Business
10 min read

The Ultimate Guide to the Best Cash Back Business Credit Cards in the UK (2023-2024)

Sarah Johnson · Senior Financial Advisor

Navigating the world of business finances can be tricky, especially for small business owners and entrepreneurs. One powerful tool that can help manage expenses and even boost your bottom line is a business credit card. And among the various types available, cash back business credit cards offer a straightforward and appealing reward: cold, hard cash back on your everyday spending. This article will delve into the realm of the best cash back business credit cards in the UK, helping you understand how they work, compare your options, and ultimately, choose the right card to fuel your business growth.

Why Choose a Cash Back Business Credit Card?

Unlike travel points or merchandise rewards, cash back offers tangible value that can directly impact your business’s finances. Think of it as a discount on every purchase you make, or as additional capital you can reinvest into your business. According to recent statistics from the Federation of Small Businesses (FSB), many small business owners struggle with cash flow, making cash back rewards all the more beneficial.

Here are some key advantages of using best cash back business credit cards:

  • Direct Financial Benefit: The cash back you earn is paid directly into your account, providing immediate financial relief.
  • Simplified Rewards: No need to track complex points systems or restrictions. Cash back is straightforward and easy to understand.
  • Flexibility: You can use the cash back however you see fit—to pay down your card balance, reinvest in marketing, or cover operational costs.
  • Budgeting Tool: Using a business credit card helps you track your business spending, making budgeting easier. The cash back acts as an additional incentive to be mindful of your outlays.
  • Boosted Cash Flow: For smaller businesses, every bit of extra cash makes a difference. The cash back rewards can offer a consistent, albeit small, increase in working capital.

Understanding How Cash Back Business Credit Cards Work

Cash Back Rates and Structures

Most cash back business credit cards offer a percentage of your spending back as cash. This is usually expressed as a percentage, for instance, 1%, 2%, or even higher for certain categories. The rate can also be tiered, where different categories of spending might earn different cash back percentages.

For example:

  • A card might offer a flat 1% cash back on all purchases.
  • Another card might offer 2% on petrol and travel, and 0.5% on other spending.
  • Some cards might have introductory offers with higher rates for a limited period.

It’s crucial to understand the specific terms and conditions of each card, paying close attention to any caps on the cash back you can earn and any applicable fees.

Redemption Options

The redemption process for your earned cash back can vary. Here are the most common methods:

  • Statement Credit: The cash back is applied as a credit to your outstanding balance, reducing your bill.
  • Direct Deposit: The cash back is directly deposited into your linked business bank account.
  • Check or Bank Transfer: You may also have the option to receive the cash back via check or bank transfer.
  • Gift Cards: Some cards allow redemption as gift cards, though this is less common for business-focused cards.

Annual Fees and Other Charges

While a high cash back rate might seem attractive, it's vital to consider any associated fees. Many cards come with an annual fee that can negate the benefits if you don't spend enough to make up for it. Other fees to be aware of include:

  • Late Payment Fees: Charged for late payments.
  • Cash Advance Fees: Charged for withdrawing cash from an ATM with your credit card.
  • Foreign Transaction Fees: Charged when you make purchases in a foreign currency.
  • Balance Transfer Fees: Charged when you transfer an existing balance from another credit card.

Always factor in these potential charges when evaluating the overall value of a cash back business credit card.

Top Cash Back Business Credit Card Providers in the UK (2023-2024)

The UK market offers a variety of best cash back business credit cards from different providers. Here are some prominent examples, keeping in mind that specific offers and availability can change over time:

American Express Business Gold Card

American Express (Amex) often features prominently when discussing business credit cards, and their Business Gold card is often considered a premium option for businesses. Although the focus of this article is on cash back, Amex tends to offer points that can be redeemed for cash or other options. While not a "pure" cash back card in most cases, it is worthy of consideration.

  • Rewards: Offers Membership Rewards points that can be redeemed for cash back, travel, or gift cards.
  • Benefits: Access to airport lounges, travel insurance, and purchase protection.
  • Annual Fee: Usually comes with an annual fee.
  • Considerations: Check the redemption rate to calculate effective cash back returns. It is more suitable for businesses with higher spending volume due to the nature of their rewards system.

Capital on Tap Business Credit Card

Capital on Tap is a popular choice for SMEs in the UK. They focus on straightforward, accessible business credit cards.

  • Rewards: Typically offers a flat rate cash back (e.g., 1%) on all spending.
  • Benefits: Often includes spending management tools and integration with accounting software.
  • Annual Fee: Often has no annual fee, making it attractive for smaller businesses.
  • Considerations: May have limitations on the amount of cash back earnable and may have restrictions on who can qualify based on business type.

Barclaycard Business Credit Cards

Barclaycard offers various business credit cards with different features, some of which have cash back offers.

  • Rewards: Varies depending on the specific card. Some offer a percentage of cashback, whilst others may offer points which can be converted to cash.
  • Benefits: Can include extended warranty, purchase protection and online management tools.
  • Annual Fee: Fees vary, so it is important to compare each offering.
  • Considerations: Often have introductory offers and tiered reward systems which are essential to evaluate in the long term.

Other Providers

Other providers to consider include:

  • HSBC Business Credit Cards: While not always purely cash back focused, they offer cards with rewards points that can be converted to cash.
  • NatWest Business Credit Cards: Similar to HSBC, some reward schemes can be leveraged to provide cash back.

Note: Always verify current offers, terms and conditions directly with the provider, as these can change.

Choosing the Right Cash Back Business Credit Card

Selecting the best cash back business credit card for your business involves a careful evaluation of your spending patterns, business goals, and the terms of different cards. Here's a practical guide:

  1. Assess Your Spending Habits:

    • Analyse where your business spends the most money. Do you frequently use fuel? Travel often? Purchase office supplies regularly?
    • Understanding your spending categories will help you identify cards with higher cash back rates in areas where you spend the most.

  2. Compare Cash Back Rates:

    • Don't only focus on the headline rate. Look at the structure. Is it a flat rate? Are there tiered levels? Are certain categories excluded?
    • Factor in any limitations, caps, or special conditions.

  3. Evaluate Fees:

    • Compare the annual fee (if any) against the anticipated cash back you can earn. Use online calculators and tools to estimate the net reward.
    • Consider other fees such as late payment, foreign transaction, and balance transfer fees.

  4. Review Additional Perks:

    • Some cards offer perks like purchase protection, travel insurance, or access to business tools. These extras could add further value.
    • Don't let these benefits distract from the core focus: the cash back reward.

  5. Research Provider Reputation:

    • Check reviews and ratings from other business users of a prospective card and service provider.
    • Look for ease of use, customer support, and how readily the company deals with disputes.

  6. Consider the Fine Print:

    • Thoroughly read the card’s terms and conditions. Look for restrictions, limitations, and any clause that may impact your long-term usage.
    • Pay attention to changes to rewards, rates and conditions as these can be changed by the provider.

Credit Score Requirements and Eligibility

Like personal credit cards, business credit cards require a good credit score for approval. Lenders will assess the creditworthiness of both your business and you personally, particularly if you're a sole trader or own a small limited company.

Key Credit Factors

  • Personal Credit Score: Your personal credit score is the most significant determinant, especially for smaller businesses.
  • Business Credit History: If your business has a credit history, it will be reviewed. This is more relevant for larger or established businesses.
  • Business Revenue and Financial Stability: Lenders want to know your business is financially sound and can repay its debts. This includes checking your business bank statements and financial reports.
  • Length of Time in Business: New businesses may face more difficulties getting approval compared to more established ones.
  • Industry Type: Some industries are seen as higher risk than others by lenders.

Improving Your Chances of Approval

If you're struggling to get approved for a best cash back business credit card, here are some tips:

  • Check Your Credit Report: Review your personal and business credit reports for errors and take steps to correct any inaccuracies. Experian, Equifax, and TransUnion are key reporting agencies in the UK.
  • Pay Bills on Time: Consistent, timely bill payment will improve your credit rating.
  • Reduce Existing Debt: If your credit utilization rate is high (e.g., you're using a large percentage of your available credit), aim to pay down existing debt.
  • Establish a Business Credit Profile: Open business banking accounts and build a financial track record for your company.
  • Apply for a Secured Card: If you're struggling to get an unsecured business card, consider a secured option that requires a deposit. This could help you build a positive credit history.

Recent UK Statistics

According to a recent report from the Office for National Statistics (ONS), approximately 6 million small and medium-sized enterprises (SMEs) exist in the UK. Furthermore, the FSB estimates that a significant number of these SMEs struggle with cash flow management. This highlights the critical importance of utilizing tools like best cash back business credit cards to help optimise business finances.

Conclusion

The best cash back business credit cards in the UK offer a straightforward and effective way to manage business expenses while earning valuable rewards. By understanding the nuances of different card offerings, evaluating your spending patterns, and diligently comparing providers, you can select a card that significantly enhances your business’ financial health. Remember to always check the latest terms and conditions, be mindful of fees, and actively manage your credit to maximise the benefits of these useful financial tools. Whether you’re a sole trader, a start-up, or a growing SME, the right cash back credit card can provide a welcome boost to your cash flow and overall business success. Always prioritise responsible spending and aim to pay off your balances in full to avoid incurring interest charges, truly making the most of these powerful business finance tools.