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Business credit cards

Get your firm's finances organised with a company credit card. Our best business credit cards could earn you rewards or save you money with low interest rates and fees.

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Business credit cards explained

Written by Marianne Curphey; Last updated: 24 February 2021

Learn everything you need to know about business credit cards and find the right card for your company

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Business credit cards

Business or company credit cards 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 the full amount off each 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, which could 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 for business, or are taking 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, and even other perks, like hotel discounts, upgrades and concierge services.

If your company credit card has some of these perks, then in theory, if you have spent enough throughout the year, you could reward your staff with a weekend break, or something else paid for by the credit card's rewards scheme.

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.

Flight

You may be able to collect airmiles or Avios with a business credit card, so you can reward your staff in future

Company credit cards also offer fraud protection. If there's fraud on your card, as long as you report the fraud within a designated period, you won't be liable.

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 suppliers, 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 plan to use the 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 right credit card for you:

  • Do you need supplementary business credit cards? If you want to give supplementary 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 cannot afford 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.

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