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There are a number of reasons why startups are different from established businesses. Their credit needs are no exception.
If you own a startup and are looking for a new business credit card, you’ll want one that can help you manage your cash flow, while offering a low rate if you need to sometimes carry a balance. You might even want a card that lets you earn rewards on your spending.
Most importantly, you want to spend as little time as possible managing your credit card – you’re busy enough running your business. Although we can’t guarantee you’ll get all that, we do have a few suggestions on how to find a suitable credit card.
How to choose the best business credit card for startups
This will depend on the type of business you run and what you want to use your card for. If you think you might carry a balance on the card from time to time, you’ll want to look for a card that offers a competitive interest rate.
Alternatively, if you know you can clear your balance in full each month, but you’re likely to use the card often, you may want to seek out a business credit card that offers great rewards.
Overall, you’ll need to work out which features are the most important to you and look for the most suitable card. Here’s a list of features you may want to consider while comparing products:
Annual fee. This is the annual cost of your credit card, no matter how much you use it. You’ll have to include it in your budget, so it’s a core factor to look at. For example, British Airways Accelerating Business Card charges a £250 annual fee.
Interest rate on purchases. If you’re positive you’ll pay your credit card bill in full every month, this is a secondary concern. But if you can’t, the interest rate is important because it tells you how much borrowing money with the card will cost your startup. Typically the interest rate will be above 20% annually
Facilities. Can the card be managed online or from your smartphone? Is the app good? Can you connect it to your accounting software? This is of utmost importance if you own a startup because it can save you a considerable amount of time.
Rewards. These are for startups that plan to spend quite a lot on the credit card.
Additional cards. If you’re planning to give a card to other people in your team, don’t forget to check how much it’s going to cost you.
Foreign transaction fees. If you travel often for business purposes, you want a credit card with no foreign transaction fees. Most business cards charge 3% of every transaction, which can easily amount to a small fortune in fees if you’re not careful. The Capital on Tap Credit Card is a popular choice for startups that frequently spend in other currencies.
Capital on Tap Business Credit Card
Get up to £250,000 to grow your business.
Earn 1% cashback for every £1 spent.
Enjoy up to 56 days interest-free on purchases.
No application fees or non-sterling transaction fees.
Representative example: When you spend £1,200 at a purchase rate of 35.15% (variable) p.a., your representative rate is 35.2% APR (variable).
This depends on a number of factors. It’s a good idea to check the eligibility criteria first, then use an eligibility checker to determine your chances of being accepted for the card you’re considering. Eligibility checkers only run a “soft” search on your credit report that won’t impact your credit score. However, bear in mind they are harder to come by compared to eligibility checkers for personal credit cards.
Getting a business credit card with a low credit score can be harder, and you may be offered a higher interest rate and a lower credit limit. You still have some options, though. Read more about applying for a business credit card with bad credit.
You are if you signed a personal guarantee. They’re fairly common, but there are also some business cards that don’t require one.
Yes, a limited company or sole trader can apply for a business credit card but it depends on how long you’ve been trading for. Forming a limited company legally separates your personal finances from your business finances. This can help you to build up a business credit rating which lenders will use to assess whether they are happy to let you borrow.
If you just started a company, your credit history will be pretty limited, which means your credit rating will likely be poor. This can make it difficult for lenders to assess your creditworthiness. As a result, you may find it harder to get accepted for a business credit card. Or if you are accepted, the interest rate offered could be higher than advertised and/or your starting credit limit is lower.
If your business is new, some lenders may also choose to look at your personal credit score to help them establish whether they are happy to let you borrow. If your credit score is good, they may be more willing to offer you a business credit card.
You may also be required to sign a personal guarantee before you can qualify for the card. This means you will be personally responsible for any debt you accumulate on your business credit card.
As your business credit score builds over time, you may be able to apply for a more competitive card that offers better rates and a higher credit limit.
We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you. Most of the data in Finder's comparison tables has the source: Moneyfacts Group PLC. In other cases, Finder has sourced data directly from providers.
Emily Herring is a Publisher at Finder specialising in credit-based products including credit cards and business and personal loans. Emily has a Masters in Creative Writing & Publishing and a Bachelor of Arts in Communication & Media.
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We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
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