Business credit cards: how to use them for steady cash flow

A business credit card can be a good option to ease a cash flow squeeze, but there are many other benefits to using a business credit card. Here, we take a look.

The vast majority of UK business owners will tell you that cash flow is their main struggle, and it’s often a reason for not growing. Since cash flow is crucial to every business, unexpected bills or upfront costs for a new project can throw a business off track. A business credit card can be a good option to ease a cash flow squeeze. But there are many other benefits to using a business credit card — let’s take a look.

Spreading costs

One of the benefits of credit cards is the fact that you can spread costs easily. Unlike many other finance products, you can dip into your pre-approved credit as and when needed without having to apply for finance every time you need some extra cash. This way you can pay unexpected bills or quickly replace broken office equipment, for example.

However, spreading the costs over several months can quickly become expensive when interest adds up month after month. It’s better to use a credit card’s grace period, which is usually interest-free for 2-4 weeks. Some credit cards may offer an interest-free period of up to eight weeks, which could be a useful tool for your business to manage expenses.

Simplify expenses

Business credit cards can also allow you to simplify your expenses. You can keep track of your expenses and several cards can be issued to the same business. This means a number of managers will be able to use the card for business purposes, all in one account that you can manage.

Some providers will give you the ability to set different limits for different users too, so you can have quite a lot of control over who can spend what without needing much manual intervention.

Get rewarded

Depending on your business credit card provider, there may be some benefits to using your credit card for business expenses. When choosing a business credit card with rewards, it makes sense to narrow down what kind of rewards are most useful to your business.

For example, if you’re a frequent traveller, you may want to choose a credit card with travel rewards such as air miles. This way you’ll save money on future flights.

If you prefer to get money off products that could be useful for your office, for example, a credit card with a shopping point scheme would make sense. Essentially, you’ll earn a certain amount of reward points for every £1 you spend on your business credit card. Your collection of reward points can then be redeemed for various goods.

It’s worth checking what kind of products are available with different providers before deciding which one you’re going for. Some business credit card providers even offer concierge services or corporate entertainment as part of their rewards scheme. If you prefer to get some cash back for what you’ve spent on your card, you can choose a provider that offers cashback rewards. It works the same way as shopping points, but instead of products you’ll get money credited back onto your account.

Different types of credit cards for different kinds of users

Every business is different and so are their requirements. What type of business credit card would be of benefit to you depends on how your company trades. Some firms prefer a lower APR for short-term borrowing, while others may benefit from a longer interest-free period or better rewards.

Annual fees are another thing to bear in mind when choosing a business credit card. It’s worth considering the amount of annual fee in the context of your likely spending. Most credit cards with reward schemes come with an annual fee, so you should do the maths and see if you’ll able to break even within a year. Let’s say your card gives you 0.5% cashback, but your yearly fee is £36 — it’s only a net positive after you’ve spent more than £7,200.


Business credit cards are usually more expensive than other funding options when it comes to borrowing. If your main purpose is borrowing money, a business credit card could actually restrain your cash flow rather than stabilising it.

A good alternative to a business credit card are revolving credit facilities that work similarly to a business overdraft. If you’re not sure which product to choose, our Business Finance specialists can help you find the most suitable option for your situation.

Conrad Ford is founder and CEO of Funding Options, the online marketplace for businesses finance. Funding Options is helping the small walk tall. Funding Options helps businesses find the right funding for their situation — whether they want to grow, they’re fighting for survival, or simply need to pay a tax bill. @FundingOptions

Conrad Ford

Conrad Ford

Conrad Ford is founder and CEO of Funding Options, an online marketplace for UK business finance.

Related Topics

Credit cards