What is a business credit card and how does it work?
A business credit card is similar to a personal credit card but is designed to be used by a business rather than an individual. You can usually apply for more than one card on the account which means you can issue cards to employees in your business if you wish to. The account will have an overall credit limit but limits are typically higher than on a standard credit card. Credit card repayments are made each month and, if the balance isn’t paid off in full, interest will be charged.
Whether a business credit card can affect personal credit will depend on the type of business you run. If you are a sole trader, you will have responsibility for the debt so if you are late with payments or are unable to pay back the amount borrowed, your personal credit is likely to be affected. If, on the other hand, the business is a limited company your personal credit won’t be affected as the credit is borrowed against the name of the company.
Which are the best business credit cards? - June 2023
| Name of card | Representative APR | Annual fee | Perks | Best for... |
| Low as 14.67% APR (variable) | £0 | 1% cashback on every £1 spent, no foreign exchange or UK ATM charges, credit facility up to £250,000 | Low rates for some small businesses and no annual fee | |
| 23.7% variable | £30 | 1% cashback on all business spending, no foreign transaction fees on purchases in local currency | Those looking for cashback on day-to-day business spending | |
| 14.9% variable | £0 | Free transactions in most European countries | Relatively low rate and no fee | |
| N/A | £650 | 1 membership reward point per £1 spent, access to more than 1,200 airport lounges worldwide | Those looking for flexible reward points that can be redeemed against both travel and retail | |
| 26.2% variable | £0 | 1% cashback on purchases, access to accounting software from FreshBooks, rewards with selected retailers | Those looking for good functionality to help manage spending and cashback |
Best business credit card for small businesses
Capital on Tap Business credit card
- Best for: Businesses looking for a low-cost option
- Representative APR: Low as 14.67% APR (variable)
- Introductory offer: No introductory offers
- Perks: 1% cashback for every £1 spent, no foreign exchange or UK ATM charges, credit facility up to £250,000, unlimied free supplementary cards
- Annual fee: No annual fee (£99 per year to upgrade to the Capital on Tap Business Rewards credit card)
- Why we like it: Rates could be as low as 14.7%, depending on your individual business
Best business credit card for medium businesses
Santander Business Cashback credit card
- Best for: Those who already have a Santander Business current account
- Representative APR: 23.7% variable
- Introductory offer: No introductory offers
- Perks: 1% cashback on all business spending, no foreign transaction fees on purchases in local currency, free supplementary cards available
- Annual fee: £30
- Why we like it: It balances a relatively low annual fee with the potential to earn a decent level of cashback, particularly if you have several cardholders
Best business credit card with no fee
Metro Bank Business credit card
- Best for: Those looking for a no-fee, low-rate credit card and existing Metro Business current account holders
- Representative APR: 14.9% variable
- Introductory offer: No introductory offers
- Perks: Free transactions in most European countries
- Annual fee: No annual fee
- Why we like it: It's a simple card with a low-interest rate, with the added bonus that you can apply in branch and walk out with the card on the same day
Best business credit card for rewards
American Express Business Platinum Credit Card
- Best for: Businesses looking for flexible rewards
- Representative APR: Not applicable as this is a charge card
- Introductory offer: 40,000 bonus Membership Rewards if you spend £6,000 in the first 3 months
- Perks: Earn 1 point for every £1 you spend on the card, 2x reward points on purchases when spend £10,000 in a month, £200 annual travel credit when you spend at Amex Travel online, access to more than 1,200 airport lounges worldwide, annual digital subscription to The Times and The Sunday Times, upgrades and other benefits at hotels and restaurants around the world
- Annual fee: £650
- Why we like it: Although it attracts a high annual fee, the membership rewards points are flexible and can be used for buying computers for the office or taking clients out, as well as for air travel
For a review of other cards in the American Express range, read our article "Which is the best American Express credit card?"
Best business credit card for cashback
Barclaycard Select Cashback Business credit card
- Best for: Those looking for a good basic rate of cashback, with the additional perk of free accounting software from FreshBooks
- Representative APR: 26.2% variable
- Introductory offer: Welcome bonus of up to £85 if spend £5,000 or more in first 3 months (applications before 22/06/23) Up to 10% cashback with BT and EE (Offer ends 30/06/23)
- Perks: 1% cashback on all purchases, FreshBooks accounting software
- Annual fee: No annual fee
- Why we like it: The cashback element is complemented by other rewards and is unlimited
Do I need a business credit card?
You may find a business credit card useful for managing cash flow or making purchases for your company over the phone or online. Business credit cards are also a good way of separating your business finances from your personal finances and some have the added benefit of helping you to track and manage your spending.
These cards can also be useful for managing your employees’ expenses. Employees can use a business card to pay for work-related purchases rather than having to make an expense claim which can help save time and resources. A business credit card can also help build up a credit profile, which is particularly important if the business is new.
Pros and cons of a business credit card
Pros of business credit cards
- A business credit card can help with cash flow problems, for example, if an invoice hasn’t been paid. Most credit cards offer around 56 days interest-free on purchases.
- You can separate personal finances from your business finances.
- You can usually take advantage of a higher credit limit than on a standard credit card.
- A business credit card can make work expenses easier to manage.
- Some credit cards allow you to earn rewards or cashback.
Cons of business credit cards
- With a personal credit card, purchases over £100 and up to £30,000 are protected under section 75 of the Consumer Credit Act. Unfortunately, this protection does not extend to business credit cards. For more information about Section 75, read our article Section 75 of the Consumer Credit Act explained.
- Annual fees and interest rates can be high.
- Stringent checks are carried out when applying for a business credit card. Start-ups and new businesses without a credit history may find it harder to get accepted.
- You are still personally responsible for the debt if you are a sole trader
Things to consider before getting a business credit card
Before applying for a business credit card, it is important to consider the following:
- Interest rates - Check what interest rate you will be charged as the APR on business credit cards can be much higher than on personal credit cards.
- Spending habits - It’s important to consider how you and your employees plan to use a business credit card. If you won’t be able to pay off the balance in full each month, try to choose a card with a lower APR. If, on the other hand, you can afford to clear the balance each month, you may want to opt for a card that offers rewards and other benefits.
- Fees and charges - Many business cards charge an annual fee so make sure this is affordable. Also check fees for late payments, exceeding the credit limit, foreign transactions and cash withdrawals.
- Interest-free days - Most business credit cards give you up to 56 days’ interest-free on purchases, providing you pay your balance in full and on time. However, some give you less than this and others give you more, so check carefully.
- Minimum payments - These are often set at very low levels so always try to pay off more than the minimum each month if you can.
- Extra perks - If you are looking for a card that offers rewards, choose benefits your company will make full use of. For example, if your business travels regularly, Avios or other flight rewards may suit you best.
- Eligibility - If your business is new and hasn’t built up a credit profile, you may not qualify for certain credit cards. Your business’ credit profile can also affect the APR you are offered - lenders only have to offer the advertised APR to 51% of applicants. Keep in mind too that with some credit cards, you may be required to open a bank account with the same lender.
Alternatives to a business credit card
If you are not sure a business credit card is right for you, you could also consider a business charge card. These allow you to make purchases in the same way as a credit card but there is no credit facility which means you will need to pay off your balance in full each month. Business charge cards do not usually have a limit on how much you can spend and do not have an APR as you cannot use them to borrow money.
However, be aware if you do not manage to pay off your balance in full, you will have to pay hefty fees as well as interest and this can affect your credit rating. On the plus side, business charge cards often offer benefits and rewards such as travel insurance, concierge services, access to airport lounges and cashback.
Alternatively, if you need long-term funding, a business loan might be a better option as this can work out to be a cheaper way to borrow.
