Compare Business Credit Cards

What is a business credit card?

A business credit card is a credit card used only for business purposes instead of personal use. You can apply for a business credit card regardless of your business size or structure - so it doesn’t matter whether you’re a limited company, partnership or sole trader.

Like with a personal credit card, you’re given a limit (some lenders offer limitless business credit cards), you spend the money, and you repay monthly or over a longer period. You can usually access an interest-free period for most cards, which means you’ll only repay with interest after this period has ended.

What are the different types of business credit cards?

Just like with personal credit cards, there are different types of business credit cards. Which one you choose to apply for depends on what you’ll get the most use or benefit from. The most common types of business credit cards are:

• Purchase business credit cards
• Balance transfer business credit cards
• Rewards business credit cards

Wondering which one will suit your needs? Read more about them below.

Purchase business credit cards

A purchasing credit card is a card that helps you spread the cost of items you buy over a period of time. This helps business owners better manage their cash flow. So if you’ve got something you want to buy and it’s expensive, you can pay it back over a longer period of time, which makes money management so much easier and less stressful.

Balance transfer business credit cards

If you’ve already got a business credit card with another provider and you want to move to a different one, you can use a balance transfer credit card to do this. You transfer the balance of your current credit cards over to your new provider.

Balance transfer credit cards can help you consolidate your debt into one monthly repayment, and you can benefit from lower interest fees or zero per cent fees on your new credit card. Balance transfer cards also come with interest-free periods, which means you get a bit of breathing space to make a dent in repaying your debt interest-free.

Rewards business credit cards

As the name might suggest, you can collect rewards with a reward business credit card. What rewards can you unlock with these kinds of business credit cards?

• Cashback
• Air miles and money off travel
• Discounted corporate gifts
• Discounted workplace wellbeing
• All kinds - check with the provider

Advantages of business credit cards

Like all types of business finance, there are many advantages of a business credit card; here are just a few:

• Manage cash flow — When you have stock to buy or you have an unexpected expense to pay, ensuring you have enough cash to pay on time can be stressful. Having a business credit card to dip into for these situations can give you peace of mind.
• Separate your personal finances — One of the biggest advantages of business credit cards in the UK is separating business and personal expenses. This makes accounting, bookkeeping, taxes, and filing expenses much easier with clear paper trails.
• Improve your credit score — Responsible credit card use can help demonstrate your company’s reliability and improve your commercial credit profile. This can help with getting loans, mortgages, and other financing in the future.
• Enjoy cashback and earn rewards — Many business credit card providers offer cashback (usually around 1%), discounted travel insurance, purchase protection and more.
• Quick access to funds — Credit cards provide flexibility in emergency situations when you may need short-term financing for an unexpected business expense. As long as you make at least the minimum payment, you will not default.

Disadvantages of business credit cards

There are some disadvantages of business credit cards you should consider:

• Interest charges — Although many providers offer interest-free periods, you’ll be subject to paying interest fees on top of your minimum monthly repayment if this period runs out. Business credit card interest fees can vary from anything between 17% and 35.5%. You can see how repayments can quickly get out of control. To remain in control of your credit card, ensure you can pay off any balances in full in each monthly billing cycle.
• Personal liability — Most business credit card providers require you to sign a personal guarantee. So if your business defaults on credit card payments, the provider will expect you to settle the outstanding balance personally.
• Higher credit limits — Business credit cards usually come with higher credit limits than personal credit cards. And although that initially sounds like an advantage, it can be easy to become dependent on your credit card. This might mean you buy more stock than you initially need.

Can I get a business credit card with bad credit?

Yes, you can get a credit card with bad credit. Your options might just be a little limited, as not every lender is willing to lend to businesses or business owners with poor credit history. With bad credit, you’ll usually find that lenders might start you off on a lower credit limit and charge you higher than average interest rates.

Within minutes, you can find out whether you’d be accepted for a business credit card. Compare business credit cards

5 ways to compare business credit cards to get the best deal:

The only way you’ll find the best credit card deals for your business is to compare what’s currently on the market. But what is it exactly that you should be comparing?

1. Interest rates and interest-free periods

Most credit cards come with an interest-free period, but their length varies. The interest-free period is so helpful as a business owner. Borrowing money and paying it back without interest is an attractive proposition. But don’t forget to look at the fees and charges that kick in after this period. Yes, one lender’s interest-free period might be longer than others, but what matters most is what you'll be paying after this period ends.

2. Charges and fees

As we’ve mentioned above, it’s crucial you understand the fees you’ll be paying after any interest-free periods. But don’t forget to consider other fees. Some providers charge late payment fees, annual fees, balance transfer fees, fees if you go over the limit, or fees to withdraw cash. Again, it’s important you understand the fees you’ll be expected to pay before applying.

3. Rewards

Which rewards matter to you depends on your business. For example, if your employees travel a lot, you might find giving them access to a credit card can help them unlock travel benefits such as racking up air miles or getting money off travel costs. Many providers offer various discounts and cashback on certain items; compare providers to make sure you’re accessing the most relevant rewards for your business.

4. Minimum monthly payments

Although you might plan to repay your outstanding debt as quickly as possible, for the months where your purse strings are a little tighter, just paying the minimum monthly payment is sometimes the only option. You should always check that you can afford the minimum monthly payment comfortably because if you default on this, it could affect your credit card limit and credit score (missed payments are recorded on your credit report).

5. Think about why you want a business credit card

The best way to get the best deal is to understand how you’re planning on using the credit card in the first place. Maybe you’re just using it as a financial safety net, or you want to unlock cashback benefits to use on your employees. Whatever your reasons for wanting a business credit card, you need to understand them before you start looking for deals so you can prioritise all the things we’ve mentioned above.

What are the perks of company credit cards?

Credit cards are a revolving credit solution, which means that when you’ve repaid what you’ve spent, you can use the money all over again. This is beneficial to any business owner because having cash available whenever you need it can take the pressure off paying fixed expenses, like rent or staff wages.

They also come in handy when it comes to streamlining your financial admin — no more collecting receipts off employees to pay them back for expenses; a credit card means you can keep tabs on their spending while removing the administrative headache.

Having access to a business credit card means you can start building healthy credit for your business, too. This can make you more attractive to lenders should you need to access different forms of financing in the future.

The perks of company credit cards in a nutshell:

• Quick and consistent access to cash when you need it
• Monitor employee spending easily
• Simplify financial admin by consolidating debt
• Unlock large credit limits
• Get rewards like discounted business supplies and cashback

Can I use a personal credit card instead?

Although not illegal, you should avoid using your personal credit card for business purposes for many reasons. If you’re just starting out, it’s understandable that signing up for a business credit card might not be your number one priority. But as you get more established, you should really consider switching.

Not only will it be difficult to separate personal and business expenses when it comes to tax calculations. But using your personal credit card like this can mean you become personally liable for all debts to do with your business. And you need to avoid that where you can.

Business credit cards also offer users better rates and access to higher limits. Higher limits can mean you can afford to take calculated risks with your business. They can also help you build good business credit, whereas personal credit cards will only help you build personal credit.

Are there any costs associated with business credit cards?

It depends on what kind of credit card you apply for, but usually, you eventually pay interest fees on all cards when any interest-free periods run out. But specifically, if you apply for a balance transfer credit card, you’ll have to pay a fee, usually around 2% or 3%, to transfer that balance across to the new provider.

Always check the terms and conditions of the company credit card before you agree to them. If you don’t know what fees are involved, you can’t make an informed decision.

How to get a business credit card:

Getting a business credit card is simple. Here at Capalona, we’re brokers, which means we’ve done all of the legwork for you by gathering all provider credit card information in the table above.

Comparing credit cards can be time-consuming and confusing, but we’re here to help make this process as smooth and quick as possible.

To get started, all you need to do is check out the table above, scan and compare our list of providers - read more information about each before you click through to their site to complete your application.