What is a business credit card?

If you run a business or make purchases for the company you work for, a credit card could be the best way to spend. Here's what you need to know about business credit cards.

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How do business credit cards work?

Business credit cards work just like personal credit cards, the difference is that 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 of business credit cards?

  • 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 business credit cards 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 business credit cards 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:

  • Start up businesses

  • Companies with turnover of up to £2 million

  • Companies with turnover of more than £2 million

  • 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 online, by phone or by visiting a branch of the provider that offers the card.

Some providers will only let you apply if you already hold an account with them, or will insist you apply over the phone if you're a new customer.

Information required

You will need to provide several details when you apply, including:

  • Your company's name

  • The type of business you run, e.g. sole trader or limited company

  • The sector your business works in, e.g. retail

  • The number of people you employ

  • When your business started trading

  • What you need the card for, e.g. purchases or cashflow

  • The credit limit you'd like for the card

  • What countries you trade with

You will also need to provide your personal details, and the details of any other employees you want to issue with a card. You may need to confirm your:

  • Full name

  • Date of birth

  • Mother's maiden name

  • Three years of previous addresses

  • Contact details

Make sure you have all the details you need before you start your application. Here is everything you need to know about how to apply for a credit card.

How many credit cards can a company have?

There is no limit to the total number of cards your company can hold, although some providers restrict how many you can take out with them. Holding more cards means you will have more credit available to spend with, so some providers might be put off if you have too many cards already.

Applying 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.

Compare business credit cards

How much do business credit cards 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).

Find out more about how to understand credit card charges.

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 of business credit cards 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 to business credit cards?

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.

Find the best credit card for you, whether you're looking for 0% card for balance transfers or purchases or day to day spending and rewards