How to choose the right credit card for your business

Here, we explore the key things you need to know when selecting the right credit card for your business needs. 

There are many different credit card providers on the market, and choosing the right one for your business can be confusing.

Firstly, know what you’ll use it for and what kind of a lifestyle the card will be supporting.

And before you start spending, set up a direct debit to cover the balance each month because accruing interest and late payment charges on your spending will defeat the point.

How do I get a business credit card?

After you’ve filled in your personal details like name and address, online credit card providers will ask you for your:

  • Annual personal income
  • Company turnover
  • Anticipated spend levels each month

The firm will then decide whether you can have a business credit card and you’ll be offered one or not.

Below we run through some of the main types of credit card and help identify the kind of person who would most benefit from each.

How does a business benefit from credit card payments?

A credit card can be a real asset for a small business. Many businesses have a credit card because it makes certain types of spending easy for different members of the company to carry out. For example, making travel related bookings such as hotels and flights is easy to track on a credit card and it can be booked conveniently and paid off at the end of the month. To make this more secure just make sure you agree a card limit with your bank (e.g. a £500 cap which prevents large purchases being made on the card and reduces the risk of fraud).

What is the best business credit card for airline miles?

Similar to cashback cards, rewards cards can earn you points to spend on travel. In a way they are more limiting than cashback, but for some lifestyles, a rewards card may actually pay off in a bigger way. For example, if you spend a lot of money on flights and travel then you could make major savings with a rewards card that earns air miles.

Here are some credit cards that reward your spending with airline miles:

American Express Preferred Rewards Gold Credit Card

American Express Preferred Rewards Gold Credit Card

Amex offers a return flight from London to one of over 100 destinations if you spend £2,000 or more in the first three months. Other benefits include lounge access and hotel upgrades. Representative APR: 57.6 per cent

Virgin Atlantic Reward +Credit Card

Virhin Atlantic Mastercard

Virgin charge an annual fee of £160 but you get a 15,000 miles bonus with your first card purchase and a further one mile with every £1 spent on everyday purchases. APR: 63.9 per cent.

British Airways American Express Credit Card

British Airways American Express Credit Card

You get 5,000 Avios points when you spend £1,000 or more in your first three months of having the card. The credit limit is £1,200 and there is no annual fee. APR: 22.9 per cent.

What is the best business credit card for rewards?

Some credit cards give you cash back on your spending so that if they are used carefully you can earn additional cash through your credit card. As mentioned above you need to set up a direct debit to pay off the full balance every month, and with that sorted you can earn tax-free cash on every purchase you make.

It’s a good idea to shop around to make sure you have the best deal out there, and be sure that you can definitely pay off the balance each month otherwise it won’t be a good earner for you.

Types of rewards include money off fuel and spending in specific retailers.

Here are some options:

Amazon Platinum Mastercard

If you use Amazon to order in supplies for your business you might find its credit card useful. You get a £20 gift voucher when you apply and you earn 1.5 Amazon points when you spend £1 on Amazon and one point anywhere else. 1,000 points = £10 gift Amazon gift voucher. Representative APR (variable): 21.9 per cent

John Lewis / Waitrose Credit Card

John Lewis card

You receive a £10 John Lewis or Waitrose voucher when you spend £500 within the first 90 days. APR: 18.9 per cent.

Asda Cashback Card

There is no annual fee and you receive 1 per cent when you spend at Asda as well as 0.2 per cent at all other retailers. APR: 19.9 per cent

Further reading on credit cards

How to get a business credit card with bad credit

One of the common reasons to get a credit card is to build up a credit score or help your score recover after a period of bad credit. If you are looking to use your card for this purpose you are best getting one where the provider subscribes to the Lending Code, so do check this before applying for a card.

The APR on credit building cards is often quite high so it’s never more important to pay off your balance each month than on one of these cards. But if you stay on top of the payments every month a carefully chosen credit card can really help to build up your credit score meaning you can get more favourable loan rates in the future.

Here are some options if you’ve missed a payment in the last 12 months:

Aqua Classic with 0% Purchase Offer (Six Months)

Aqua Classic card
Aqua Classic 0%

The card has no annual fee and allows users to build their credit score. Representative APR: 35.9 per cent

Vanquis Classic Credit Card

Vanquis Classic Credit Card

This no-frills credit card has a representative APR: 39.9 per cent.

Tesco Bank Foundation Credit Card

Tesco Bank Foundation Card

This credit allows manageable monthly repayments. APR: 27.5 per cent

Are credit card fees tax deductible for businesses?

Yes. You can include credit card charges in your allowable expenses as well as bank and overdraft charges. However, if you’re using cash basis accounting for your business, you’ll only be able to claim up to £500 in interest and bank charges.

The ‘all in one’ credit card

Once you’ve decided what credit cards to use it might be worth using fintech provider Curve to help you organise all your credit cards into one card and one app on your smartphone.

In conclusion, a credit card used wisely can help cut costs in your business and give you benefits like cashback and air miles as well as greater control and transparency over your business spending.

Michael Somerville

Michael Somerville

Michael was senior reporter for and from 2018 to 2019.

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