How to compare business credit cards: a framework for SMEs

Looking for a credit card to ease your business’s cash flow and improve expense management? With banks and digital lenders offering various card solutions with different rates, limits and perks, it can be difficult to know which is right for you. Our business credit cards comparison guide outlines what to consider and how to judge which card best suits your needs.

This is a framework for comparing credit card solutions to help your business make an informed choice and get the most out of the solution.

What to compare when choosing a business credit card

When you compare business credit cards, don’t just look for the card provider with the lowest advertised rates or fanciest perks. You should also compare credit limits, FX fees (and other costs), cashback structure and other features, such as accounting integrations and spending controls.

For a clear business credit card comparison of UK providers, focus on your specific needs, growth stage and the rewards and benefits that really matter to you. You should also check the eligibility requirements set out by different lenders.

The factors that matter most when comparing business credit card providers

There are various factors to consider when comparing business credit card features, fees and costs. With numerous lenders to choose from, many offering similar interest rates and credit limits, you need to take a measured view of the available options.

Below, we discuss the key business credit card comparison factors and why they matter: 

APR and interest-free periods

Interest rates are important if you plan to spread the cost of business purchases rather than paying your balance in full each month. The rate you receive is essentially the cost of carrying over your balance. Where shown on lender websites, the APR (annual percentage rate) indicates the annual cost of borrowing (including the interest rate and other lender fees).

When comparing business credit cards, you may see “rates start from X%” and “representative APR variable”. The former is basically the lowest advertised rate available, while the representative APR acts like an average. The actual rate can be a lot higher and depends on your situation, credit score and the provider’s pricing structure (including annual fees on premium tiers).

Another thing to think about is interest-free periods. Be aware that this is not an introductory 0% offer. It’s simply a grace period during which you don’t incur any interest. After this, any carried balance is subject to the agreed interest rate. 

Annual and per-card fees

Credit card costs and charges don’t usually stop at interest rate, so it’s important to check for ad hoc fees or annual costs. These are not necessarily fees hidden deep in the T&Cs, but it’s worth checking what you may need to pay for certain transactions, features or benefits.

Business credit card providers have a range of card types, from free options to premium tiers to suit different business needs and sizes. These often come with annual costs or monthly fees, with higher tiers unlocking additional features or boosted cashback rates. 

Also, you may be subject to fees for foreign transactions, ATM use or balance transfers, whilst requesting additional cards for employees can come at a cost, depending on the provider.

Cashback and rewards

Getting cashback on business transactions is a common perk for credit cards offered to companies in the UK, with some providers offering higher rates than others. Meanwhile, certain cards are geared towards those with higher transaction volumes, frequent expenses and regular foreign travel. That’s why you’ll often see rewards and bonus schemes centred around air miles, hotels and airport lounge access. 

So, when comparing business credit cards, consider what rewards are most important for you. When it comes to cashback, it’s worth noting that this only bears fruit if you regularly clear your credit balance. Otherwise, the value is essentially cancelled out by the interest you pay. 

Foreign transaction (FX) fees

Do you take regular trips abroad for business and/or have international suppliers? If so, it’s worth looking for business credit cards with low-cost FX fees. If you’re not careful, these fees can add up and chip away at the cashback advantage gained from regular expenses. Some card providers, like Funding Circle, don’t charge any FX fees at all. 

Credit limit

Comparing providers’ advertised credit limits is worthwhile, but remember that these are ceilings, and each applicant will be given different credit limits within this. And it depends on your specific situation.

Some of the factors influencing credit limits include:

• Turnover

• Trading history

• Credit record/risk profile

• Cash flow

As these are changeable, you may be able to increase your credit limit over time, especially if your finances improve and you use your credit responsibly. Lenders will also periodically review your situation and can grant you an increase.

Eligibility requirements

Before applying for any business credit cards, ensure you check each provider’s eligibility requirements. This will avoid wasted time and unnecessary credit searches for cards you don’t qualify for. Each provider has their own criteria, and some are more complicated than others. This tends to include things like how long you’ve been trading and your entity structure. 

Most UK lenders offer credit cards to limited companies. Funding Circle's business credit card is open to UK-incorporated limited companies (Ltd/LLP) that have been trading for a year or more, with £30,000+ turnover.

Those just starting with minimal trading history can find qualification tricky. Learn about getting a credit card as a new business and the options available.

Spend controls and accounting integration

Getting a business credit card helps separate personal and business-related transactions and gives you a better view and control over your expenses. 

If managing expenses effectively is a priority for your business, compare the features offered by different card providers. This includes things like spend controls, limits and real-time expense tracking. Some card provider apps (including ours) make managing expenses and taxes simpler thanks to integrations with popular accounting software, such as Xero, QuickBooks and FreshBooks. 

Matching credit card benefits to how your business actually spends

With a good understanding of the main business credit card comparison factors, you need to consider which are most important for your particular business, and weight them accordingly. Then try to calculate the total costs involved for each card solution, based on your typical business activities and spending behaviours. 

Here’s a quick example of how certain credit card features and comparison factors benefit different types of businesses:

• If your business has high international expenditure, FX fees are a big factor, so look for cards with low or no FX fees.

• If you intend to use the card as a daily source of working capital, seek out good cashback schemes and cards with longer interest-free periods.

• If you need multiple employee cards, see which providers have low costs for allocating credit cards and handy expense management features.

Multiple factors should influence your decision when you compare business credit cards, as you need to understand the true value of different card solutions for your business and its priorities. 

Why rewards only pay if you clear the balance

Getting the most out of your business credit card requires sensible use and discipline in clearing your balance. For example, the interest on a carried balance can exceed the value of cashback earned within a single billing cycle. So, this is only a net positive for businesses that pay in full each month. This is why a longer grace period can work well in tandem with a card solution that has good cashback offers and rates. 

The same goes for other rewards and perks. They may seem attractive, but you still need to consider how often you’ll carry over your credit balance, and how interest will eat into these benefits. 

How does Funding Circle's business credit card compare?

As we’ve outlined in this business credit cards comparison guide, the solution that offers best value depends on numerous factors, with different card solutions suiting certain business types, credit needs and spending patterns.

At Funding Circle, we focus on keeping costs low, providing clear, simple features, and making it easy to manage your expenses. If you’re a UK-based limited company (Ltd or LLP), with at least 12 months’ trading history and a turnover of £30,000 and above, you can enjoy the following benefits:

• No annual charges

• No FX fees

• Unlimited free employee cards 

• A credit limit of up to £250,000 (depending on your situation)

• 42 days interest-free credit (grace period)

• 2% cashback for your first 6 months (up to £2000) , 1% thereafter

• Auto syncing with top accounting software

Our interest rates start at 14.9% (annually), with a 34.9% representative APR (variable).

So, check your eligibility or learn more about our Cashback business credit card. You can apply online in a matter of minutes, and we often give decisions in under an hour.

UK business credit card comparison FAQs

What's the most important factor when comparing business credit cards in the UK?

This is subjective, as the most important factor when comparing UK business credit cards depends on what matters most to you and how your business operates. There are several key factors in business credit card comparisons, including credit limits, interest rates, fees/costs, cashback and reward schemes, plus flexibility and ease of use.

Are comparison-site rankings impartial?

It depends on what sites you’re using to compare business credit cards. Comparison sites (or articles) can be handy, but it’s important to understand how the rankings are compiled. For example, some sites receive commission via affiliate links, while financial providers that rank credit solutions in comparison articles often compare their solutions favourably against competitors. You’re on safer ground using comparison sites and reputable sources like Money Saving Expert and Which?, and credit agencies like Experian and Equifax.

Using credit card comparison sites should be just one part of your selection process. Always do your own research and check card provider websites before applying, as these will have up-to-date rates, fees and eligibility details.

Can I check eligibility without affecting my credit score?

Yes. Most providers’ business credit card eligibility checkers just do a basic check of your situation against their eligibility criteria. This usually only involves a soft search, which doesn’t impact your credit score. When applying for a business credit card, lenders often use a hard search, which can affect your credit score and leave a mark on your record. But approval and ongoing credit use can lift your score (when used responsibly).

Do sole traders qualify for a business credit card?

In certain cases, yes. However, a lot of credit card companies require you to be incorporated. Eligibility varies by provider, and entity status can be a factor, so always check the criteria. Funding Circle's Cashback business credit card is only available to UK-incorporated limited companies (Ltd or LLP).

Does a low or no annual fee mean a card is the best value?

Not necessarily. While a low or no annual fee for a business credit card can reduce costs, it doesn’t guarantee the best value. This depends on its other fees, interest rates and rewards. You need to understand your likely costs vs the value of the benefits provided, based on your spending habits and business activities. 

Disclaimer

24/07/26 – 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.