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Have you considered a business credit card?

5 min read | Published 21/03/2024

A business credit card can be a helpful way of managing your business spending. In this guide, we’ll explain what a business credit card is, how it works and why it could be a helpful tool for your business.

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Business credit cards: the basics

A business credit card acts much like a personal credit card. You’ll be given a credit limit, a card to use to make transactions and you’ll receive monthly statements. The main difference is that a business credit card must be used for business transactions.

A particular benefit of having a business credit card is it can help pay unforeseen bills. It can also help manage monthly cash flow while building your business’s credit score. This in turn could reduce the potential impact on your own personal credit score.

Any expenditure on a business credit card usually gathers interest. You can avoid paying interest if you repay the statement balance in full each month. You should receive a monthly statement breaking down transactions and interest.

Like with personal credit cards, some business credit cards can offer additional perks like air miles or points to spend in certain shops. These types of accounts may come with a monthly or annual fee. Be sure to check the terms and conditions before signing any credit agreement.

How could a business credit card help my business?

Tracking business expenses can be time consuming. With a business credit card, all of your business expenses are in one place. That means you can glance through your statement and identify any outgoings quickly and easily.

This can be particularly helpful in managing employee expenses too. As with a personal credit card, you can ask for additional cardholders to be added to the account. That means you can offer employees a card to make their business expenses on. This helps you cut out the admin of expense forms and means your employees don’t have to wait to be reimbursed.

If you’re a new business owner, it’s unlikely you’ll have much of a credit history. Using a business credit card each month can help build your credit score. It’s important to keep up with repayments, ensuring you pay at least the minimum amount each month. If you don’t, your credit score might be negatively affected. But so long as you are making those repayments, you should see your credit score build. This can make applying for other credit, such as business loans, easier.

And like personal credit cards, any purchases made using the credit card is protected by Section 75 of the Consumer Credit Act. That means if the purchase was misrepresented or if a contract was breached you can look to claim a refund.

As with any form of credit, be sure to check what you can afford. Make sure you understand the terms and conditions and ask the credit card provider if you’re unsure of anything.

What makes my business eligible for a credit card?

Different types of business credit cards may come with different eligibility requirements. Generally speaking, in order to be eligible you’ll need to:

  • Be aged 18 or over

  • Be a UK resident

  • Have a company that’s registered in the UK

  • Pass the providers credit checks

You might find you need to look around for a credit card that’s likely to accept you. For example some providers may need your business to have a certain turnover. Or it might need to see you’ve been trading for a certain number of years.

Not all providers are the same. You’ll be able to find out if the card you want has additional requirements during the application process.

What kind of business credit cards are available?

Some business credit cards offer additional benefits. A useful benefit to one business might not be so useful to another. When looking for the right card, be sure to check what it offers and at what cost.

Here are some of the most typical types of business credit cards:

Balance transfer cards - If you’re paying interest on a business credit card then you might want to consider a balance transfer card. This allows you to transfer a balance from one card to another, usually for a fee. The fee is usually around 3%. Moving the balance to a new card that may have an interest-free period can help you pay off the debt more quickly. So if you’re paying a lot of interest then you could still save in the long run even with a fee factored in.

Purchase cards - If you’re looking for a card to make purchases - this could be a good option. Usually you’ll be able to make interest-free purchases for a set period of time. You can then repay the balance over a few months. So long as you repay the balance in full within the interest free period, you shouldn’t be charged any interest.

Rewards cards - The types of rewards that may benefit your business depends on what you do. If you fly a lot, a card that offers air miles could be a significant benefit. If you often purchase goods from a specific shop or online store, then a card offering points may be of use. You can look around for the right rewards card for your business. Be sure to check the interest rates too as the APR can often be higher on rewards cards. These types of cards may also come with a monthly or annual fee.

Business credit cards: pros and cons


  • Helps build your business’s credit score

  • Helps track spending and cuts out expenses admin

  • Potential to earn rewards

  • Typically higher credit limits than with personal credit cards


  • Potentially higher interest rates

  • Can be expensive if the balance isn’t cleared every month

  • May come with monthly or annual fees

  • Risk to credit score if you fall behind in payments

About Alex Ryde

Alex joined in 2019, bringing his expertise to a range of roles working in both the Analytics and Commercial teams. More recently he has stepped across to focus on Product, where he’s been focusing on scaling up the teams’ SME offering.

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