Business credit cards offer small business owners a revolving credit line and a monthly credit limit that can be used to pay for any business expenses and money withdrawals when and where needed. They are also a convenient solution when a business needs to quickly access additional funds for short-term needs and increase its purchasing power.

For small businesses, where managing cash flow may be tricky, having the ability to cover expenses and defer payment for up to 56 days can also be a very useful way of keeping the company bank balance looking healthy.

However, it’s worth remembering that credit cards come with a cost - if the balance is not repaid in full each billing cycle, interest charges will be applied. They may also come with an annual fee.

 

How is a business credit card different to a personal credit card?

Business credit cards, unlike personal credit cards, are in your company’s name and are designed specifically for business-related expenses like equipment, office supplies or business travel.

The credit limit and amount you can borrow is typically a lot higher since it is based on the company’s annual turnover and spending, rather than an individual’s which is likely to be lower.

Business credit cards often come with additional protection, benefits and access to various reward programs tailored for business owners.

Read more about the differences between business and personal credit cards here.

 

What are the benefits of credit cards for small businesses? 

  • Easier qualification

    Business credit cards are usually easier to qualify for compared to traditional lines of credit or bank loans, especially if you are a small business without a well-established credit history.
  • Build your business credit

    If you use your business credit card responsibly i.e. pay your balance on time each billing cycle and don’t go over your credit limit (which may result in additional fees), business credit cards can be a great way to build your business credit so you can have better borrowing terms in future.
  • Organise expenses

    A considerable advantage of using a business credit card is that you can keep your personal finances separate to your business finances which makes it easier to manage and submit your tax return to the HMRC.
  • Flexibility

    Business credit cards allow you to quickly access additional funds to cover any extra business expenses that may incur. They can also offer a financial cushion when sales are slow and the business is short on cash.
  • Incentives & rewards

    Business credit cards often come with additional benefits and access to reward programs designed specifically for business owners. These may include introductory offers, discounts and bonus points that can be earned on all card spend and redeemed for travel-related discounts, upgrades and car rentals.
  • Supplementary cards

    You can often request, at no extra cost, additional credit cards for your partners and employees, which makes managing business expenses easier across the organisation. 

 

Who can get a business credit card?

To apply for a business credit card, you need to be a business owner or a sole trader. The eligibility criteria will be different for every provider, but the usual required minimum is: 

  • You need to be over 18 years old;
  • The business needs to be UK based; 
  • There may be a minimum turnover required to qualify;
  • Some credit cards may be limited to certain company types. 

 

How to apply for a business credit card?

The application process will be different for every provider, but you can usually apply online, by phone or by visiting a branch. 

You will be asked to provide several details so it’s worth having the required information to hand before you start your application. These may include: 

  • Your company's name, address and telephone number;
  • The type of business e.g. limited company, sole trader;
  • The sector your business operates in e.g. transport;
  • The number of employees;
  • Years of trading;
  • What countries you trade with (there may be some restrictions if your business trades with Syria, North Korea, Sudan, Iran or Cuba);
  • What you need the card for e.g. cash flow, purchases;
  • Your desired credit limit on the card.

You may also be asked to provide your personal details including: 

  • Full name; 
  • Date of birth;
  • Current address and your address history; 
  • Contact details including phone and email address. 

 

How many credit cards should a business have?

Whilst you can have multiple business credit cards in circulation, you should typically only use a few credit card providers.

Having a few providers can provide additional benefits and a higher credit limit overall, however, it will usually be easier to reconcile your invoices and expenditure using just one account and provider. Equally, with access to too much credit, some providers may be turned off if you already have multiple credit card accounts open.

By limiting your number of accounts, you will avoid racking up debt and being charged monthly fees for cards that you do not use. 

 

How much do business credit cards cost?

The usual cost involved with business credit cards include:

  • Any annual fees;
  • Interest charges if you do not pay your balance in full every billing cycle; 
  • Additional charges for cash withdrawals or if you go over your credit limit.

A lot of business credit card providers offer standard and premium credit cards where the standard card usually comes with no annual fee.

Premium credit cards, despite having an annual fee attached to them, usually offer access to attractive reward programs so they may be worth the additional investment. It's always worth looking out for the type of rewards you can get and other introductory offers like interest-free period and sign up bonuses. 

Read more about reward credit cards here

 

What happens if I do not pay my business credit card? 

If you do not pay your credit card bill on time every month, you will be charged interest which may impact your credit score and harm your ability to access future credit. You can usually make a minimum payment of 10% each month and this will prevent your account from going into arrears. However, any outstanding balance will be rolled onto the next month.

 

Small business credit cards from Capital on Tap 

Capital on Tap credit cards are designed specifically for small business owners. They provide a credit facility of up to £50,000 which can be used for everyday business costs and expenses.

The cards come with several benefits to help business owners manage their finances. These include easy-to-use online portal allowing customers to categorise their transactions, up to 20 supplementary cards for employees and partners and integration with accounting software providers including Xero, KashFlow, QuickBooks, FreshAgent. You can also opt into our Rewards programme and earn points on all card spend which can be redeemed for Avios or cashback.

 

How can I apply for the Capital on Tap credit card? 

To apply for Capital on Tap credit card, you need to fill in a short application form providing your business details. The application will be processed immediately, and you should get a decision within a few seconds. Once approved, funds will be available on your account the very same day.

To check if you are eligible for Capital on Tap credit card, click here.