Business credit cards
The right corporate credit card can provide a helpful line of credit for your business, help you manage spending and make accounting easier. You can benefit from low interest rates and earn rewards too.
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Business credit cards explained
Written by Marianne Curphey; Last updated: March 15, 2023
Learn everything you need to know about business credit cards and find the right card for your company
A business or corporate credit card could be helpful to your business, simplifying your accounting, improving your cash-flow and making it easier to buy what you need.
Read on for everything you need to know about business credit cards and find out how to pick the best business credit cards for you and your company.
Why use a business credit card?
Business credit cards can be a useful way of keeping track of your company's spending, paying for expenses and having access to short-term credit if needed.
Similar to the way you would use a personal credit card, business credit cards allow you to spend now and pay off the money you spend later. But unlike personal credit cards, you must pay your whole bill every month.
The credit limit amount available will be based on the business' status and accounts.
Advantages of a business credit card
You can expect to receive up to 56 days interest-free credit on your spending. This can help to spread the cost of your business expenses and improve cash-flow.
If you know you'll be able to pay off the credit in a month or so, paying for items on credit can keep your company's bank balance safe for emergencies or expenses that require immediate payment.
Many business credit cards have high spending limits, or, in some cases, no limit at all – which can boost the purchasing power of your business. But it's important to only spend what you know you can pay back on time. Business credit cards will expect the full balance to be paid off each month by direct debit from your business account.
Using a business credit card makes it easier to buy what you need online or over the phone. A business card is also useful if you or your employees have to travel abroad or regularly have external meetings with clients.
This means the payments are limited to the company credit card, rather than your employees having to collect the receipts and file them off to be expensed.
As well as being a convenient way to pay for business expenses while travelling, some cards offer preferential exchange rates, free worldwide travel and medical insurance. Perks like hotel discounts, upgrades and concierge service are sometimes included too.
Spend enough on your business credit card and you might even be able to use these schemes to treat staff with weekend breaks or other rewards.
Other benefits of a company credit card
Essentially, using a business credit card can help you to simplify your business finances. A monthly statement means you can keep track of expenses and see them all in one place. You will also have online and app-based access to keep up to date more often.
It can also cut the need for petty cash – you may get supplementary credit cards for your employees, making it easier to administer employee expenses.
Your statement will show who spent what and when, and you can set personal spending limits for each supplementary card.
You may be able to collect airmiles or Avios with a business credit card, so you can reward your staff in future
Credit cards for businesses also offer fraud protection. If there's fraud on your card, you won't be liable so long as you report the incident within the required period.
Some card issuers even offer Cardholder Misuse Insurance, to protect you in the event that an employee misuses their credit card.
A number of business credit cards offer discount and reward schemes. Your credit card could entitle you to discounts on everything from flights to office supplies, depending on the card provider.
You can also earn rewards points like AirMiles or Nectar points with some cards, which means you could earn enough to treat some of your staff without having to spend any more than you normally would.
Ultimately, finding the best business credit cards comes down to you and your company's needs.
Some companies will prefer to have an expenses system or pay for things only with the money they have coming in, but a business credit card, if used wisely, can be a financial asset.
Things to consider with company credit cards
Think about how you would use a business credit card – knowing what you want to get out of it will make it easier to pick the right deal. There are a few important criteria to consider when choosing the best business credit card for you:
Do you need supplementary business credit cards? If you want to give additional cards to your employees, look into the supplementary services offered by the different providers. For example is there any charge for supplementary cards or a limit to the number you can have, and can you impose your own credit limit on each one?
How much can you afford to borrow? Think about how much you can realistically afford to repay and the maximum amount your business is likely to need to spend in a month. Even if you're offered a higher credit limit, don't be tempted to accept it, if you’ll struggle to pay it back each month.
Are you planning to borrow on your business credit card? Don't. Business credit cards are for short-term credit. If you fail to pay the balance in full your bank may reduce your credit limit, raise the APR, issue late payment fees and put a black mark on your business' credit rating.
Are you hoping for credit card protection for purchases? There is none. The section 75 protections are part of the Consumer Credit Act 1974 and apply to individual consumers only, not to businesses. If you use a personal credit card for a business expense and claim it back through an expenses claim, it might be covered, depending on the circumstances.
Always compare company credit cards and check the various offers available to make sure you get the right deal for your business.