Updated: 28 August 2024
Business credit cards work similarly to personal cards but are designed specifically for company expenses. They let you borrow money for business costs and pay it back later, often with rewards for typical business spending. While they share some features with personal cards, business credit cards usually offer higher limits and perks tailored to entrepreneurs.
Here’s what you need to know about how they function and whether one might benefit your company.
A business credit card is a revolving line of credit designed specifically for company expenses. It allows you to make purchases and pay them off over time, giving you flexibility in managing your cash flow.
While you can technically use a personal card for business costs, credit card issuers offer products tailored to business owners’ needs. These tend to come with higher credit limits and features, such as making it easier to track business spending and potential tax deductions.
Business credit cards function much like personal cards:
So, what can you expect when using a business credit card? From understanding credit limits to the fees involved, here’s what you need to know:
Is it worth getting a business credit card? The answer ultimately depends on your type of business and finance needs, but there are several benefits to owning one.
Using a dedicated business card makes it much easier to track company spending and simplifies your accounting and tax preparation.
Regular use and timely payments can help establish and improve your business credit profile, potentially leading to better financing options in the future.
Business credit cards can help smooth out irregular income and expenses. That often means you get a buffer when waiting on customer payments.
Many UK business credit cards offer substantial rewards for common business expenses, which can add up to significant savings over time. Take Funding Circle’s Cashback card, for example. It offers an unbeatable 2% cashback on every payment for the first six months (or £2,000 cashback, whichever comes first), followed by 1% cashback on everything you spend thereafter.
Many business credit cards offer flexible payment options, so you can manage your cash flow more effectively. At Funding Circle, we go a step further with FlexiPay. It’s a flexible line of credit that lets you make business payments in a range of ways, including bills, expenses or direct transfer. Then choose how you repay over 1, 3, 6, 9 or 12 months, giving you even more control over your business finances.
It’s only fair to look at potential considerations as well as the benefits when it comes to using a business credit card.
Each lender has its own set of criteria, so it ultimately depends on who you choose to get a business credit card with. As a rule of thumb, most lenders tend to look at:
For Funding Circle eligibility, we ask you’re
Already have FlexiPay? Our Cashback card is not yet available for existing customers, we’ll be in touch as soon as this is available to you.
Again, this comes down to the lender, but you typically need to provide:
Many UK card issuers offer quick online applications with fast decisions. Check out Funding Circle’s application process for Cashback and FlexiPay.
There are many different types of business credit cards on the market, catering to the unique demands of business owners. Some of the most popular include:
The primary goal with a business credit card is to manage it well. Therefore, it’s worth considering the following when it comes to using your business credit card responsibly.
Learn more about avoiding potential business credit card mistakes
Business credit cards can be valuable for companies, offering flexibility, rewards and easier expense tracking all in one go. Understanding how they work and using them responsibly means you can use a business credit card to support your growth should you decide that applying for one is the right choice.
28/08/24: While we want to help as much as we can, the information found here is provided solely for informational purposes and should not be considered financial or legal advice. To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, the information contained here. If you have any questions, please speak to your professional adviser or seek independent legal advice.
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