How do they work?

They work like personal credit cards but the credit card account is in your company's name.

They separate your business and personal finances because the card is in your business' name, not your own.

What are the benefits?

  • Manage your cash flow so you can pay for things when you are waiting for incoming money, like a customer paying a bill.

  • Extra cards, which mean you can issue several employees with cards linked to one account with just one bill to pay.

  • Work expenses can be paid for on a credit card, which removes the need for expenses forms and refunding your employees.

  • Itemised statements for each card lets you keep track of what the whole company, a department or an individual is spending.

  • Accounting is easier if you use card statements instead of receipts and paperwork. You can download them into specialist accounting software or Excel.

  • Emergency money from your credit card gives you immediate access to funds.

  • No interest will be charged for up to 56 days if you pay your statement in full.

How are they different to normal credit cards?

Although they work much like any other credit card, there are some differences.

You can usually borrow more with a business credit card because this is based on your business income, not just your personal income.

If you meet all your repayments on time, you could build your company's credit profile, which could help you get loans or other credit in the future.

What can you use them for?

You can use them to buy anything you could normally pay for with a credit card, for example:

  • Business equipment

  • Paying invoices

  • Travel expenses

  • Office expenses

  • Furniture

  • Entertaining clients

If you are able to pay it back quickly, you could even use the card for larger purchases instead of a short term loan.

Who can get a business credit card?

You can take out a business credit card whether you are a sole trader or help run the finances of a larger company.

There is usually a minimum amount your business will need to earn to qualify, and some cards only accept certain types of company.

Some banks offer different products and services depending on the size of your business, for example:

  1. Start up businesses

  2. Companies with turnover of up to 2 million

  3. Companies with turnover of more than 2 million

  4. International businesses

Business credit cards are only available if you are over 18 and live in the UK. Your business must to be registered in the UK*. Some cards are only available if you also take out a current account with the provider.

* Including the Isle of Man, Channel Islands or Gibraltar.

How to apply for a business credit card

You can apply for a business credit card either:

  • Online

  • By phone

  • In a branch

  • By post

When a credit card company looks at your application, they will base their decision on:

  • What they think your business can afford

  • Your company's assets

  • Your business' credit history

When you apply, you will need to provide details of your business, including:

  • Company name

  • Contact details

  • Income and turnover

  • How many employees you have

  • When your business started

  • What countries you trade with

If you are a sole trader, they may also look at your personal finances.

Here is everything you need to know about how to apply for a credit card.

How much do they cost?

The main costs of a business credit card are:

  • Any annual fees

  • The interest rate if you do not clear the balance in full every month

  • Charges for things like going over your credit limit

Business credit cards' interest rates and fees can be higher than on standard cards, and more of them charge annual fees (although some are free for the first year).

What credit limit will your business get?

The credit limit is the maximum balance you can owe on your card.

The credit limit you are offered will depend on your business' financial strength and credit score rather than your personal circumstances.

If your business has a strong credit history, you will usually be offered a higher credit limit as well as a lower interest rate.

If you give supplementary cards to several employees you can sometimes set an individual credit limit to each person, depending on how much you are happy to let them spend each month.

What types can you get?

Business credit cards can come with the following features:

Our business credit card comparison includes cards of each type.

Protection on a business credit card

The protection available differs to personal cards, and Section 75 does not apply on business credit cards.

However, some card providers offer:

  • Online guarantees to cover you against fraudulent online use

  • Insurance to cover misuse of the card by an employee

  • Extra insurance to cover any fraud or misuse

Some also add free travel insurance cover for medical expenses, accidents and lost luggage.

What are the alternatives?

You could spend on the debit card linked to your business' current account or get a charge card instead.

You have to pay off the balance of a charge card in full every month, meaning you cannot use them to borrow beyond the repayment date or build up debts.