Maximise Your Cash Flow: Top Business Credit Cards Reviewed

Managing cash flow and expenses is a crucial aspect of running a successful business. Business credit cards offer a convenient way to achieve this, providing numerous benefits that cater to the needs of businesses of all sizes. In this blog post, we’ll explore the different types of business credit cards and their advantages, as well as how to choose the best one for your company.

Key Takeaways

• Understand the effects of business credit cards on both personal and business credit.
• Compare different types of card to find the best match for your needs, including low-interest, rewards and travel options.
• Manage employee expenses with a centralised account access & customisable spending limits.

Understanding Business Credit Cards

Business credit cards are specifically designed to help businesses manage their cash flow, track expenses, and build credit history. They offer higher spending limits and rewards tailored to the needs of small and medium-sized businesses, as well as large companies. Utilizing a business credit card allows business owners the convenience of making purchases, managing expenses, and securing a business loan when necessary.

Business credit cards impact not just the business’s credit history but also the main account holder’s personal credit score. Consequently, understanding how a business credit card affect both personal and business credit profiles is crucial for business owners. They must select a suitable business credit card and manage it responsibly to uphold a robust personal and business credit profile.

Types of Business Credit Cards

There are various types of credit cards designed to cater to different needs, such as personal credit cards for individual use and business credit cards for corporate expenses. Business credit cards tend to offer tailored solutions for specific financial requirements, such as low-interest cards for large purchases, rewards cards for high-spending businesses, and travel cards for frequent business travelers.

In the subsequent sections, we will examine each of these categories and their distinct benefits.

Low-Interest Business Cards

Low-interest business cards offer lower interest rates or 0% introductory rates, making them ideal for managing cash flow and minimising the business credit card’s affect on overall financial health. For example, the Business Credit Card from Metro Bank offers a low-interest rate, no annual fees, and up to 56 days interest-free on purchases when the balance is paid in full. The Capital-on-tap business credit card also provides competitive APR as low as 15.5%, with no annual, ATM, or foreign exchange fees.

Paying off the debt before the interest free period ends is necessary to avoid elevated interest rates after the initial low or 0% rate. This strategy allows businesses to reap the benefits of low-interest business cards while evading unwanted interest charges.

Rewards Business Cards

Rewards business cards provide cashback, points, or other perks for business spending, making them an ideal choice for businesses that pay their balance in full each month. For instance, the Business Plus credit card offers a minimum cashback rate of 0.5% on all purchases, with higher rates on eligible fuel, accommodation, and trade or business suppliers. Capital on Tap’s business credit card also offers unlimited 1% cashback on card spending, including bills, operating costs, and general expenses. By utilising a business rewards program like these, companies can maximise their business credit benefits.

These cards are particularly beneficial for businesses that regularly make significant purchases with their credit card and clear the balance monthly. This practice enables businesses to optimise the rewards they earn while reducing interest charges and fees.

Travel Business Cards

Travel business cards offer benefits like no foreign transaction fees and travel rewards, making them suitable for businesses with frequent international travel needs. Some popular travel business cards include the Ink Business Preferred® Credit Card, the American Express® Business Platinum Card, and the Barclays Premium Plus Business Credit Card. To determine the best business credit card for your specific needs, it’s essential to compare their features and benefits.

Being cognisant of potential extra charges like ATM fees is necessary when utilising travel business cards. Selecting a travel business card that aligns with your company’s travel needs allows you to reap the benefits without incurring unneeded costs.

Evaluating Business Credit Card Benefits

When evaluating business credit card benefits, it’s important to consider factors like business rewards, interest rates, and fees. Some common benefits offered by business credit cards include:

• Cashback rewards
• Travel benefits
• Expense management tools
• Fraud protection

For example, the Business Plus credit card offers cashback rewards on various purchases, while the Capital on Tap business credit card provides uncapped 1% cashback with no annual fee.

Beyond these benefits, business credit cards also provide fraud protection measures such as fraud monitoring, zero liability policies, purchase protection, enhanced security features, and fraud alerts. By comparing the benefits and features of different business credit cards, you can find the most suitable match for your business needs.

Potential Drawbacks of Business Credit Cards

While business credit cards provide many benefits, potential drawbacks should be considered. One primary concern is the interest on unpaid balances. Accumulated interest charges can be significant if your business carries a credit card balance, particularly if the card has a high annual percentage rate (APR). Hence, clearing the balance in full each month is necessary to minimize interest costs.

The usage of a business credit card might impact your personal credit score. This is a factor to be mindful of before committing. Most business credit cards necessitate a personal guarantee, meaning the main account holder bears personal responsibility for the card’s debt. Therefore, any delayed or missed payments could adversely affect your personal credit score, underscoring the importance of responsible business credit card management.

How to Apply for a Business Credit Card

Applying for a business credit card typically involves:

• Providing information about your business, such as its turnover or estimated turnover if you are a newly established business
• Lenders conducting a credit check on the business and, in some cases, a personal credit check as well
• The interest rate and credit limit you receive being based on the results of these credit checks, with those with strong credit profiles being offered more favourable interest rates and higher credit limits.

Applications for a business credit card can be submitted through various methods:

• Online
• By phone
• Through a banking app
• By visiting a branch

By submitting the necessary information and subjecting to a credit check, you can obtain a business credit card that meets your company’s financial needs, while keeping your personal credit card separate.

Separating Personal and Business Expenses

Maintaining separate credit cards for personal and business expenses offers several benefits:

• Streamlines bookkeeping
• Provides higher spending limits
• Simplifies spending tracking
• Aids in building your business credit profile
• Establishes a credit history for the business, which can be beneficial when applying for a business loan or other financing in the future.

Separating personal and business expenses has several benefits:

• Reduces the risk of mixing up transactions
• Makes it easier to manage employee expenses
• Ensures a clear financial picture
• Accurately monitors your company’s spending

One way to achieve this is by using a business credit card for business-related purchases.

Boosting Your Business Credit Profile

Punctual payments and responsible use of a business credit card can enhance your business credit profile, facilitating future financing. Regular on-time bill payments indicate financial reliability and responsibility, potentially boosting your business credit score. On the other hand, late or missed payments can drastically lower your business credit score and potentially hamper your ability to secure credit in the future.

By using a business credit card responsibly and making timely payments, you can build a strong credit profile for your business and pave the way for future financing opportunities.

Comparing Business Credit Card Providers

When comparing business credit card providers, it’s important to consider factors such as rewards, interest rates, fees, and customer reviews. Popular business credit card providers include Capital On Tap, Metro Bank, Clydesdale Bank, American Express, Juni, Allied Irish Bank, Bank of Scotland, and Barclaycard.

By evaluating the different benefits and features offered by various business credit card providers, you can find the best option for your business and ensure that you’re getting the most value from your chosen card.

Managing Employee Expenses with Business Credit Cards

Business credit cards can aid in managing employee expenses by offering centralized account access, negating the need for expense reports, and providing customizable spending limits. Issuing multiple cards for staff use enables you to monitor employee spending and ensure that they do not exceed their assigned budget.

The debt associated with a business credit card is owed by the company, not the individual employee. As a result, using business credit cards for employee expenses can help maintain a clear financial picture and ensure that employees are not incurring personal debt on behalf of the company.

Alternatives to Business Credit Cards

If a business credit card is not the right fit for your company, there are alternatives to consider when you need to borrow money. Business loans, for example, offer fixed repayments and can provide a more structured form of financing for your business. Overdraft facilities, on the other hand, provide a line of credit that allows businesses to withdraw more funds than they have available in their bank account, with interest rates charged on the amount used.

Depending on your business’s financial needs, alternatives such as business loans and overdraft facilities may provide a more suitable solution for managing cash flow and expenses.

Summary

In conclusion, business credit cards offer a convenient and efficient way to manage cash flow, track expenses, and build credit history for businesses of all sizes. By understanding the different types of business credit cards, evaluating their benefits, and comparing providers, you can find the best option for your company. Remember to use your business credit card responsibly and separate personal and business expenses to maintain a healthy credit profile and pave the way for future financing opportunities.

Frequently Asked Questions

Which bank is best for business credit card?

Based on the answers, American Express Business Cards and Barclaycard Premium Plus credit cards are the top picks for business credit cards. Both offer great features, perks, and foreign use options without any fees.

Can normal people get business credit cards?

Yes, normal people can get business credit cards, even if they don't own a business. All you need to do is list yourself as the sole proprietor in the business tax identification number section of your business card application.

Is it better to have a credit card for business?

A business credit card is a beneficial tool for managing and itemising business expenses, while also making it easier to track and file taxes. Additionally, it helps to separate personal and business financial activity, which can help protect your business from potential financial difficulties.

What is the SME stand for?

SME stands for small and medium-sized enterprises, a phrase used to refer to businesses up to a certain size which make up 99% of all businesses in the European Union.

What types of business credit cards are available?

Businesses have a variety of credit card options to choose from, including low-interest cards for larger purchases, rewards cards for frequent spenders, and travel cards for businesses on the go.

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