Business credit cards are designed to suit the financial needs of different types of companies, ranging from small startups to major corporations. These cards allow you to keep your business and personal expenses separate, assign cards to employees, manage your cash flow, track your finances and earn rewards. Just as with personal credit cards, there is a range of factors to consider before deciding if a business credit card is right for you.
A business credit card frees up cash flow by having a line of credit to pay for business expenses. Cards offer features such as rewards programs, additional cardholders and expense reporting systems. Rather than an individual, the company may be liable for the debt on a business credit card.
You can apply for a business credit card if you are:
The owner of a company, SME or are in a partnership
A sole trader
Responsible for making purchases for your business
How are business credit cards different to personal credit cards?
Business credit cards allow you to keep your personal and business expenses separate. Using a card can boost your business credit profile and give you a better overview of your cash flow. Depending on the card, you’ll often find features such as:
Additional cards for employees or partners
Customisable spending limits for different users
Analytics tools designed to help with business reporting and budgeting
In most other ways, business credit cards are similar to personal credit cards:
With either option, you’ll get access to funds up to a certain limit and be able to pay off what you spend over time (with interest charges).
You may also have features such as travel insurance, the ability to earn rewards and travel perks.
You will be assigned a credit limit, which is the maximum amount of available funds.
Interest is charged on purchases and cash advances.
Most cards have an annual fee. The more features and perks the card has, the higher the fee.
You will need to make repayments every month. Credit card issuers have a minimum payment amount given as a percentage (usually between 2-5%) or a dollar amount, whichever is higher.
If you pay your balance off in full each month, you can enjoy 44 or 55 interest-free days on purchases.
Types of business credit cards
Whether you’re looking to keep your business’ credit card costs low, want to earn rewards points as you spend or want to take advantage of interest-free days, there are business credit cards on the market to suit many different types of cardholders:
Rewards business credit cards
These cards reward you for paying with a credit card, usually offering a reward or frequent flyer points for spending on eligible purchases. It’s important to remember that these cards may come with higher annual fees and interest rates, so you’ll need to make sure that the value of the rewards will outweigh any costs.
Airpoints business credit cards
This type of rewards business credit card is linked to Air New Zealand’s frequent flyer programme. You can earn Airpoints Dollars while you spend and take advantage of benefits like free travel insurance, lounge access and 24/7 concierge service depending on your card’s features.
Low rate business credit cards
These business credit cards have low standard interest rates for purchases and can give companies a more affordable option if they need to pay off spending over a longer period of time. Low rate business credit cards also have a low annual fee, which makes them popular for small businesses that need a cost-effective way to finance major expenses as they arise. They can also suit businesses that want a credit card on hand for any unexpected costs, or have seasonal and variable amounts of revenue.
Low fee business credit cards
Similar to low rate options, low fee business credit cards are designed for companies and sole traders that want affordable access to a line of credit. These cards generally have lower annual fees than others, and might even waive fees entirely if certain conditions are met. This type of feature can make having a business credit card more affordable.
Corporate business credit cards
These credit cards are designed for larger businesses that want one account for business expenses. Corporate business credit cards can offer dozens of supplementary cards and can let businesses set individual spending limits for each of them, and track spending on a per card basis.
How to compare business credit cards
Comparing business credit cards side-by-side allows you to find an option that is suited to your business’s specific needs. Some of the core factors to compare when weighing up business credit cards include:
Business spending habits
It’s important to choose a business credit card that matches your existing business spending. Business cards that offer a lot of “bells and whistles” may seem like an attractive offer, but not all offers will help maximize value while operating your business.
Choosing a card should depend on the types of transactions your business undertakes. In credit card terms, this would include eligible purchases, capital expenses, additional cardholder spending, and business travel needs. You can then match the types of transactions with the card features. For example, if your business uses a credit card for flights and regularly pays it off, a frequent flyer card might offer competitive value.
On the other hand, if your business relies on the card for credit, a low rate, low fee or interest-free days business credit card might be the most affordable option.
A range of business credit cards offers an interest-free period (for example, “up to 55 days interest-free”) if you pay your balance in full by the statement due date. In New Zealand it’s common to see either 44 or 55 days interest free, which is suited to businesses looking for a short-term cash flow solution.
Fees and charges
Business credit cards feature a range of fees and charges. Some of the most common include:
Annual fees. Business credit card annual fees can vary widely and might range from $0 to $700 (or more).
Additional cardholder annual fees. While some business credit cards offer additional cardholders at no extra cost, others may charge fees, such as another $50 per cardholder per annum.
Standard interest rates. Business credit card interest rates will vary between card and transaction type, with some cards charging the same rate for all transactions and others applying different rates depending on whether it is a purchase, cash advance or balance transfer.
Currency conversion fees. This charge is applied for transactions made overseas or in a foreign currency and is typically around 3% to 3.5% of the transaction value.
International transaction fees. When you use your card at an overseas ATM, you may be charged an international transaction fee. If you have a Westpac Airpoints Business Mastercard, this fee is waived when you use a Global Alliance Group ATM.
Overlimit fees. If you or an employee goes over the credit limit on the account, a fee may be applied.
Late payment fees. If you don’t make a payment on your business credit card, you could be charged a fee may be applied. This cost is usually around $10 to $30 but could be higher for some options, particularly charge cards.
Exclusive business rewards. Business credit cards can provide access to exclusive rewards benefits that are outside the scope of personal credit card users. Other rewards perks can include free delivery and express shipment.
Online business banking. Business credit cards usually give you all the access you would expect from banking online, such as 24/7 access to your account plus business security options such as encryption technology for peace of mind. Business applications may also allow mobile management so you can bank on-the-go with your business.
Complimentary insurance. Many business credit cards include complimentary travel insurance and liability insurance for the account.
Expense management systems. Keeping on top of business expenses and consolidating your credit card transactions can be difficult amongst the other million tasks involved in running a business. Expense management systems give you control and simplicity, providing an all-in-one solution for:
24/7 monitoring, budget tracking by creating standard or custom reports, clear visibility of company spending and recognizing patterns to better manage cycles in spending.
Multiple reporting formats including MYOB, Microsoft Excel, Word, PDF, HTML, XML, CSV and Tab-delimited.
Finder’s top picks
As already mentioned, the best business card for your business will depend on how you use your card and the features you need. Check out our top picks for important features and benefits that you may be looking for.
Earn additional Airpoints Dollars when you join the Airpoints for Business programme
For small businesses: BNZ Business First Lite Visa
This BNZ card has a low interest rate of 14.95% p.a. for purchases. It’s a no-frills card suitable for small businesses that don’t need rewards or travel perks.
Get up to 55-days interest free
Unlimited number of cards
Emergency travel assistance
Card limit of up to $50,000
For the lowest interest rate: Kiwibank Business Mastercard
The Kiwibank Business Mastercard has the lowest interest rate that we can find at the moment – just 12.50% p.a. for purchases. It also has a low account fee of $6.25 every 3 months.
Contactless payments up to $200
Mastercard Zero Liability
Set different limits for different cardholders
Integrate with Xero or MYOB
How to apply for a business credit card
With expense tracking features, additional cards, interest-free periods and reward options, credit cards can be a convenient option for both big and small businesses.
If you’re interested in getting a business credit card, the first step is to compare options to find one that is convenient and affordable for your business. Once you have found the right card to suit your needs, you can usually apply online. Before you apply for a credit card, you’ll need to make sure that you meet the following eligibility requirements and have organised the necessary documents to complete the application.
Age. You must be at least 18 years of age to apply for a business credit card in New Zealand.
Residential status. You may need to confirm your residency status to apply. Your options may vary depending on residency status.
NZBN. You may need to provide your New Zealand Business Number (NZBN) to apply.
Credit report. An issuer may check your business’ or your personal financial history.
Necessary documents and information
The other details you will be asked to provide vary depending on the card and whether you choose a business liability or personal liability option. But generally, you will need to provide:
Contact details. Contact details for you and/or your business.
Proof of identification. A valid form of identification, such as your driver’s licence or passport.
Financial information. You’ll need to provide information about your income and/or revenue as well as any assets and liabilities, including investments, debts and regular expenses.
Additional cardholders. If you wish to manage your employee’s spending under the one account, you’ll also need to provide the details of any supplementary cardholders.
Once you have submitted your application, you could get a response within a few hours or a few days depending on the card issuer. If you’re approved, you could have your card in as few as 5-10 business days. You can then activate the card, and start using it for your business.
You may find that the bank you already have a relationship with offers a business credit card. In this case, your application process will usually be slightly easier since the bank already has information about you and your business.
What to consider before applying
You can apply for an American Express, Visa or Mastercard. Visa and Mastercard are accepted at more physical and online businesses in New Zealand, but you may find that American Express is more appropriate for your business if you travel to the US or you only use your card where AMEX is accepted.
If you are applying for a business credit card for the first time or your business is just starting out, you may only be given a low limit. Once you build a history of successfully making repayments, you will be able to apply for a higher limit.
It’s important to weigh up both annual fees and interest rates when comparing cards. Even though a card has a low interest rate, the annual fee could be high and vice versa.
A card with a low interest rate may prove to be cheaper in the long run than applying for a line of credit, overdraft or business loan if you need to make some large purchases.
Frequently asked questions
In order to choose a business credit card that suits your company’s needs, you’ll need to consider a range of different factors to help you narrow down your options. These will vary depending on your business and individual needs but could include:
How much you plan to spend on the card
If you’ll be the only one using it, or if you want to get additional cards for employees
If you want to earn rewards for your business spending
If you want complimentary insurance or other perks
The banking services and features you want access to
You may also want to look for specific features, such as business credit cards that are compatible with your accounting software. But weighing up these factors – and any others that are specific to your business goals – will help you compare credit cards based on the features that offer the most value to your business.
Some business credit cards come with complimentary travel insurance, but you will need to check this information for specific cards you’re considering. Depending on the bank and the insurance company they are partnered with, the requirements to qualify for cover and the inclusions will differ. It is important to check the terms and conditions around the travel insurance policy to ensure they match your travelling needs before applying for the credit card.
As the name suggests, the features of a business credit card are much better suited to that of an organisation than a personal credit card. Business credit cards are available as Visas, Mastercards, or American Express cards, but the credit limit, purchase restrictions and features are designed to complement the financial needs of a business. You may find that the features of a personal credit card are insufficient for your business.
Credit card companies generally allow between 80-95% of the approved credit limit for balance transfers. The specific amount will depend on your application, credit history and the bank’s lending criteria.
Different banks and cards may set different limits. 99 might be a common limit.
Most business credit cards will not be eligible for instant approval as there are underwriting requirements.
The rewards available for redemption can vary between business credit card and personal credit card accounts, but will often be similar. The number of points earned per dollar and the purchases that are eligible for points can also vary depending on the type of business credit card and personal credit card you are comparing.
Andrew Munro is the cryptocurrency editor at Finder. He was initially writing about insurance, when he accidentally fell in love with digital currency and distributed ledger technology (aka “the blockchain”). Andrew has a Bachelor of Arts from the University of New South Wales, and has written guides about everything from industrial pigments to cosmetic surgery.
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