Business Credit cards (A 9 point review)
By
HuutiMoney
In this brief guide, we are going to explore what business credit cards are, how to get them and how to effectively manage them to stay out of debt.
What are business credit cards?
business credit cards are credit cards which are specifically targeted towards Businesses.
Business credit cards from their outlook are generally the same as other credit cards. business credit cards are in the business’s name and not your name.
These credit cards are designed with unique features which allow businesses to have access to funds to match their various industries. Some merchants even produce specific credit cards for businesses which use their services or buy their products as a way of further providing good customer service and retaining their business clients.
business credit cards may help you manage your business purchases, general business expenditure and help you through difficult cash flow periods as most business credit cards will offer interest-free periods of up to 56 days.
A good example of this is tool station with its tool station business credit card.
Your business credit card will be used by you and your employees to make repayments and cover any other expenses relating to the company and the company is legally responsible for making the credit card repayments and responsible for the credit card balance.
With a business credit card you can pay off the balance you owe in full or make the minimum monthly repayments as you would with a personal credit card. As with a personal credit card, if you don’t make the minimum credit card repayments on your business credit card then you may be charged a late fee. If you carry over a credit card balance from month to month then you may end up in credit card debt but will certainly be charged interest on the credit card balance.
If you had an introductory rate on your business credit card then you may lose this rate if you fail to make your minimum monthly repayment.
Examples of business credit cards in the UK
Company – Max credit limit- min APR- Min Annual fee
| Capital on Tap | £50,000 | 9.9% | Free for basic card |
| Natwest | Subject to status | 24.5% | From £32 per card holder |
| Barclays/Barclaycard | Not stated | 24.9% | From £0 |
| Santander | Not stated | 23.7% | £30 |
| HSBC | Not stated | 22.0% | 1st year free then £32 |
| RBS | Not stated | 24.5% | From £32 per card holder |
| American Express | Not stated | Not stated | From £0 |
| Metro Bank | Not stated | 13% | No fee |
| Lloyds Bank | £10,000 | 22.4% | £32 per card |
| TSB | Not stated | 22.4% | £32 per card |
| Yorkshire Bank | Not stated | 22.4% | £28 per card |
| Clydesdale Bank | Not stated | 22.4% | £28 per card |
| Cashplus | £3,000 | 24.9% | No fee |
| Bank of Scotland | £10,000 | 22.4% | £32 per card |
Can you get a business credit card?
You may be able to get a business credit card if any of the below describes you
You run a small business
You are a sole trader
You are setting up a new business
You make purchases for a larger company you work for
How are you assessed for a business credit card
When you apply for a business credit card the lender will usually check the directors credit report and the credit report of the company. In some cases, the credit card company will request your companies bank statements and financial accounts( for 2 years) before they issue you with a business credit card or decide what your credit limit will be.
Types of business credit cards
There are different types of business credit cards. Some of these include:
Reward cards –
You could also get a business rewards credit card which allows you to earn reward points which you can use to purchase things or get discounts on other things.
Low-interest credit cards –
You could also get a low-interest business credit card which charges you a low APR on your credit card balance. This kind of card may be good for you if your company carries a lot of balance from one month to the other.
Air miles credit cards –
business air mile credit cards will allow your business to earn a lot of miles if your employees fly a lot. You can then use these miles to buy tickets, get discounts on your flight tickets or upgrade tickets.
Cashback credit cards –
Your business can use a business cashback credit card which allows you to earn cashback as you spend on your purchases. Your cashback may cease if you don’t make your minimum credit card repayment.
These credit cards will all have different terms which you should take into consideration before getting the card.
Advantages of business credit cards
There are many advantages of business credit cards. We have highlighted a few of them below.
business credit cards can help companies manage their cash flow. This means if you are still expecting income from sales you can still buy more stock or goods with a business credit card.
business credit cards can help a business build its credit score if the credit card is used properly.
business credit cards will also mean that your employees don’t have to cover their expenses and then claim them back as they can simply use the business credit card. This means less administrative work and less costs for you.
business credit cards will also make it much easier for you to manage your expenses as you may be able to download the data from your credit card statement into your accounting software.
Disadvantages of business credit cards
There are some disadvantages of business credit cards, we have listed a few below:
As with all credit cards, compound interest is charged and credit card debs can easily pile up if you are not careful.
As with any other credit card, carrying a balance from one month to the other will increase the amount of debt you are incurring as you are continuously charged interest every month.
You must set a clear policy when giving your employees the company credit card as if they overspend on it, it will be the companies liability.
Credit cards may not be helpful in every situation as not all your vendors may accept card payments. This means you may have to do a money transfer from your credit card to your bank and this may cost you.
What to consider when getting your business credit card?
Whilst a business credit card may be right for you, there could also be other potential credit cards which suit you better. It is always advisable to use a credit card eligibility checker
Which provides you with all the credit cards you may be eligible for.
When comparing multiple credit cards; below are the things you should look out for before applying.
Eligibility
Each card issuer will have its own lending criteria that you will need to meet before they will provide you with an offer of credit. There are now credit card eligibility checker platforms which let you know which credit cards you are eligible for and which you have a high probability of getting on application.
Most credit card providers now have their own credit card eligibility systems in place which will let you know if you will be approved for a credit card with them or not. These tools use a soft credit check t pull your credit file data and hence does not leave any footprints which are visible to the public or harm your credit score.
You should avoid applying for a credit card if you are not confident you will be accepted as rejections for credit could damage your credit score and history. This may then affect your ability to get further credit in the future.
Interest rates
When getting a credit card, the interest rates on the credit card are a very important factor and you should always look out for the APR figure. The interest rates on the credit card are the rates that will be charged on any outstanding credit card balance which you carry over from one month to another.If you pay your credit card balance in full each month then you will not have any interest to pay.
Credit cards typically come with up to 55 interest-free days on purchases if you don’t carry a balance month-to-month.
Credit limits
You should look at the credit Credit limits when choosing a credit card provider as the credit card limits will determine how much you can spend on your credit card. Most credit card providers may offer you a credit limit increase if you can show good credit behavior over a few months.
Rewards and perks
Credit card providers offer various rewards and perks but usually these are reserved for applicants with high credit scores.
Fees
Some credit card providers will have annual fees on their credit cards but these are usually for credit cards with high credit card limits and lots of rewards or perks. Most business credit cards will have an annual fee.
You should always check what fees are attached to your credit card.These can include annual or monthly account fees, cash advance (withdrawing cash using the card) fees, overseas transaction fees and others.
How to get your business credit card
To get your business credit card, check to see if your company has a credit score first.
If you are unsure of what your credit score is then you should check your credit score from the four credit bureaus in the UK: Experian, Crediva, Equifax and Transunion.
Some of these credit bureaus may charge you a fee to view your company’s credit report.
Once you have done this you should then check on a credit card eligibility platform to see what credit cards you are eligible for and then apply for the best credit card.
Alternatively, you should go to the credit card providers website and make an application. Most credit card providers will expect a minimum turnover and based on this they could provide you with a credit limit which usually ranges from £1,000 to £10,000.
Some of the business credit card providers in the UK:
- Capital On Tap
Some of the features and benefits of Capital On Tap’s business credit card.
Credit limit up to £50,000
Rewards Cards where you can earn up to 1% Cashback or Avios
Cards for sole traders & freelancers
Quick application in 2 minutes
Rates as low as 9.9% APR
Up to 56 days interest free
Basic card has no monthly or or annual fee
Unlimited free FX and ATM withdrawals
Rated 4.8 out of 5 on Trustpilot
Up to 10 free supplementary cards
2. NatWest Bank
Some of the features and benefits of NatWest’s business credit card.
Offers two credit cards
A convenient method of managing expenses and paying for goods
Can help build your credit profile
Variable APR starting at 24.5%
45 days interest-free credit
Minimum credit limit of £500 with maximum level subject to status
Fees from £32 per year per cardholder
Cashback available on the Business Plus credit card
Available to sole traders, limited companies, partnerships, charities, clubs and societies
Only available to NatWest business bank account holders
3. Barclaycard
Some of the features and benefits of Barclaycard’s business credit card.
Choice of business credit and charge cards
Flexible borrowing
Introductory offers available
Offers extras such as travel insurance and foreign exchange savings
Card fees starting at no charge
Variable APR starting 24.9%
Available to business start-ups
Offers an initial interest-free period
Cashback available on the Premium Plus credit and charge cards
Online card selector tool
4. Santander Bank
Some of the features and benefits of Santander’s business credit card.
Designed for small to medium businesses
Flexible way of managing business expenses
1% cashback on purchases
No additional card costs
No foreign transaction fees on purchases abroad
Up to 56 days interest-free credit on purchases
Flexible and simple payment options
Detailed monthly statements
Ability to control monthly spending limits per cardholder
Utilises contactless and mobile payments
5. HSBC Bank
Some of the features and benefits of HSBC’s business credit card.
First year free
Manage day-to-day expenses
Boost your cash flow with up to 56 days interest-free credit
Tailored credit limit
Protected against fraudulent transactions
Contactless technology
Track your spend through financial reports
Flexible repayment options
Online banking
Additional cards available
6. RBS Bank
Some of the features and benefits of RBS’ business credit card.
Offers two credit cards
An easy and convenient way to pay for goods
An effective method of managing expenses
Can help with your cash flow
Variable APR from 24.5%
Annual card fee from £32 per cardholder
Can help build your credit profile
Up to 45 days interest-free credit on purchases
Cashback available on the Business Plus credit card
Available to a wide variety of businesses and not-for-profits
7. American Express
Some of the features and benefits of American Express’ business credit card.
Choice of three business charge cards
All cards offer no pre-set card limit
Up to 54 days credit on purchases
The basic card has no annual card fees
Earn rewards with the Gold and Platinum cards
They give a welcome bonus of reward points to get you started
The platinum card offers travel benefits including travel insurance and rewards
Purchase protection and refund protection on Gold and Platinum cards
Up to 99 complimentary Gold cards available with both Gold and Platinum card accounts
Available to UK registered businesses with no CCJs
8. Metro Bank
Some of the features and benefits of Metro Bank’s business credit card.
Simple and transparent business credit card
A single low rate of 13% variable APR
No annual fees
Free transactions in Europe
Up to 56 days interest-free credit on purchases
Offers online, in-store, over the phone and app banking
Facility to walk out of any Metro Bank store with a card straight away
Simple card replacement in store
Must hold a business or commercial current account with them
A network of stores open 7 days a week with no appointments needed
9. Lloyds Bank
Some of the features and benefits of Lloyds Bank’s business credit card.
Cards with up to £10,000 credit limit
Representative 22.4% variable APR
Up to 45 days interest-free credit
An annual fee per card of £32
Withdraw up to £500 per day
Can issue up to 20 cards
Each employee can have their own spending limit
Flexible payment options
Must be a business current account holder
Available to sole traders, partners and directors
10. TSB Bank
Some of the features and benefits of TSB’ business credit card.
VISA credit card
Can help you manage your cash flow
Flexible repayment options
Representative variable APR of 22.4%
Annual card fee of £32
Up to 45 days interest-free credit on purchases
Monthly detailed statements
Cheaper to use than cheques
Cash withdrawal limit up to £500 per day
Additional cards available with individual card limits
11. Yorkshire Bank
Some of the features and benefits of Yorkshire Bank’s business credit card.
Can help you manage your finances more effectively
Increase your cash flow
Representative 22.4% variable APR
Up to 59 days interest-free credit on purchases
Annual card fee of £28
Secure method of making transactions
Includes anti-fraud technology
Comes with SmartData online accounting system as standard
Enhanced tracking and reporting facilities
Offers no annual fee for the first year
12. Clydesdale Bank
Some of the features and benefits of Clydesdale Bank’s business credit card.
A credit card that can help you manage your expenses
Representative 22.4% variable APR
Free for the first 12 months
£28 annual fee after the first year
Up to 59 days interest-free credit on purchases
Non-Sterling transaction fees apply
Includes Mastercard Business Savings scheme
Access to SmartData online accountancy tool
Advanced tracking facilities
Anti-fraud protection
13. Cashplus
Some of the features and benefits of Cashplus’ business credit card.
Initial credit card limit up to £3,000
Simple product with no hidden fees
No annual card fees
Simple online application
Instant online decision
Representative variable APR of 24.9%
Up to 56 days interest-free credit on purchases
Flexible repayment options
Itemised billing to help track your expenditure
Contactless payments
14. Bank of Scotland
Some of the features and benefits of Bank of Scotland’s business credit card.
Manage your business spend more effectively
Can be used at home and abroad
Credit limit up to £10,000
Up to 45 days interest-free credit on purchases
Flexible repayment options
Annual card fee of £32
Detailed monthly statements
Access your credit card account through internet banking
Can issue up to 20 cards to employees
Each card can have an individualised card limit
In this brief guide, we discussed business credit cards. If you have any further questions or comments then please let us know.
If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.
You can also contact the debt charity “Step Change” if you are in debt and need help.
