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 card is right for you. You can use this guide to learn more about business credit cards and how to compare them so that you can find an option that suits the needs and objectives of your business.
Earn uncapped Avios or cashback on business spending
Up to 1% cashback or 1 Avios per pound spent.
Up to 20,000 bonus points when you spend £5,000 in 3 months.
Up to 20 free supplementary cards.
Up to 56 interest-free days on purchases each billing cycle.
Representative APR on purchases: 39.9%.
Representative example: When you spend £1,200 at a purchase rate of 39.941% (variable) p.a., your representative rate is 39.9% APR (variable).
Comparison ordered by representative APR with affiliated products shown first.
Updated July 15th, 2019
Business credit cards vs personal credit cards
Unlike personal credit cards, business credit cards are designed specifically for work spending and often include features such as additional cards for employees, customisable spending limits for different users and expense tracking. Some business credit cards may even have analytics tools designed to help with business reporting and budgeting.
But 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 specified limit and be able to pay off what you spend over time (with interest charges). Both personal and business credit cards also include costs in the form of annual fees and interest rates, as well as perks such as rewards programmes or complimentary insurance.
Who is responsible for the credit card?
With business credit cards, it is the business entity that is responsible for managing the account. If there is an issue with the account, the entire business will be held responsible, rather than one individual person that’s linked to the account. Likewise, rates and credit limits can be based on the turnover and credit background of the company, rather than the individual.
What are business charge cards?
A charge card acts as a short-term (usually monthly) loan to a business for any purchases charged on the card. These cards defer payment until the end of the statement period, when you’re required to pay off the account in full. Interest rates do not apply to charge cards as there is no revolving line of credit, but they often apply hefty late fees if you don’t pay the balance in full by the due date.
Business charge cards are designed for organisations that have the financial stability to clear their balance each billing cycle, which will typically be between 25 and 51 days. If you are looking to borrow funds over a longer period of time, business credit cards may offer more flexibility.
Despite these different account structures, charge cards do have many similar features to conventional credit cards, including expense tracking tools, supplementary cards, rewards programmes and complimentary extras. As a result, they are often put in the same category as business credit cards.
Types of business credit cards
Whether you’re looking to keep 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 purposes:
These cards reward you for paying with a credit card, usually offering reward or frequent flyer points for every £1 spent on eligible purchases. Unlike personal credit cards, a business credit card with rewards will let you earn points on your work spending. It’s important to remember that these cards usually 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.
Frequent flyer business credit cards
This type of rewards business credit card is linked to an existing frequent flyer programme, such as Virgin’s Flying Club. Some business frequent flyer credit cards are tied to a specific airline, while others allow you to get points that can be redeemed at a number of airlines. This kind of business credit card can be particularly lucrative for companies that do a lot of travelling.
Low rate business credit cards
These business credit cards have low standard variable 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. Some options even offer the same standard interest rate for purchases, cash advances and balance transfers. Many 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 annual fees around £30, or may even offer no annual fee if certain requirements are met. Frequently, banks will waive the fee for the first year and only apply it on the first anniversary of the account’s opening.
Business credit cards with interest-free days
These credit cards offer businesses a competitive interest-free period for making purchases. A range of business credit cards offer an interest-free period (usually around 55 days) if you pay your balance in full by the statement due date. Depending on the card, they may include other features such as rewards, low fees or complimentary insurance. Other business cards with interest-free days may actually be classified as charge cards, with no interest rate or pre-set spending limit, but a requirement to pay off the entire balance by the statement due date. Both of these types of interest-free options are suited to businesses looking for a short-term cash flow solution.
Corporate business credit cards
These credit cards are designed for larger businesses that want one account for business expenses. Corporate business credit cards may provide up to 99 supplementary cards (or more in some cases) and offer pre-set spending limits for each additional cardholder.
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
Choosing a card should depend, to a significant extent, on the spending habits of your business. You should aim match these spending habits to card features. For example, if your business uses a credit card to purchase flights, and regularly pays it off, then a frequent flyer card might offer competitive value. On the other hand, if your business plans to rely on the card primarily to borrow money, a card with a low interest rate, low fee or interest-free days is likely to be the most affordable option. Business cards that offer a lot of “bells and whistles” may seem appealing, but always ask yourself if they will have a positive impact on your bottom line.
Interest rates can vary hugely from card to card. Some cards charge the same rate for all transactions and others apply different rates depending on whether the transaction is a purchase, cash advance or balance transfer.
Fees and charges
Business credit cards feature a range of fees and charges. Some of the most common include:
Annual or monthly fees. Business credit card annual fees are usually around £30 a year but can be more.
Supplementary cardholder fees. While some business credit cards offer additional cardholders at no extra cost, others may charge up to £75 for extra cards. Check whether fees are “one-offs” or regular charges.
Currency conversion fees. This charge is applied for transactions made overseas or in a foreign currency and is typically 3% to 3.5% of the transaction value.
Over-limit fees. If you or an employee goes over the credit limit on the account, a fee of around £12 may be applied. Additionally this may be visible in your business’s credit history.
Late payment fees. If you don’t make the minimum payment on your business credit card by its due date, a fee is likely to be applied. Additionally this may be visible in your business’s credit history.
Minimum required monthly payments.
Business credit cards generally have minimum payments of 2% to 4% of the outstanding balance, unless they are charge cards, in which case they need to be paid in full each statement cycle.
These may include, but are not limited to:
Reward points. Collect reward points per pound spent, and redeem these with anything from equipment to days out.
Air miles. Collect air miles for popular programmes such as Avios.
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.
Airport lounge access. Travel like a VIP with free access for cardholders and, potentially, their guests too.
Expense management systems. Keeping on top of business expenses and consolidating your credit card transactions can be difficult among all the other tasks involved in running a business. Expense management systems give you 24/7 control and visibility with standard or custom reports.
Pros and cons of business credit cards
Potential tax deductions for claiming a business credit card or charge card annual fee
Simplified book-keeping/accounting process
Expense and cashflow management
Customisable credit limits
Builds business credit
Complimentary extras specifically designed for businesses
Available and issued as either Visa, Mastercard or American Express card
Require a good credit record and business turnover
Potentially expensive fees
Interest charges if you carry a balance
Can be hard to keep track of employee spending if you’re a small business
Limits spending to business expenses only
Purchases are not protected by Section 75 of the Consumer Credit Act, in contrast to purchases mad on a personal credit card
How to apply for a business credit card
If you’re interested in getting a business credit card, the first step is to compare a range of options to find one that is convenient and affordable for your business. Once you have found one, 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:
Much like personal credit cards, cardholders will need to be over 18 and residents of the UK. Some lenders will also stipulate a minimum annual turnover. While cards are available for pretty much any size and kind of company, lenders may have specific products for specific categories of businesses (for example sole traders).
Necessary documents and information
The other details you will be asked to provide vary depending on the card, 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 may need to provide information about your business income and/or revenue as well as any assets and liabilities, including investments, debts and regular expenses.
Additional cardholders. If you wish to manage employee spending under the one account, you’ll also need to provide details of all cardholders.
Accountant’s information. Information on the person or organisation that manages your company books and financial records.
Other documents. Supporting documentation such as tax statements and investor reports may also be required.
If you’re approved, you could have your card in as few as 5-10 business days (depending on the account and issuer). You can then activate the card, and start using it for your business. 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. Now that you know more about them, you can compare your options and find a product that suits your business’ needs.
Frequently asked questions
Some business credit cards come with complimentary travel insurance, but you will need to check this information for the 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 on Visa, Mastercard or American Express, but the credit limit, purchase restrictions and features are designed to complement the financial needs of a business. As a result, 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.
Business credit cards can support up to 99 additional cardholders. To find out how many cardholders you are allowed, refer to the terms of the card(s) you are considering.
Most business credit cards will not be eligible for instant approval as there is typically increased risk for business lending. However, depending on your application criteria you could have a response in just a few minutes.
The rewards available for redemption can vary between business and personal credit cards and the number of points earned per pound can also vary depending on the type of business credit card and personal credit card you are comparing.
Fees and charges paid as a result of using a credit card for business purposes are tax deductible. But there are exceptions and complications when the transaction could be deemed to be for personal benefit, either to you or an employee who uses the card. Check with your bank, accountant, or HMRC about what you can and can’t deduct.
Chris Lilly is a publisher at finder.com. He's a specialist in credit-based products including business and personal loans, mortgages and credit cards, and is passionate about helping UK consumers make informed decisions about their borrowing. In his spare time Chris likes forcing his kids to exercise more.
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