If you run your own business, using a business credit card can be a flexible way to manage your cash flow.
There are a number of different business credit cards to choose from, all with different benefits and perks. But if you’re after a basic, no frills option, here’s what you need to know.
What is a basic business credit card?
A basic business credit card is a straightforward business credit card that charges no annual fee, has a low rate of interest and offers a decent credit limit. A basic business credit card could suit you if you’re looking for a fuss-free option that can help you manage your cash flow and keep your business finances separate from your personal accounts.
Business credit cards work in a similar way to personal credit cards, but the account will be in your company name, not your own. Business credit cards give you access to funds up to a specified limit, and enable you to spend what you need when you need to, and then pay back what you owe in flexible monthly repayments.
As with personal credit cards, you must pay at least the minimum payment each month to avoid late payment charges. Paying off the balance in full will ensure you don’t get charged interest – unless your card comes with a 0% promotional offer.
Eligibility requirements
To be eligible for a basic business credit card, you’ll need to be over the age of 18 and a UK resident. Some lenders will also require your business to have a minimum annual turnover.
You’ll also need to have registered your business and started trading. Some credit card providers will offer different rates and credit limits depending on the size of your business and its financial strength.
If you’re approved for a basic business credit card, it should arrive within 5–10 business days. You then need to activate it before using it.
Benefits of a business credit card
Some of the main benefits of a business credit card are outlined below:
Separate finances. A business credit card can help you to keep personal and company finances separate, making it easier to track expenses and prepare accounts.
Establish a credit history. If your business is just starting out, it’s unlikely to have much of a credit history. Using a credit card can help build up your business credit score, and enable you to get accepted for better deals in the future.
Manage cash flow. A business credit card gives you access to a revolving line of credit which will typically give you up to 56 days before interest is charged. Credit limits are generally much higher on business credit cards compared to personal credit cards.
Interest-free purchases. Some business credit cards charge no interest on your purchases for a few months, allowing you to spread the cost of an expensive item without paying interest. Just make sure you clear your balance before the 0% deal ends and interest kicks in.
Multiple users. You may be able to obtain additional cards for your employees at no extra cost and then set spending limits for each card, which you can track through your online account. This can help you to better manage employee expenses.
Rewards and benefits. With some business credit cards you might be able to take advantage of cashback or travel perks, for example, or enjoy fee-free spending abroad.
Drawbacks of a business credit card
Of course, there are also some downsides to using a business credit card. Even if you choose a business credit card that does not charge an annual fee, unless your card offers an introductory 0% period, you will be charged interest on any balance you do not pay off in full each month. Further fees could be charged if you don’t make your payments on time or if you exceed your credit limit.
Your business will also need a good credit history to qualify for the best deals. If it doesn’t, your application could be rejected or you might be offered a much higher interest rate and lower credit limit. Note that if you’re a new business or a sole trader, some lenders may look at your personal credit history instead to help them establish whether to let you borrow.
Example of a basic business credit card
Capital on Tap offers a standard business credit card designed for small businesses that have an annual turnover of at least £2,000 per monthper year. The card offers the following benefits and the option to upgrade to its Business Rewards plan:
Credit facility of up to £250,000
No annual fee
Up to 42 days interest-free on card purchases
Representative purchase rates of 36.19%
No foreign exchange or UK ATM charges
1%cashback on your business spending
Unlimited cards for your company
Redeem points for Avios with optional Business Rewards plan
You can find out more about the Capital on Tap business credit card in our review.
Frequently asked questions
Yes, you can. Having a business credit card can be a great way of keeping your personal and business finances separate which can make it easier when it comes to filing your annual tax return.
As with personal credit cards, the higher your credit score the more likely you are to get accepted for a business credit card and secure the best deals. If your business credit score is low, you may still get accepted for a business credit card but be aware that you’re likely to pay a higher rate of interest.
Approval for any credit card depends on your status. The representative APRs shown represent the interest rate offered to most successful applicants. Depending on your personal circumstances, the APR you're offered may be higher, or you may not be offered credit at all. Fees and rates are subject to change without notice. It's always wise to check the terms of any deal before you borrow. Most of the data in Finder's comparison tables is provided by Moneyfacts.
We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you. Most of the data in Finder's comparison tables has the source: Moneyfacts Group PLC. In other cases, Finder has sourced data directly from providers.
Rachel Wait is a freelance journalist and has been writing about personal finance for more than a decade, covering everything from insurance to mortgages. She has written for a range of personal finance websites and national newspapers, including The Observer, The Mail on Sunday, The Sun and the Evening Standard. Rachel is a keen baker in her spare time. See full bio
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