Best no-fee business credit cards for UK businesses

A no-fee business credit card helps keep your costs low. Discover the options available and alternative ways to fund your business finance needs.

July 1, 2025
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A business credit card can be a sensible first step for building up a credit profile and improving your company’s cash flow management. But are there really business credit cards with no annual fee? And what’s the best no-fee business credit card?

Let’s take a look at how credit cards for small businesses work, and why having no annual fee is a distinct advantage when you’re starting out as a new business.

What is a no-fee business credit card and how does it work?

A no-fee business credit card is a card that offers no annual maintenance fee for holding the card. These no-fee cards work just like a regular business credit card: 

  • You use your credit to pay for business expenses and travel costs etc. and then repay these costs at the end of the month.
  • Cards offer flexible payment terms, with some requiring you to pay off the whole balance at month-end, and others allowing you to make minimum payments against this balance.
  • Some cards have expense management tools, so you can track what you’re spending money on, making it easier to manage expenses.
  • Some cards also give you access to rewards, such as membership points against spending at certain suppliers, or points against your travel costs.

Why is having no annual fee an advantage? When the business credit card has no annual fee, this reduces your fixed overheads – something that’s particularly helpful when you’re a startup or smaller businesses with limited cash flow.

Be careful, though. It’s important to watch out for other charges, such as late-payment fees, interest on balance and charges for foreign currency purchases.

Are there truly no-fee business credit cards?

Yes, you can get a business credit without any annual fees. But it’s important to check if the ‘no fee’ benefit is permanent, or just a promotional offer.

Some banks will offer business credit cards that waive the fee for the first 12 months only. After the first year, you’ll then need to pay an annual fee to use the card.

Look out for other ad-hoc fees too. You may be charged for foreign transactions, cash advances and late payments, even if there’s no annual fee for the card.

Best no-fee business credit cards in the UK

If you’re looking for a business credit card with no annual fee, there are plenty of no-fee credit cards to choose from in the current UK market.

The card that’s best for your business will be defined by the specific needs of the company. But there are some stand-out no-fee business credit cards to consider. We’ve picked three different credit cards to demonstrate the features to look for when reviewing your credit card options.

Note: Information accurate as of 01/07/25.

Barclaycard Select Cashback Business Credit Card

The Barclaycard Select Cashback Business Credit Card is a no-fee business credit card from one of the world’s biggest credit card providers. Unlike cards from some of the Big Four banks, there’s no annual fee for the entire life of the card. This contrasts with the ‘free for the first 12 months’ offers that are common with many banks.

Here’s a rundown of the main features:

  • No annual fee: No annual fee for the life of the card
  • Interest-free purchase periods: 56 days’ interest-free credit on all business purchases
  • Expense tracking or integration tools: Offers a Freshbooks accounting plan
  • Rewards or cashback options: 1% cashback uncapped on all your business spend when you spend over £2,000 per statement month. Discounts and offers available with retailers and suppliers. 

Capital On Tap Business Credit Card

The Capital on Tap Business Credit Card comes from this UK-based challenger in the credit card marketplace. Founded by two startup owners who found it difficult to access credit as a growing startup, this no-fee card aims to support new businesses by extending a line of credit to manage your company’s expenditure.

Here’s a rundown of the main features:

  • No annual fee: The basic Capital on Tap card has no annual fee. However, there is a premium version with extra benefits that costs £299 p/year
  • Interest-free purchase periods: 42 days interest-free on purchases, as long as the balance is cleared in full at the end of the billing period.
  • Expense tracking or integration tools: No free tools for the no-fee card. Premium card users do get 6-months free use of Xero accounting software,
  • Rewards or cashback options: Uncapped 1% cashback on all card spending. Redeem points against your balance, for cash, or for gift cards.

Metro Bank Business Credit Card

The Metro Bank Business Credit Card is a no-frills, no-fee card that could be ideal if you just need a basic card to open up a line of credit. 

Here’s a rundown of the main features:

  • No annual fee: No annual fee for the life of the card
  • Interest-free purchase periods: Up to 56 days on purchases (when you pay your balance in full and on time)
  • Expense tracking or integration tools: No additional expenses or accounting tools are offered with the card.
  • Rewards or cashback options: there are no rewards or cashback offers with the Metro card. It does offer free foreign currency purchases for most European countries. But you’ll be charged for purchases in the rest of the world.

All three of these business credit cards offer no annual fee, but it’s worth noting that the additional features, tools and benefits vary greatly. 

It’s vital to do your homework and to look at the features, benefits and terms and conditions for the card, before you sign up for any no-fee credit card.

How to choose a business credit card with no annual fee

When choosing the best no-fee business credit card for your business, it’s important to explore the whole market, especially cards from new challenger providers.

Look for the features that add most value for you, at this stage in your business growth. And check there are no additional fees when using the card. 

Here’s a quick checklist to guide your research:

  • Look at the flexibility of the card: How flexible are things like repayment schedules, credit limits, purchase protection and additional cardholder costs?
  • Check for hidden costs: Will you be charged for foreign transaction fees, cash advance fees, or balance transfers from other cards?
  • Consider the value of rewards and cashback: Think about whether a rewards programme or cash back will benefit your business spending patterns.
  • Compare interest rates: How does the APR interest rate on your purchases compare with other cards in the market? 

Are there business credit cards with no foreign transaction fees?

If you use your no-fee business credit card to make purchases in a foreign currency, some card providers will charge you. But the good news is that there are business credit cards that offer zero foreign transaction fees, especially from the growing number of digital banks and specialist providers.

For example, the Capital on Tap Business Credit Card we mentioned above offers no foreign exchange fees with their basic no-fee business credit card. 

If you’re using overseas suppliers, or make plenty of trips abroad on business, having zero fees for foreign purchases is a major bonus. 

Always check whether the ‘no foreign transaction fees’ benefit is a permanent offer, or only available for an introductory period. And be aware that some ‘no-fees’ business credit cards do charge for foreign currency transactions.

Cashback and rewards: Maximising benefits on a no-fee business credit card

Many no-fee cards offer extensive additional benefits to card holders. Features like cashback on purchases, loyalty points when travelling, or discounts on business services and suppliers are all common bonuses.

Always check what extra features your card offers and make sure you’re proactive about maximising the potential value these offer for your business.

To get the best from your card:

  • Pay off the balance every month to avoid any interest charges: This stops your overall balance from growing and getting out of hand. It also shows credit rating agencies that you can make sensible, regular repayments. 
  • Consolidate your key business expenses onto the card: By using the card for all your travel expenses and ad-hoc operational costs, you build up a solid credit history and show that you always pay off the balance on time. 
  • Check redemption options and limitations on rewards: Make sure you’re making use of any retailer or supplier discounts within the promotional timeframes. And that you’re accruing and using any reward points you’ve earned through your everyday spending. This can help to lower costs and reduce expenditure. 

No annual fee vs low-interest business credit cards: Which is better?

No-fee business credit cards tend to offer interest-free periods of between 42 to 56 days. During this period, if you pay off the accrued balance in full, you pay no interest. But the interest rates on credit cards with no annual fees do tend to be higher – this is how the banks and credit providers make money from offering the cards. 

However, there are business credit cards with annual fees that offer lower interest rates on your balance. For example, the Lloyds Bank Business Credit Card requires a fee of £32 per cardholder after the first 12 months, but offers a low interest rate of 14.9% on purchases you make (accurate as of 01/07/25)

In some circumstances, this can be a good way to spread the debt and manage your credit balance more sensibly. 

So, how do the two kinds of credit cards compare?

  • No annual fee cards: a no-fee card has lower ongoing costs, as long as your overall balance is paid off monthly, in full.
  • Low-interest cards: a low-interest business credit card is better if your business wants to carry a balance over time, paying reduced interest on the balance. 

So, which type of card is best? 

Your decision needs to factor in your cash flow style and how long you want to have this debt on the books. 

  • If you want to pay off the balance on the card quickly, without interest, a no-fee card is ideal. 
  • If you need to manage your business debt affordably, over a longer period, then a low-interest card is the right option for you.

How to qualify for a no-fee business credit card as a small business

Not all businesses will be eligible for a no-fee business credit card. Banks and credit providers will want to see evidence that your company is creditworthy and a viable business before they will extend a line of credit. 

Requirements typically include having :

  • A business bank account with the same bank
  • Good credit history, both for the company and your own personal credit history
  • Proof of trading (sometimes 6-12 months minimum)

Can startups qualify for a no-fee business credit card?

Some lenders will offer business credit cards to startups based on personal creditworthiness, if the startup has little or no credit profile. But this will require you having a solid personal credit history and no red flags like previous insolvencies etc.

Other providers may require a minimum trading period or projected revenue statements, so the bank can fully understand your ability to make repayments.

Digital-first providers, like Capital on Tap, are typically more startup-friendly.

Common mistakes to avoid when using a no-fee business credit card

Once you’ve been approved for a business credit card with no annual fees, it’s a good idea to be sensible with your credit usage and to manage the card professionally.

Common errors from new card users can include:

  • Carrying high balances and accruing costly interest. This quickly increases your costs and can start to affect cash flow.
  • Assuming no fee = no other charges. Watch out for hidden costs like fees for cash withdrawals or purchases made in foreign currencies.
  • Not separating business and personal expenses clearly for accounting purposes – always use the card purely for company expenses.
  • Ignoring the impact of late payments on the company’s business credit score. A poor credit score can affect your ability to borrow in the future.

Do no-fee business credit cards have foreign transaction fees?

Although no-fee cards don’t charge an annual fee, many do still charge foreign transaction fees. These fees can typically be 2–3% of the purchase cost, so it’s important to limit your foreign purchases if transaction fees will be charged.

Some specialist cards offer both no annual fee and no foreign transaction fees — but they’re less common. For example, the no-fee Metro Bank Business Credit Card offers free foreign transactions for purchases made in most European countries – but will charge 2.99% on transactions made in the rest of the world. 

Business credit card vs short term loan

No-fee business credit cards are a great way to manage your day-to-day business expenses, especially when spending is frequent but relatively small. However, there will be occasions where you need specific funding to boost your working capital.

Short-term business loans are a good way to access larger lump sums, especially for one-off costs like stock purchases, equipment upgrades or bridging cash-flow gaps.

Knowing the distinction between a business credit card and a small business loan helps you decide which is better suited to your current business needs. 

Let’s look at the key differences: 

  1. Credit limit vs lump sum: With a business credit card, you can only spend up to an agreed credit limit. A small business loan will offer a lump sum that’s agreed as part of your loan agreement and repayment terms and conditions. 
  2. Repayment flexibility vs set term: A credit card will allow you to pay off your credit balance in monthly installments, as long as a minimum payment is made. A business loan must be repaid with set pre-agreed amounts that can’t be changed or defaulted on. 
  3. Interest on balance vs fixed repayment costs: When using a card, the interest is charged on the current balance (which can go up and down). With a loan, the interest will be charged on the remainder of the loan, with predictable fixed repayment costs being made each month.

For larger funding needs, or when cash flow timing matters, a short-term loan might offer more predictable repayments and lower total costs.

iwoca: the flexible way to extend your working capital

At iwoca, we know the importance of fast, straightforward access to working capital, especially when your business is at a pivotal point in its growth cycle.

Our Flexi-Loans make it easy to take out a short-term loan, whether you need funding for expansion, or capital to reinvest in new equipment. 

With a Flexi-Loan, you can:

  • Borrow from £1,000 to £1 million
  • Pay it back within 1 day to five years
  • Only pay interest on the funds you draw down

Apply for an iwoca Flexi-Loan today

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