As well as giving you access to additional funds, signing up for a business credit card gives you a number of worthwhile corporate benefits. So which business credit card provider is right for you?
Business credit cards and personal credit cards are entirely different products. Although they share similarities (where you’re assigned a credit limit for an agreed interest rate), business credit cards are evidently intended for business use only. This means that business credit cards will offer different features and benefits, as well as having different eligibility criteria.
What’s more, credit card providers will often stipulate that you cannot claim a welcome bonus if you’ve had a credit card from them before. However, if you’ve had a personal credit card and now you’re applying for a business one (or visa versa) then you usually can claim a welcome bonus. The cards are treated as different financial products, with very little relationship between each other.
Here are some of the other key differences between business and personal credit cards:
Business credit cards will require you to be a UK registered business, a stipulation that even sole traders are usually required to meet. As you’d expect, the application process is often slightly more rigorous for business credit cards, with stricter requirements and higher standards of creditworthiness.
Business and personal credit lines are separate, although don’t be surprised if your personal credit history is checked when applying for a business credit card. Additionally, there tends to be a higher agreed credit limit for business credit cards (usually ranging from £1,000 to £10,000).
Although you don’t exactly need a business credit card for an expense to be tax deductible, it certainly makes life a lot easier. Having to sift through personal bank statements to separate your allowable expenses from your personal ones is a gruelling process, and an unnecessary waste of your time.
Business credit cards not only make it easy for you (by keeping all your allowable expenses in one place), but crucially this extends to employees too. If you issue them a business credit card, you can track the company money they have spent, too. It’s also more accessible to download business credit card statements from across your organisation into specialised accounting software.
The benefits and features of business credit cards will be tailored for business operations. For example, with the sole intention of helping smooth over cash flow issues, many issuers will afford you a certain amount of days free from interest (usually around 50 days).
Other benefits can include partnership promotional programmes, such as a discount on Amazon Business.
Those with lifestyle businesses, or who are recently self-employed, may struggle to separate their work from their life. One of the best ways to really step up your business as its own entity is to have complete division between personal and business finances.
This way things like unexpectedly large personal bills are not a reflection of a downturn in your business. What’s more, using a business credit card means you aren’t borrowing from your personal finances to pay for office equipment or the resources needed to grow your business.
Whilst all business credit card providers differ slightly in their eligibility and application requirements, there tends to be a few shared eligibility rules:
Some providers may also have certain criteria around directors, business structure, bankruptcy and County Court judgements, so make sure you read the small-print.
At the start of Q2 2022, Capital on Tap has funded over £3.5 billion to small businesses in the UK and continues to grow its market share and reputation.
They are currently offering some extremely competitive business credit cards. Generally, the credit cards are aimed towards small and medium sized business, with a quick application process and a website design that’s marketed towards this demographic.
Capital on Tap cards have a representative APR of 29.9% and claim rates could be as low as 9.9%. Bear this in mind as you go through the application process and look out for what rate you’ll actually be offered.
Besides this, they are more transparent than most of the other providers with an upfront ETA of its application process (most applicants receive a lending decision in 2 minutes), visible cashback or Avios rewards and promise of no ATM, FX or hidden fees from them when spending on the card.
Then there’s the unlimited free company cards, with the ability to control and limit each one – this is a really useful addition and something many other providers charge for.
Add into the mix the fact that Capital on Tap allows you to use your funds to draw down cash to your bank account as soon as your limit has been approved, Capital on Tap can be considered a fiercely competitive funding and payment solution for your business.2 monthly
Metro Bank is arguably offering the most competitive and compelling small business credit cards of all the major providers. Metro Bank’s clear, easy-to-use website is a reflection of its simple and transparent business credit card. It is obvious that Metro Bank takes pride in innovation and design to help make things clear and easy for the customer.
This is a great business credit card if a company has dealings around Europe, as there are zero cash withdrawal or purchase fees. It is free, with zero annual fees and has a simple, low-cost (14.9%) APR. Metro Bank is not explicit in its credit limits, apart from stating that they start at £500. What is evident however, is that you will be receiving perhaps the most affordable business credit cards on the market, with a generous possibility of getting credit for 56 days interest free.
Clydesdale Bank is offering a security-focused, low cost business credit card, with a single representative APR of 22.4% along with anti-fraud technology. The first year of banking incurs no annual fee, and there is an impressive 59 days interest free credit on purchases. After the first year, the annual fee per card is £28.
Non-Sterling transactions incur a 2.95% fee, as well as the Mastercard exchange rate (which has a mild exchange markup). This is not ideal if you intend to use the card on overseas business trips.
Santander is a huge commercial bank, with a Spanish parent company that has a prominent presence around the world (Banco Santander). Santander is currently offering a fantastic corporate credit card for UK businesses, with a ton of great features.
To start, the £30 annual fee doesn’t seem like much of a setback when you’re granted foreign transactions with no fees, up to 56 days interest-free credit and 1% cashback on all business spending.
If you have a team you are looking to issue cards to they are well worth considering given that they offer the ability to have additional cards at no extra cost, as well as the ability to place monthly spending limits for each cardholder (i.e. each employee). The £30 annual fee is great value when divided by any number of additional cards.
The Santander business credit card also seems like a very good choice for businesses that operate abroad a lot. To offer zero foreign transaction fees is rare and could provide significant savings.
The Royal Bank of Scotland (RBS) are offering two seperate business cards, depending on your business’s needs. The Business Plus credit card not only costs more (£70 annual fee as opposed to £30), but it has a higher representative APR too, at 29% (variable).
But, in return, your business can benefit from additional benefits, such as 2% cashback on eligible suppliers, 1% on eligible field and accommodation, and 0.5% on everything else. On top of this, the Plus credit card has no charges for purchases abroad, making this the clear choice for companies who deal internationally.
The other key difference is that the standard Business credit card is free for the first year. It can also be free from then on if you spend £6,000+ per year. This makes it a very low cost option for smaller companies, not to mention the lower turnover requirements (under £2 million annually, as opposed to £6.5 million with the Plus account).
HSBC’s is a very solid business credit card — nothing less than what you would expect from a successful, reliable commercial bank. With a very middle-of-the-road £32 annual fee, you can gain access to a tailored credit limit with a representative 22% APR.
Disappointingly, there is nothing glamorous about the HSBC business credit card, as it somewhat lacks in benefits. You will however benefit greatly from the 56 days interest free credit to help smooth over any short-term cash flow issues.
Another thing you gain when dealing with HSBC is that it’s a very large, successful multinational corporation. You won’t be hard pressed to find a branch, or someone to speak to when contacting them through customer service. Overall, the company offers security, reliability and a solid credit card.
American Express, known as Amex, is a colossal US financial service corporation that operates around the world. Its operations in the UK are offering businesses 4 variations of an Amex business credit card. The Basic card is free, but somewhat lacks in features with no welcome offer, bonus or additional benefit. There is however still up to 42 days payment period on purchases.
You may think of Amex as being for really high fliers, and the products seem to reflect this reputation. At the top end, Amex’s credit cards cost up to £595 in annual fees! So is this worth it? The British Airways Amex Accelerating Business Card, for example, costs £210 annually and has a representative APR of 81.6% (variable).
You do benefit from a longer 56 days interest free, along with an extensive rewards system, emergency replacement card service, travel insurance and 24/7 global assistance.
Whilst Amex offers a free, Basic Card, it is mostly a provider that is suited to large, established businesses that can afford the large fees and therefore reap the rewards. Just be sure to pay off the balance each month to avoid those sky-high interest rates.
Barclay’s presents a substantial amount of choice regarding its business credit cards. Representative APR is between 19.9% and 34.9% (variable) depending on the card, and you can expect differences in the level of rewards, such as cashback.
What is important to note is that all cards are free of annual fees. And although there are many options, Barclays have an online comparison tool to make it easier to find what’s best for you.
Like with some other commercial banks, your credit rating can be affected if Barclays reject your application for a credit card. However, with its online eligibility checker, this shouldn’t happen as you can be sure before you actually send the application. Great!
Bank of Scotland (not to be confused with RBS), offers a very steady business credit card. There is a £32 annual charge per card that is issued, making it expensive for businesses with many employees (not to mention the 20 card limit). Nevertheless, the individualised card spending limits per issue does arguably make up for this, where you can better control employees’ spending — although companies like Capital On Tap offer this service for free!
A credit limit of up to £10,000 is available, with a manageable representative APR of 22.4% (variable). However, it’s clear that this credit card isn’t intended for very large businesses, as you must contact a special relationship manager when applying if your annual turnover exceeds £2 million.
With up to a 45 day interest free period, this is certainly a good business credit card option. Although, if you’re looking among the large traditional banks for a reliable credit card, it may be worth checking out ones with more branches as the Bank of Scotland only has 290, and are very limited to Scotland.
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