Business
12 min read

Best Cash Back Credit Cards for Business: A UK Guide for 2024

Sarah Johnson · Senior Financial Advisor

Running a business in the UK involves a constant juggling act – managing expenses, optimising cash flow, and seeking every possible advantage. One powerful tool that can significantly ease this burden is a business cash back credit card. These aren't just about spending; they're about earning rewards on your regular business purchases, effectively putting money back into your company’s coffers. But with a plethora of options available, how do you find the best cash back credit cards for business to suit your specific needs? This comprehensive guide will navigate you through the landscape of UK business credit cards, offering practical advice, comparisons, and crucial information to make the right choice for your business.

Why Choose a Business Cash Back Credit Card?

Before diving into specific cards, it's vital to understand the core benefits of opting for a cash back credit card over other options. Primarily, they offer a straightforward way to reduce business expenses. For every pound spent, a percentage is returned to your account as cashback. This money can be reinvested in your business, used for operational costs, or even withdrawn as profit. It's essentially like receiving a discount on everything you buy through the card. In today's challenging economic climate, this advantage can be crucial for smaller businesses and startups looking to maximise their resources.

Furthermore, business cash back credit cards often come with other perks beyond just cash back. Many providers offer introductory 0% periods for purchases or balance transfers, allowing you to manage cash flow more effectively in the short term. Additionally, some cards include business-specific tools like expense management dashboards and detailed reporting capabilities, which can streamline your accounting processes. The ability to track business expenses separately from personal spending is also a significant benefit, especially for sole traders and limited companies. Let's not forget the added protection that comes with using a credit card, including Section 75 protection on purchases between £100 and £30,000.

Finally, the smart use of a cash back credit card can also help you improve your business credit score, which is crucial for future loans and financing. By using the card responsibly and making timely payments, you demonstrate financial health and credibility.

Understanding the Landscape: Key Factors to Consider

Choosing the best cash back credit cards for business requires careful consideration of several factors. It’s not just about the headline cash back rate; many other aspects can significantly influence the overall value of a card.

Cash Back Rate and Caps

The cash back rate is usually expressed as a percentage, for example, 1% or 2% back on every purchase. However, pay close attention to whether this rate applies to all spending categories or if certain categories earn less. Some cards might offer higher cash back on specific types of spending (like fuel or office supplies), which could be ideal if your business spends heavily in those areas. Crucially, check for any caps on how much cash back you can earn in a given period (monthly or annually). A card with a high rate but a low cap may not be the best cash back credit card for your business if you have significant monthly expenses.

Annual Fees

While some of the best cash back credit cards for business have no annual fees, others charge them. Evaluate whether the cash back rewards you’re likely to earn will outweigh the cost of an annual fee. In some cases, a card with a fee might still be worth it if the rewards are substantial enough to make it profitable. Also consider that some cards may waive their fee for the first year.

Introductory Offers

Many business credit cards offer introductory 0% interest periods on purchases or balance transfers, or even bonus cash back after a certain spending threshold. These offers can be beneficial for businesses needing a short-term solution for managing cash flow or larger, one-off purchases. Carefully weigh these introductory perks against the long-term reward structure of the card.

Additional Perks and Features

Beyond cash back, look out for other perks such as travel insurance, airport lounge access, and access to business-related software or tools. Some cards may also offer purchase protection, extended warranties, or access to a dedicated business support line. The best cash back credit cards for business may also include features such as employee card access and the ability to track expenses across different cards.

Credit Score and Eligibility Criteria

To qualify for the best cash back credit cards for business, your business will likely need a solid credit history. Lenders look at factors like your company's credit score, length of time in operation, and annual turnover. Startups might find it more challenging to get approved for cards with high cash back rates and benefits. It’s essential to understand that different providers have different credit score requirements.

Navigating UK Providers and Their Offerings

The UK market offers a variety of business cash back credit cards from different providers, each with its own set of pros and cons. Here are some notable providers and a brief overview of their offerings, although it's vital to remember that specifics can change, so always check the current terms:

American Express (Amex)

Amex often features prominently among the best cash back credit cards for business providers. They are known for robust rewards programs and additional benefits such as travel insurance and purchase protection.

  • Example Offering: Amex Business Gold/Platinum Card: These cards often have a higher annual fee but come with generous reward programs, including cash back, points, and travel perks. They may offer cashback directly or through a points system that can be redeemed for cash credits. These are often best suited to businesses that can put significant spending through the cards. Amex also offers lower fee cards such as the Amex Business Basic card, which offers cash back, but at a lower rate.
  • Pros: High reward potential, extensive travel benefits, excellent customer service.
  • Cons: Higher annual fees, might not be accepted everywhere, particularly small local businesses.

Barclaycard

Barclaycard is another major player in the UK credit card market. They offer a range of business credit cards with varying cash back rates and additional benefits. They provide good online management tools and are widely accepted across the UK.

  • Example Offering: Barclaycard Business Cashback: This card typically offers a simple cash back structure with a percentage back on all spending. Introductory offers may also be available.
  • Pros: Easy to manage, good acceptance rate, transparent fees.
  • Cons: Cashback rates might be less competitive than some other providers.

Capital One

Capital One provides a range of business credit cards focused on simplicity and clear terms. While their cash back offerings may not be the highest, they often offer a straightforward approach and good customer support.

  • Example Offering: Capital One Business Cashback Card: This card often offers a flat cash back rate across all purchases and is popular for its relatively easy-to-understand structure.
  • Pros: Simple to use, transparent terms, good support.
  • Cons: May not offer the highest cash back rate compared to other cards, limited additional perks.

Other Providers

Smaller lenders and financial institutions also offer business credit cards with cash back options. It’s worth comparing a broad range of providers, taking into account your specific spending patterns, and always checking the most recent card terms.

A Deeper Dive into Eligibility Criteria and Credit Scores

Understanding the eligibility criteria for the best cash back credit cards for business is critical before applying. Each lender has specific requirements, but there are some common factors they look for:

Business Credit Score

A business credit score is a numerical rating that reflects your company's creditworthiness. It's based on factors like payment history, the amount of credit your business uses, how long you've had credit accounts open, and the types of credit you use.

In the UK, business credit scores are often generated by credit reference agencies such as Experian, Equifax, and Creditsafe. Your score could be based on your company's financial information as well as that of the directors, or owners.

A good business credit score is typically considered to be above 880 and these are the businesses that are most likely to be offered the best cash back credit cards for business . However a score in the 700-800 range is still seen as acceptable by many lenders. Scores below this may cause you problems when applying for a business credit card. Startups with no credit history may face difficulties securing some cards and should consider business cards aimed at newer businesses, such as the Capital One business card.

  • Key Actions to Improve Your Score:
    • Pay all bills on time.
    • Keep your credit utilization low.
    • Avoid applying for multiple credit lines at the same time.
    • Check your credit report regularly for errors and correct any issues.

Business Turnover and Time in Operation

Lenders often require businesses to meet minimum annual turnover requirements. This varies based on the card provider. Banks look at this to see whether you can afford to service debt. Startups may need to show proof of financial projections and a clear business plan to demonstrate their viability. You must also be able to show that your business has been in existence for a minimum period which may be as little as a few months, but often up to three years with larger lenders.

Company Structure

Your company’s legal structure (sole trader, partnership, limited company) also impacts eligibility. Limited companies usually require less personal information on the application as they have separate legal standing, whereas sole traders may have their personal credit history assessed more closely.

Required Documentation

When applying, lenders often ask for:

  • Company registration details
  • Proof of business address
  • Director and owner details
  • Business bank statements

Making the Right Choice: A Practical Guide

Choosing the best cash back credit card for business isn't about picking the one with the highest cash back rate. It’s about finding the card that best aligns with your specific business needs and spending habits. Here’s a practical approach:

  1. Assess Your Business Spending: Review your business expenses for the past year. Identify key spending categories (e.g., office supplies, travel, fuel, marketing) and how much you typically spend in each. This will help you determine if a card with higher rewards in specific categories would be more beneficial.

  2. Set a Realistic Budget: Determine how much credit your business needs and can comfortably repay. This is critical so you don’t get into debt that will hamper your business. Avoid overspending, which can lead to debt and impact your credit score.

  3. Compare Multiple Cards: Don't just settle for the first card you find. Compare offers from different providers, paying attention to cash back rates, annual fees, introductory offers, and other perks. Use comparison websites as a starting point but always double-check the card provider's terms and conditions.

  4. Check Small Print: Carefully read the fine print, including any caps on cash back earnings, penalty fees, and conditions for receiving bonuses. Ensure there are no hidden costs that will offset the rewards.

  5. Consider Business Needs: Select a card that fits the needs of your business. If your team needs multiple cards, select a card that offers employee cards. If you are always travelling, choose a card with travel perks and lounge access.

  6. Factor in Payment Habits: Choose a card that you can easily pay off in full each month to avoid interest charges. If you have difficulty paying off the full balance, a balance transfer card can give you some respite.

Recent Statistics and Data (2023-2024)

The UK's business credit card market is constantly evolving, with recent data highlighting a growing demand for cash back cards among small and medium-sized businesses.

  • Increased Awareness: According to recent surveys, approximately 45% of UK business owners now use a business credit card for daily operational expenses, with a further 28% stating they plan to obtain a business credit card. This is driven by an increase in awareness of the benefits of using a business credit card, especially with regard to expense management and rewards.
  • Cash Back Popularity: 60% of business owners who use credit cards indicated they prefer cash back options over travel rewards or points. This reflects the current economic climate and a desire for tangible cost savings.
  • Growing Acceptance: UK business card acceptance is high. Over 90% of businesses in the UK now accept card payments.
  • Average Spend: A recent report by a major bank shows that the average monthly business spend on credit cards for small businesses is around £2,500, with larger businesses spending much more than this. This demonstrates a clear potential for significant cash back earnings.
  • Regional Differences: Usage rates do differ across the UK, with a higher proportion of businesses in London using business cards compared to other regions.

(Please note that specific figures will vary by source and the most up-to-date research should be consulted).

Conclusion

Choosing the right business credit card is a significant step towards optimising your business finances. The best cash back credit cards for business can provide a valuable resource for reducing expenses and improving cash flow. However, it's not just about the cash back rates. Evaluate your business spending, compare different providers, understand the eligibility requirements and choose a card that aligns with your company’s unique financial circumstances and needs. By being informed and making careful decisions, a business cash back credit card can become a powerful financial tool for your business, helping you to thrive. Remember, the key to success with these cards is responsible use and diligent management. With a strategic approach, you can effectively leverage the benefits of a cash back credit card to help your business grow.