewards, and cashback while making purchases in the associated brand.
It is really helpful when a business has not made regular purchases with a specific brand. This credit card will fetch them good offers while making those purchases. Co-branded credit cards are easier to obtain when compared to other business credit cards.
They also have lower credit limits as the spending will be lower and aimed at a specific brand. Getting a co-branded credit card associated with a specific hotel, airline, or streaming service can fetch you better discounts than a normal business credit card.
8️⃣Charge Cards
Unlike other credit cards, charge cards have no pre-set spending limit. While a credit card requires only a minimum payment at the end of each billing cycle, a charge card requires payment in full every month.
Even though it does not specifically have a limit, it doesn’t mean it offers unlimited money. Instead, the purchases made using the card are approved based on your previous spending and payment.
Another important thing to note is that charge cards have no interest and offer reward points for spending from it. Charge banks have huge interest rates and stiffer annual fees. These cards have now become rarer and only a few banks now offer such cards.
Difference Between Business Credit Card And Personal Credit Card
- Higher Credit Limits
Business credit cards tend to have higher credit limits than personal credit cards, giving you more spending power. This is very useful when your company has very high operating costs needed daily.
The business credit cards are issued based on the company’s annual income, which will be higher than any personal income and hence can fetch you a higher credit limit. If your company expenses fluctuate monthly and cannot be calculated upfront, a business credit card will help you to meet the additional expenses.
However, with a higher credit limit, you will have to sacrifice lower interest rates. Every business credit card has a higher credit limit.
- More Targeted Rewards
Business credit cards are more lucrative than normal credit cards as they offer a wide array of rewards, bonuses, cashback, and other offers. If your business spends a lot on office supplies and utilities, a business credit card can help you earn more offers on each payment.
A flat-rate credit card will provide cashback on all purchases made using the credit card, helping you save more on expenditures. If your company heavily relies on transportation, get a travel rewards card that will save you a dime on every flight, bus, or hotel ticket booked.
Apart from tracking the expenditures, this will help you save more on the most necessary expenses of your company.
- Build a Good Credit Score
All businesses need to rely on financial institutions for their growth. Small, medium, and large businesses, enterprises, and corporations will require hefty loans for future expansions.
The loans are processed according to a business’s credit score. Credit cards are the perfect financial tool that helps in shaping a good credit score to avail of loans. Manage the expenses of a company using a business credit card and make regular payments without fail to get a higher credit score and avail good loans.
The payment history determines a company’s eligibility for loans. Late payments and delinquencies can adversely affect a company’s credit score.
- Tax Deductible Fees
Credit card expenses are not tax deductible for individuals but are deductible for businesses. This makes business credit cards a lucrative financial tool to behold.
Businesses can deduct credit card annual fees, monthly fees, annual fees, late fees, interest costs, and other finance charges. Owning a business credit card can help you lower tax payments, which can ultimately benefit your business.
Corporations, partnerships, and other businesses can use business credit cards to cut down on their tax payments.
- 0% APR Period
A 0% APR on a credit card means that you don’t have to pay interest on the cash borrowed for making purchases or balance transfers for a specific period. Once the period is over, you will have to pay interest on the outstanding amount.
Most of the credit cards used to give a 0% APR period for its beholders. the 0% APR period has been 15 months or less, nowadays, no personal credit cards offer such an offer.
However, for small business credit cards, there are still introductory 0% APR periods on offer. While they do not offer long periods for the offer, it is still a unique feature to own that can heavily benefit your business during its inception.
- Employee Cards
Businesses can jointly work with financial institutions to provide their employees with business credit cards with individual spending limits and interest rates.
Apart from being used for business expenditures, these cards can also be used for personal purposes. These cards offer a higher credit limit than personal credit cards, but they have higher interest rates.
This takes away the expenses of reimbursement and helps the businesses to better track the expenses made by the employees. Employee credit cards have the same terms as a business credit card. They usually have an interest-free period which can range from a month to over a year.
- Easier Expense Tracking
If your business spending is all over the place, getting a business credit card will help you to organize and better bookkeep the expenditures of your business. Monthly business expenditures like utilities, office supplies, fuel charges, etc can be easily managed using a business credit card.
Companies can also issue employee cards with custom spending limits for each card which eliminates the expenditure for reimbursement processing. Using a personal credit card for business expenditures adds extra burden to compile the expenditures and to calculate overall expenses.
The business credit card portal can calculate the expenses, taxes, and offers and helps you to track and maintain a good credit score for your business.
- Consumer Protection
Personal credit cards have better consumer protection when compared to business credit cards. While business credit cards offer a 0% APR period, the bank has the sole authority to change the APR period without any notice.
Businesses who made purchases hoping they don’t have to pay interest will be affected by it. Similarly, suppose you miss a payment for a business credit card. In that case, the penalty will be much higher than a personal credit card and is at the full discretion of the financial institution.
In most of the countries, the consumer protection laws are much stronger for personal credit cards than business credit cards. It is also quite difficult to get qualified to get a business credit card when compared to a personal one.
How To Choose The Best Business Credit Cards?
There is a sea of various business card options available. Selecting the best card out of it, which suits your business lifestyle is a strenuous task. Follow these simple steps to choose the best business credit card that fits your needs.
- Check if you are eligible to get a business card.
- Analyze the expenditure of your business.
- Examine the features offered by the business credit card.
- Plot out the pros and cons of each card.
- Compare the APR and annual fee.
1️⃣Check if You are Eligible to Get a Business Card
Just like the eligibility criteria for a personal credit card, a business credit card also has certain eligibility criteria that your business needs to fulfill to get it.
First of all, you need a business to get a business credit card. The business need not be a ginormous corporate firm, even gig workers and freelancers can qualify for a business card.
Just like a personal credit card, your credit determines your eligibility for a business card. Your business’s annual revenue and credit score play a huge role in determining your credit limit. If you have a good credit score, the business credit card will have a higher spending limit.
2️⃣Analyze the Expenditure of Your Business
Before having a business credit card, your business expenditure might be all over the place. Make a list of the operating costs of your business.
Compile the expenses over a selected period of 3 months, 6 months, or over a year. This will help you decide on what type of business credit card suits your needs.
If you are an entrepreneur and are starting a business, it is better to go with the best cashback credit card available in your credit score.
Later, when you have established your business, look for credit cards with specific features that can help in managing your business expenditure.
3️⃣Examine the Features Offered by the Credit Card
Different business credit cards offer different perks. Cashback, bonuses, rewards, travel rewards, fuel offers, etc are offered by many business credit cards. Make a list of the credit cards in your credit limit and look for the features offered.
Apart from managing your business expenditure, purchasing using a credit card must fetch you discounts and cashback.
These bonuses should outweigh the annual fees and the interest you pay for the credit card. Also, read the terms of each credit card before applying for it.
Some credit cards might have higher penalty fees for late payments, while some don’t. If you have a rainy day and cannot pay your bills, it might become a problem in the future.
4️⃣Plot Out the Pros and Cons of Each Card
After selecting a few credit cards that you are eligible for, compare them. Plot out the advantages and disadvantages of each business credit card.
This will help you to narrow down and select the best credit card for your business needs. The disadvantages of each card may include the annual fees, rate of interest, payment penalty, etc.
The advantages are sign-up bonuses, cashback, reward points, payment schedules, tax dedication, etc. Eliminate the cards that do not reduce your business expenditure and you will be left with one or two cards to choose from.
5️⃣Compare the APR and annual fee
APR or Annual Percentage Rate is the most important aspect one should look for while selecting a credit card. It shows the actual yearly cost of funds that are borrowed using a credit card.
It is also commonly called a yearly interest rate and decides how much you should give back to the bank. So, by selecting cards with lower APR, you can make lower payments in the form of interest.
Every credit card has a different annual fee. Some cards even waive any annual fee, making it zero. It is better to select cards with lower annual fees that will be better for the business.
Benefits Of Business Credit Cards
- Higher Credit Limits
Business credit cards will have higher credit limits when compared to personal credit cards.
While the limit of a personal credit card depends on your income and credit score, a business credit card’s limit depends on your company’s annual turnover and credit score. The higher credit limits, however, come with a sacrifice of lower interest rates.
- Build Better Company Credit
Having a business credit card will fetch your company a better credit score. Every company will have to avail loans to expand their business. A credit card is the easiest method to build a better credit score.
This will help your business get higher loans with lower interest. Paying the credit card bills on time and not exceeding a fixed limit on spending will help your company earn better credit.
- Keeps Your Business and Personal Expenses Separate
No law prevents you from using a personal credit card to manage your business expenses. But it would complicate things and prevent you from monitoring the company’s expenses.
However, a business credit card will help you to effectively manage your business expenses. Having employee cards will prevent you from the hassle of reimbursing the funds.
A business credit card will streamline all the expenses and costs and keep personal spending separate from your business expenditures.
- Keep a Tab on the Spends
A business credit card will help you to keep a tab on business expenditures. All the costs of running the business can be easily accessed from the card’s online portal.
You can analyze where the business has overspend and adjust it to reduce unwanted expenses.
Every business credit card will have an online portal or a dedicated mobile app for you to monitor the cost of running a business. It also helps you to get notified of utility costs that are paid monthly.
- Better Offers and Rewards
Business credit cards offer lucrative bonuses and rewards when compared to personal credit cards. Businesses that spend enormous amounts on utility, supplies, travel, and other hospitality services can make use of the specific rewards offered by credit cards.
Cashback is another lucrative method to lower the expenses of running a business. You can also accrue loyal points when making purchases and redeem them in the form of cashback or real money.
Pros And Cons Of Business Credit Cards
Pros:
- Business credit cards help to keep business and personal expenses separate. This also helps you to have a healthy personal finance and a business with better finance management.
- Your business could benefit from the higher credit score earned through timely payment of the business credit card. This will help you fetch higher loans with lower interest rates for your business.
- If your company relies heavily on transportation, the travel rewards meted out by the credit card can help you manage the travel expenses efficiently. Lounge access, fuel surcharge waiver, flight ticket offers, etc will reduce your cost of running the business.
- You can manage the business expenditure through your business credit card portal if all the expenses are paid out using the credit card. This will help you keep a tab on spending and better manage the expenses.
- Business credit cards also offer flexible payment options, zero or minimum annual fees, and adjustable amortization periods. These benefits are only available on business credit cards and not on personal credit cards.
Cons:
- Business credit cards offer lower consumer protection when compared to personal credit cards.
- They have higher APR than personal credit cards. This means you have to pay more interest for the money borrowed.
- Your credit history, score, and limit have to be checked for issuing a business credit card. You will need a very good credit score to obtain a business card.
- Default on credit card payments may lead to steep interest rates on the outstanding amount.
- It is very difficult for entrepreneurs and new business owners to get qualified for a business credit card.
Eligibility For A Business Credit Card
Different banks have different eligibility criteria to get to own a business credit card. But, here are some of the widely mentioned eligibility criteria:
- You have to be over the legal age of 18.
- You should operate as a sole trader, small or medium business owner, limited company, or partnership in the UK.
- You need to have a permanent UK citizenship with a permanent UK address.
- Your business should have a current business account under a UK-based bank or building society.
- You and your business should have no history of payment defaulting or any criminal charges.
- You should have a high credit score.
- The business revenue will also be taken into consideration. The minimum annual income for being eligible varies with banks.
Downsides And Risks Of Using Business Credit Cards
If you have reached this far, you might know about the advantages and disadvantages of business credit cards. While it is a great financial tool that helps you manage your expenses, it is also capable of bankrupting you and your businesses.
A credit card gives you more funds than you have at your disposal. If you don’t manage the funds effectively, you can go into an enormous debt. The golden rule for using a credit card is to make purchases that you can afford without having a card.
Another thing to look out for is the higher rate of interest. While a credit card gives you financial help, it comes with a cost. If you default on a payment, the penalty fee is very high for a business credit card.
Not only that, it can also significantly lower your credit score and your business’s credit score. There is a cost for owning a credit card which comes in the form of the annual fee. Various banks have a different annual fee, which eats into the interest paid each month.
If you own a business, a business credit card is the best way to streamline all your expense data. It is a financial tool and nothing more.
If you need the support of your business credit card to meet the expenses, it means that you are overspending on your business or it is not profitable.
You should never depend on a credit card to meet the expenses. As mentioned earlier, only use credit cards to get offers and rewards on your daily expenditures. Borrowing money from a credit card to run a business and its accruing interest rates will eventually bankrupt you.
Always select a credit card that meets your needs. Many banks and financial institutions lure you in by giving lucrative welcome offers, but eventually, it will have a very high APR. Another thing to note is that business credit cards are issued for business-related expenses.
If you start using it for personal needs, the high interest rates would probably disrupt your personal finances. It is quite difficult to obtain a business credit card. If you are ever offered one very easily, be aware of the pitfalls of the credit card industry.
Best Business Credit Cards: Bottom-line
You can equate a business credit card to the likes of a personal credit card. Instead of increasing your credit score, a business credit card would increase your company’s credit score.
It is also a financial tool to effectively manage your company’s expenses and keep a tab on it. It also offers a wide array of offers and rewards on your daily expenses. Apart from all the features it offers, a business credit card can help you to keep your personal and business finances separate.
A business credit card is a double-edged sword. It has its advantages and disadvantages. You should use it wisely to keep it from disrupting your business’s finances.
A business credit card is different from a normal credit card as it has a high APR. If you make purchases with it that you cannot afford, it might end up as a burden in the long run. So, select and use a business credit card with utmost care and use its offers to benefit you and your business.
