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7 January 2020What are the best business credit cards in the UK? Here’s our run-down of the top 16 cards for 2020, plus everything you need to know about how business credit cards work, what they cost, and what alternatives are out there.
7 January 2020Are you doing research into getting a business credit card for your company? If so, search no further – we compare the UK's main business credit card providers, with details on their top cards and representative rates, as well as the rewards they're currently offering. In the second section of this article, we’ve written up the essential details on how business credit cards work, the costs involved, and the level of protection they can offer.
Plus, we look into the alternative forms of cash financing that are worth bearing in mind when you want to grow your business.
Let's weigh up the question, who has the best business credit card? Highly-rated business credit card providers in the UK include: American Express, Bank of Scotland, Barclays, Capital On Tap, Cashplus, Clydesdale Bank, HSBC, Lloyds Bank, Metro Bank, NatWest, Royal Bank of Scotland, Santander and Yorkshire Bank. Each card has its own slightly different set of terms and features, and depending on your situation, there will be one card that suits you.
For example, for those that need help managing their cash flow, some credit card providers offer longer periods of interest-free credit on purchases, while for those who find it difficult to track their spend, there are business credit cards that provide detailed monthly spend reports. There are some cards better suited to start-ups, and others that are tailored towards small to medium enterprises or larger businesses. Some cards exist just to offer access to exclusive rewards and perks.
Here are some of the most popular, listed in alphabetic order. You can quick-jump to the business credit card in question by clicking on the provider's name in the table below.
Every care has been taken to provide accurate info on each business loan provider. They are ranked in alphabetic order. All facts and stats are correct (according to the credit card providers’ websites) as of 7th January 2020.
Business credit card provider | APR (representative) | Fee? |
---|---|---|
American Express (Gold) | N/A | £125 |
American Express (Platinum) | N/A | £595 |
Bank of Scotland | 22.40% | £32 |
Barclaycard Business (Flex) | 24.90% | £0 |
Barclaycard Business (Select) | 26.40% | £32 |
Barclaycard Business (Premium) | 36.20% | £100 |
Capital On Tap | 39.90% | £0 |
Cashplus | 29.90% | £0 |
Clydesdale Bank | 22.40% | £28 |
HSBC | 22% | £32 |
Lloyds Bank | 22.40% | £32 |
Metro Bank | 14.90% | £0 |
NatWest | 24.30% | £30 |
Royal Bank of Scotland | 24.30% | £30 |
Santander | 23.70% | £30 |
Yorkshire Bank | 22.40% | £28 |
Gold Business Card
Maximum credit: N/A – this is a charge card
Representative APR: N/A – this is a charge card
Fees: Free for the first year, then £125 a year after that
Good for: This is a charge card, so it's a good option for business owners that know they will be able to pay back the cash in full when their statement is issued. Great for those wanting to trial the rewards, while also picking up Membership Rewards points for a year, before deciding if it is worth the £125 fee.
Features
Platinum Business Card
Maximum credit: N/A – this is a charge card
Representative APR: N/A – this is a charge card
Fees: £595 a year
Good for: Business owners that know they will be able to pay in full when their statement is issued, as this is a charge card rather than a credit card. This card is also great for previous American Express cardholders (or those with Airmiles or Avios) who are looking to rack up more Membership Rewards points, as well as business owners that want a number of good perks.
Features
Business Credit Card Mastercard
Maximum credit: £10,000
Representative APR: 22.4%
Fees: £32 a year
Good for: Business owners looking for detailed monthly statements, 45 days of interest-free credit, and flexible repayment options. Great for small businesses that want their employees to also have business cards, as each card can have different card limits.
Features
Business Credit Card Mastercard
Maximum credit: Not stated (likely variable)
Minimum APR: Three-month interest free, then 24.9% variable APR
Fees: None
Good for: Start-up owners that may need to invest heavily in their first few months as a cardmember, without having to pay interest on top.
Features
Select credit card
Maximum credit: Not stated (likely variable)
Representative APR: Six-month interest free, then 26.4% variable APR
Fees: No annual charge for first year, then £32 a year
Good for: Start-up owners that may need to invest heavily within a six-month period as a cardmember, without wanting to pay interest on top. Also good for businesses with regular cash flow needs, who want a card with added protection and insurance.
Features
Premium Plus credit card
Maximum credit: Not stated (likely variable)
Representative APR: Six-month initial interest free purchase period, then 36.2% (variable)
Fees: £100 fee, £75 for each extra card
Good for: Those trading overseas, as there is cashback on travel and trade, and enhanced travel insurance, access to airport lounges and FX savings. Also good for those wanting access to collaborative work spaces in the UK from time to time.
Features
Business MasterCard
Maximum credit: Up to £50,000
Representative APR: 39.9% APR (variable)
Fees: No annual charge, but can opt-in to the On Tap Club for £249 a year.
Good for: Businesses that expect to to have a high expenditure on the card.
Features
Business Credit Card Mastercard
Maximum credit: Up to £3,000 (reviewed after 6 months)
Representative APR: 29.9% APR (variable)
Fees: No charges
Good for: Businesses that are looking for no frills, low-limit credit card, a simple online application and a product with no hidden fees.
Features
Can I get a business credit card? If you're a start-up or relatively new company that hasn't had the chance to develop a credit score yet then you might not might not be able to get a business credit card. But otherwise, taking an eligibility check with a provider could be a promising step towards acquiring a card.
Business credit card
Maximum credit: Not stated (likely variable)
Representative APR: 22.4% APR (variable)
Fees: Each card is free for the first year and £28 per year thereafter
Good for: Businesses looking for additional features such as a savings scheme and an online accountancy tool to track expenditure.
Features
Commercial Credit Card Visa
Maximum credit: Not stated (likely variable)
Representative APR: 22% APR (variable)
Fees: First year free, then £32
Good for: Businesses looking for a low-cost card that comes with additional features, such as financial reports and account reconciliation.
Features
Business Credit Card
Maximum credit: £10,000
Representative APR: 22.4% APR (variable)
Fees: £32 per card
Good for: Existing Lloyds Bank business current account holders who will be spending up to £10,000 within a 12 month period. Also available to sole traders, partners and directors.
Features
Business Credit Card
Maximum credit: Not stated (likely variable)
Representative APR: 14.9% APR (variable)
Fees: No fee
Good for: Those looking for a low interest rate credit card and free transactions in Europe
Features
Business Credit Card
Maximum credit: Not stated (likely variable)
Representative APR: 24.3% APR (variable)
Fees: No fee for first year, £30 a year thereafter, unless you spend £6,000 or more every year
Good for: Sole traders, limited companies, limited liability partnerships, partnerships, charities, clubs and societies that will spend more than £6,000 per year.
Features
Business Credit Card
Maximum credit: Not stated (likely variable)
Representative APR: 24.3% APR (variable)
Fees: No fee for first year, £30 a year thereafter unless you spend £6,000 or more every year
Good for: Sole traders, limited companies, limited liability partnerships, partnerships, charities, clubs and societies that will spend more than £6,000 per year.
Features
Business Credit Card
Maximum credit: Not stated (likely variable)
Representative APR: 23.7% APR (variable)
Fees: £30 per year, additional cards free
Good for: Businesses looking for some cashback on their purchases, as well no foreign transaction fees.
Features
Business card
Maximum credit: Not stated (likely variable)
Representative APR: 22.4% APR (variable)
Fees: Free for first year, £28 a year thereafter
Good for: Businesses that prefer to use Mastercard credit cards and are looking for free accounting tools and flexible repayment options.
Features
For more information and impartial financial advice on this subject, visit the Citizens Advice website.
A business credit card is very similar to a normal credit card, just for a business instead of a person. Business owners and nominated employees can use business credit cards to buy items or services for a company on credit, which then has to be paid back – often within 56 days – or else interest will be charged on the amount due.
Companies of all shapes and sizes can use a business credit card, and whilst an employee’s name is printed on the card, it is the business itself that is responsible for paying off the credited amount. The card acts pretty much how you would expect a personal credit card to work and there are no extra penalties for it being a business credit card; you can even use them to get additional rewards and perks, such as air miles and cash-back.
The only thing to bear in mind when applying for a business credit card is that there is a different application process and – because they’re not intended for individual use – the cards aren’t covered by the Consumer Credit Act.
Business credit cards work by allowing a business to spend money up to a pre-agreed limit, which the business then has to repay back to the credit card company. There is usually a minimum repayment needed every month, plus an interest rate added to amount due if the borrower has gone past the interest-free grace period.
Business credit cards are a useful tool for bridging small cash flow gaps, making purchases (such as buying office supplies) or keeping oversight over employee spending, as well as building your business’ credit profile.
The limit you can borrow up to is determined by how much you're approved for by the card provider, and is dependent upon a variety of factors such as your personal and business' credit history. It's worth bearing in mind that start-ups and sole traders can sometimes find it difficult to get approved for business credit cards – or may be charged a high interest rate – so be sure to shop around if you fall into one of those categories, or if you have an imperfect credit history.
If you are a business owner – listed as an active director of your company on Companies House, or as a sole trader, then you may be able to get a business credit card. Lenders will also usually look for reassurances that you’ll be able to repay the debt, for instance that you have a minimum turnover of over £2,000 a month and no unsatisfied County Court Judgements currently against you.
Many business credit cards providers allow you to have multiple cards on the same account at the same time, so that employees of your business can also use a credit card. Just remember, each card is unlikely to have its own credit limit and, instead, will probably all be subject to same the overarching credit limit for the account.
If you’re eligible, it’s fairly simple process to get a business credit card with most lenders. Simply go to your preferred lender and supply them with your business and personal details, plus why you’d like the funds.
Business details. Likely including business name, address, years trading and monthly turnover.
Personal information, such as your name, age and personal address.
Credit usage. How much credit you’d like, when you need it by, and for what reason.
They’ll then make an eligibility assessment, which – if positive – means you’ll get a business credit card. Remember, some bank business credit cards are only available if you already have an existing account open with that bank.
The average cost of business credit cards on our shortlist is £32. However, a number of cards don’t charge an annual fee for using their account, and some charge considerable more (up to £595), but also come with considerable greater rewards, such as worldwide access to 1,200 airport lounges.
It’s worth bearing in mind that that’s just the annual fee for the account. A business credit card can also cost you in the following ways:
Do you know which card is right for your business?
The perks and rewards that business credit cards can offer fall into four broad buckets: cashback, points, discounts and insurance.
There are five main reasons why a business owner should get a business credit card: building the business credit profile, separating personal and business spending, managing expenses, controlling cash flow and reaping the card’s rewards.
Yes, business credsit cards often require a personal guarantee. Credit cards offer an unsecured line of credit, meaning that the money you borrow is not secured against an asset (like property, for example).
Instead, the card agreement requires the business owner to sign a personal guarantee. This means that she or he is personally and legally liable for repaying the money borrowed.
To choose a business credit card, it’s best to weigh up what’s most important to your business. If you need to spread the cost of a purchase over several months, then a card with a lower APR is likely the most important factor to consider. If however you just want to manage expenses better, then a business credit card with added perks and cashback benefits could be better suited for you.
Likewise, if you have a lot of employees needing to expense purchases then a business credit card provider who can supply multiple cards is most useful. Whereas if you do a lot of overseas business, then a card that doesn’t charge large amounts in foreign transaction fees might win the day. Think of the benefits you need most, then find the card provider who supplies them.
Unfortunately most business credit cards do not have the same level of protection as personal credit cards, because they are not covered by Section 75 of the Consumer Credit Act (where the card provider is as responsible as the retailer or trader for the goods or services supplied to you). Your personal card usually comes with some automatic protections against fraudulent purchases, damaged goods or billing errors, but a lot of business cards usually don’t offer the same level of cover services. On the plus side, you often have a longer interest-fee period to pay off your purchases, up to 56 days with many card providers.
Business credit cards have five main disadvantages: a lower credit limit than alternative forms of finance such a business loan, annual fees, plus charges for cash advances and foreign transactions too. Finally, as touched on above, purchases are not protected under the Consumer Trade Act. In more detail:
In short, alternatives to a business credit card include unsecured business loans, business overdrafts, merchant cash advances, and asset finance.
In more detail, if you’re planning to get a business credit card, it’s worth considering which other finance options might also be available for your business. First off, our shortlist includes both charge cards and credit cards. The difference is that charge cards don’t extend credit – so you'll need to pay off the full amount of money each month. Credit cards, however, let you to pay off expenditure over time, though you will likely be charged interest on any balance you carry forward.
Credit cards with a high limit can be very difficult to obtain from a bank, so other types of borrowing – such as a business loan or credit facility – can unlock access to larger amounts of money and alternative ways of funding your business need.
If you’d like to explore how a credit facility or business loan might be a more suitable option for your business than a credit card, why not get in touch using the contact details above, or by clicking the blue Intercom button on the bottom right of the screen. If, however, you’d like to now know about the best credit card providers in the UK, do keep reading.
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Sooraj Shah is a freelance business, technology and financial writer. He is a contributing editor of the New Statesman and a regular contributor to Forbes, specialising in cloud computing, dev-ops, the internet of things, cyber security, big data, artificial intelligence, and machine learning.
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2020