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5 min read

Choosing a business credit card

Using a business credit card is a good way of keeping your personal and business finances separate or managing the expenses of your employees. You can also get extra benefits from using them like cashback when you spend, discounts and air miles.

The benefits of using business credit cards

Business credit cards are very similar to consumer credit cards and can be used for most purchases. 

The benefits of using a business credit card: 

  • They can help manage cash-flow
  • They can help manage expenses and eliminate employee expense claim forms.
  • They offer low-cost borrowing if you pay back quickly. 
  • They may offer an interest-free period on purchases. 
  • You may get added extras like deals on insurance, air miles, discounts, and cash back offers. 
  • They are widely accepted as a form of payment. 
  • They may offer protection on purchases or misuse.

How business credit cards work

Once you have applied and been accepted for a card you will be given a credit limit which is the amount you are allowed to spend up to. The business credit card will be in the name of the business but will also have the name of somebody from the business printed on it. 

Every month you will be sent a bill (or you will need to log in online or on your app) and make a minimum monthly payment. If you pay off your full monthly balance at this point then it’s likely that you will avoid paying any interest on what you’ve borrowed that month. 

If you don’t pay off your balance in full you will incur interest (rates vary from card to card). Business credit cards often also carry annual fees and you can have multiple card holders but you may be charged an annual fee per card.

What to be aware of when getting a business credit card

Business credit cards offer you flexible borrowing but you need to be careful that you are not drawn into debt by the temptation to spend your credit without having the means to pay it off. They can be useful to manage occasional cash-flow issues but if you overspend you’ll get charged interest which will, in turn, make the balance harder to pay off. 

Over 50% of credit cards are gaining interest on their debt. 

MoneySuperMarket, July 2018 

Be aware that as well as interest on your outstanding balance credit cards also normally come with charges for the following:

  • An annual card fee
  • Missed or late payments
  • Going over your credit limit 
  • Cash withdrawals 
  • Use abroad 

Also, because it is a business credit card and not a consumer one, they aren’t covered by the Consumer Credit Act. Section 75 of the Act states that…  

“if you make a purchase on credit that’s worth between £100 and £30,000, and something goes wrong during the transaction – for example, if items aren’t delivered or they are faulty and you can’t get them refunded – you’ll be compensated by the card provider.” 

This doesn’t apply to business credit cards.

What is a business charge card

If you like the idea of some of the benefits of a credit card but you’re worried about getting into debt or losing control of spending then a business charge card could be a good option. You get given credit but the card must be repaid in full every month. 

The benefits of a business charge card: 

  • They usually have no credit limit or a high one. 
  • They usually have no or very low-interest rates but may have annual fees.
  • They are a better way to monitor spending and make sure you don’t get into debt.

How to get a business credit card

After you’ve reviewed the different credit card deals and decided that getting one is the best option for your business you’ll need to apply online or at the bank. Whether you are accepted or not and the credit limit you are offered will be subject to your application status. 

To be eligible for a business credit card you are likely to need to:

  • Be a UK resident. 
  • Be aged 18 or over. 
  • Be a sole trader, partner or director with authority to borrow on behalf of your business.
  • Require the lending for business use.
  • Have a good credit history and/or manage your existing financial commitments well. 

You may also need to have a business current account set up with the bank that you are applying for the credit card with but it’s worth checking with the bank.

Compare the best business credit cards

As well as just looking at rates and offers, consider what else is important to you and your business, for example: 

  • A good app for checking your balance, recent transactions, statements, making monthly payments and reviewing spend. 
  • 24/7 customer service. 
  • Purchase, fraud or misuse protection.

Look a bit deeper into the rewards offered and have a think if they are actually ones that you’re likely to use. Try to remember what they are and what you get cash back for so you can capitalise on the deals once you have the card.

Business credit card 

Representative APR %/Purchase rate p.a. % 

Offers 

Credit limit 

Annual fee  

Lloyd’s business credit card 

22.4% APR (variable) / 16.3% 

Maximum 45 days interest-free period on new purchases if you pay your balance in full and on time each month. Withdraw up to £500 a day (not interest-free). 

Minimum limit £1,000 and maximum £10,000 

£32

Santander business credit card 

23.7% APR (variable) / 18.9% (variable) 

1% cashback on all business spending. Up to 56 days interest-free credit on purchases when you pay your balance in full and on time each month.

Assumed £1,200

£30 – no charge for additional cards 

Natwest business credit card 

24.3% APR (variable)

Up to 56 days interest-free credit on purchases when you pay your balance in full and on time each month.

Minimum credit limit of £500 

£30 – no charge for the first year 

TSB business credit card 

17.6% APR (variable)

Up to 45 days interest-free credit. 

Minimum £50 and maximum £25,000 

£0 

HSBC Commercial Card

22% APR (variable) / 15.9% (variable) 

1% cashback on contactless payments offer for a limited period. 

Assumed £1,200

£32 – no charge for the first year 

Barclays Flexi credit card 

24.9% APR (variable) / 24.9% (variable) 

Initial 3-months interest-free purchase period. Various Business Rewards

Assumed £1,200

£0 

Metro Bank business credit card

14.9% APR 

Walk out of the store with a card. Up to 56 days interest-free credit on purchases when you pay your balance in full and on time each month.

Check with the bank.

£0 

The tables in this article give an overview of the main offers and charges. Check each business credit card for specifics on all details and charges and for the most up to date information. 

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