Business
12 min read

Finding the Best Company Credit Cards for Your UK Business

Sarah Johnson · Senior Financial Advisor

Choosing the right financial tools is crucial for any business, and company credit cards are no exception. They can be a powerful asset, streamlining expenses, managing cash flow, and even providing rewards. But with so many options available in the UK market, finding the best company credit cards for your specific needs can feel overwhelming. This comprehensive guide will break down everything you need to know, from understanding the different types of cards to navigating the eligibility criteria and making the best choice for your business. We'll delve into the UK-specific landscape, considering providers and what to look for.

Why Your Business Needs a Company Credit Card

Before diving into the specifics of the best company credit cards, let’s explore why your business should consider getting one. A dedicated company credit card can offer numerous advantages:

Streamlined Expense Management

  • Separation of Personal and Business Finances: This is paramount for clear accounting. It prevents mixing personal and business spending, simplifying tax reporting and tracking business expenses accurately. According to a 2023 survey by Simply Business, 48% of small business owners admit to mixing personal and business finances, leading to accounting headaches.
  • Centralized Spending: Company cards provide a clear overview of all business-related spending in one place. This eliminates the need for employee expense claims and tedious reimbursement processes, saving time and reducing administrative burden.
  • Detailed Spending Reports: Most card providers offer detailed online portals and reporting tools, allowing you to track spending by employee, category, and time period. This offers valuable insights into your business’s expenditure patterns.

Improved Cash Flow

  • Short-Term Credit: Company credit cards provide a short-term credit line, which can be helpful for managing cash flow fluctuations. You can make purchases when needed and pay them back later within the credit period.
  • Access to Funds for Unexpected Expenses: Unexpected business expenses inevitably arise. A company credit card gives you access to funds when you need them most.
  • Capital Investment Flexibility: Cards can enable businesses to invest in crucial resources like software or equipment, even when immediate cash isn't readily available.

Potential Rewards and Benefits

  • Cashback, Points, and Miles: Many best company credit cards offer rewards programs, including cashback, points that can be redeemed for travel or merchandise, or frequent flyer miles. These rewards can help offset business expenses or provide additional benefits.
  • Travel Benefits: Some cards offer travel insurance, access to airport lounges, and other travel-related perks, which can be advantageous for businesses that involve frequent travel.
  • Purchase Protection: Many providers offer purchase protection and extended warranty coverage on eligible purchases, providing an extra layer of security.

Types of Company Credit Cards

The world of company credit cards is diverse, with options catering to different business sizes and needs. Here’s a rundown of the most common types in the UK:

Standard Business Credit Cards

These are the most common type of company credit cards. They typically offer:

  • A credit limit based on your business’s credit history and financial performance.
  • A standard APR (Annual Percentage Rate) that applies if you don't pay off your balance in full each month.
  • Rewards programs like cashback, points, or miles.
  • Basic expense management tools.
  • Example Provider: Barclaycard Business, HSBC Business Credit Card.

Charge Cards

Charge cards require you to pay off your entire balance in full each month. They typically don’t have a spending limit, but rather a "no pre-set spending limit" that fluctuates based on your spending habits.

  • No interest charges if the balance is cleared each month.
  • Expense tracking features.
  • Potentially higher annual fees.
  • Rewards programs are often more generous than standard credit cards.
  • Example Provider: American Express Business Gold Card or The American Express Business Platinum Card

Low APR Credit Cards

These cards are designed for businesses that anticipate carrying a balance. They usually have a lower APR than standard credit cards.

  • Lower interest rates can save money if a balance is carried from month to month.
  • May have limited rewards.
  • Higher eligibility criteria in some cases.
  • Example Provider: Santander Business Credit Card may have lower introductory APRs

Rewards-Based Credit Cards

These cards focus on providing rewards for your spending.

  • Higher rewards rates than standard cards.
  • May have higher annual fees.
  • The type of reward (cashback, points, travel benefits) can vary.
  • Example Provider: Capital On Tap Business Credit Card offers a strong points reward system.

Purchasing Cards

These cards are typically designed for larger organizations with complex spending needs.

  • More detailed spending control with restrictions on spending categories and individual employees.
  • Enhanced reporting and analytics.
  • Often used for specific purposes, such as procurement.

Key Considerations When Choosing the Best Company Credit Cards

Choosing the best company credit cards requires careful evaluation of your business’s specific requirements. Here's a breakdown of key factors to consider:

Interest Rates (APR)

The Annual Percentage Rate (APR) is the annual cost of borrowing money. If you expect to carry a balance, prioritize a card with a lower APR. While charge cards do not have interest as you need to pay the balance in full each month, it's vital to know the associated fees that might be incurred with late payments. A high APR can quickly negate any potential rewards you earn. Currently, the UK average credit card interest rate sits at around 21% according to the Bank of England.

Fees

  • Annual fees: Some best company credit cards have annual fees, while others do not. Consider if the benefits outweigh the cost. High annual fees, especially if the business doesn't fully leverage the benefits, can eat into the savings.
  • Foreign transaction fees: If your business makes overseas purchases, be mindful of these fees. Look for cards that either have low or no foreign transaction fees. Typically these are around 2.99% of the transaction.
  • Late payment fees: These can add up quickly if you are not paying your full balance on time, leading to further debt accumulation.
  • Cash advance fees: If you withdraw cash from your credit card, you’ll likely incur a cash advance fee and interest, and this interest will generally be higher than the purchase rate.

Rewards Programs

  • Cashback: If you’re looking for direct savings, cashback rewards are a good option. Some cards offer flat rates or tiered cashback based on spending categories.
  • Points: Points systems can be used for travel, merchandise, gift cards, and more. Evaluate how easily you can redeem points and if it aligns with your business needs.
  • Travel benefits: If your business involves travel, look for cards that offer travel insurance, airport lounge access, and other travel perks.

Credit Limits

Consider how much credit your business needs. Make sure the card's credit limit is sufficient to cover your monthly expenses without causing over-limit penalties. However, it's crucial to understand that over-reliance on credit can lead to financial trouble.

Expense Management Tools

  • Online dashboards: A user-friendly online portal that allows you to monitor spending, download statements, and manage employee cards efficiently is crucial.
  • Accounting software integration: Some cards integrate with accounting software (like Xero or QuickBooks), further streamlining your financial management.
  • Spending controls: If you have multiple employees using the card, look for features that allow you to set individual spending limits and restrictions.

Additional Perks and Benefits

  • Purchase protection: This feature protects your business against theft, accidental damage, or loss of items purchased with the card.
  • Extended warranty: Extends the warranty period on eligible purchases.
  • Fraud protection: Provides security against fraudulent activity.
  • Travel insurance: Offers insurance coverage for travel-related incidents, like trip cancellations or medical emergencies.

Comparing UK Company Credit Card Providers

The UK market offers a diverse range of company credit card providers. Here are some of the most prominent:

Major Bank Providers

  • Barclaycard: Offers a range of business credit cards with different features and rewards, catering to various business needs. They often have introductory offers and flexible repayment options. They have dedicated support teams for business clients.
  • HSBC: Provides business credit cards with a focus on comprehensive spending management tools, with business banking integration. They offer good options for businesses with large employee groups needing card access.
  • NatWest: Offers business credit cards with rewards, expense management features, and integration with their banking services. Their cards often have travel and purchase protection perks.
  • Lloyds Bank: Provides straightforward business credit card options with cashback and purchase protection, suitable for small businesses. They are typically seen as more accessible with regards to eligibility criteria.

Fintech Providers

  • Capital On Tap: Specializes in business credit cards for SMEs and offers a strong points-based rewards program with access to digital account management. Often has streamlined application process and tech-forward features.
  • Tide: Offers a business bank account with an integrated credit card, ideal for startups and small businesses. A good choice for businesses that prefer digital banking and financial management.
  • Airwallex: Offers a global business card, great for international transactions and currency conversions, alongside advanced online management. Perfect for businesses involved in cross-border sales.

American Express

  • American Express Business Cards (Gold, Platinum): These cards offer premium rewards and benefits, ideal for companies with high spending. These are charge cards and require you to pay off the balance in full every month and therefore have higher requirements. Their benefits include travel and purchase protection and concierge services.

Credit Score Requirements and Eligibility

Getting approved for the best company credit cards depends largely on your business’s credit score and overall financial health.

Credit Score

  • Importance of a Good Credit Score: A strong business credit score is vital for securing the best rates and credit limits. Your business credit score reflects its ability to manage debt responsibly. In the UK this is typically managed by the major credit reference agencies such as Experian, Equifax, and TransUnion.
  • Improving Your Credit Score: If your business has a poor credit score, consider taking steps to improve it. This could involve paying off existing debts, making payments on time, and avoiding applying for too much credit at once. A credit report is a great place to start to understand where you can make improvements.
  • Factors Affecting Your Score: Your business’s credit score is influenced by its payment history, existing debts, credit utilization, and the age of your credit accounts.

Eligibility Criteria

  • Business Type: Different providers may have different requirements for businesses based on their legal structure (e.g., sole trader, limited company). Some may require that the company be registered at companies house or have been trading for a certain amount of time.
  • Financial Stability: You will need to provide information about your business’s income, revenue, and expenses. Financial stability and a healthy cash flow are crucial for approval.
  • Trading History: Many providers will require a minimum trading history (often a year or more) before they'll consider you for a business credit card. If you are a new business this may restrict your initial options.
  • Personal Guarantee: In some cases, particularly with smaller businesses, you may be required to provide a personal guarantee. This means you will be personally liable for the debt if your business is unable to pay it.
  • Age of Applicant: Individuals applying for business credit cards may need to be 18 or over.

Tips for Securing Approval

  • Gather Your Financial Information: Prepare your business's financial statements, business bank statements, and other required documents before applying.
  • Check Your Credit Score: Review your business’s credit report and address any errors or issues.
  • Compare Offers Carefully: Don't apply for multiple cards simultaneously. Multiple applications can lower your credit score.
  • Understand the Terms and Conditions: Read the fine print carefully before applying for any business credit card.

Staying Safe with Your Company Credit Card

Security is crucial when using business credit cards. Here are some tips for staying safe:

Protecting Your Card

  • Treat Your Business Credit Card Like Cash: Keep your card secure and don’t share your card details with anyone who does not need it.
  • Enable Security Alerts: Most card providers offer fraud alerts that can notify you of any suspicious activity.
  • Monitor Your Spending Regularly: Check your online statements regularly for any unauthorized transactions.
  • Use Strong Passwords: Use strong, unique passwords for your online accounts.
  • Secure Your Devices: Protect your devices from malware and viruses.
  • Report Lost or Stolen Cards Immediately: If you lose your card or believe it has been stolen, notify your card provider immediately.

Preventing Fraud

  • Educate Your Employees: If employees have access to the business card, ensure they’re aware of fraud prevention techniques.
  • Implement Spending Controls: Utilize card provider tools to set spending limits and restrictions for each employee.
  • Be Aware of Phishing Scams: Be wary of emails, texts, or phone calls asking for your personal or credit card information.
  • Do Not Click Suspicious Links: Only log in to your provider’s website directly rather than clicking through email links.

Conclusion

Choosing the best company credit cards for your UK business is a significant financial decision. It requires careful consideration of your business's specific needs, financial health, and future goals. By thoroughly evaluating the different types of cards, providers, and features, you can select a card that will streamline your expenses, improve your cash flow, and provide valuable rewards. Remember to compare various options, review the terms and conditions, and maintain responsible credit habits. The right company credit card can be a powerful tool to help your business thrive. Take the time to research, make an informed decision and you will reap the rewards of using the best company credit cards. The information provided here should allow you to understand the UK landscape of company credit cards and equip you to make an informed decision.