Guide to Business Credit Cards for Small Businesses

Business credit cards are the most popular form of small business finance, with 19% of SMEs using them to manage their costs and cash flow. Like a personal credit card, they let you borrow money for business costs and pay it back later, often with rewards for typical spending. While they share some features with personal cards, business credit cards come with additional benefits designed to support you and your company.

Here’s what you need to know about how they work, the best ways to use them, and whether they could be a good fit for your business.

What is a business credit card?

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 more flexibility in managing your cash flow. 

Business credit cards come with benefits designed for professional use, including the ability to separate business and personal finances, higher credit limits and building your business credit score.

How do business credit cards work?

 Business credit cards function much like personal cards:

• You’re given a credit limit based on your creditworthiness and business financials.
  
  

• You can spend up to that limit, making purchases for your business.
  
  

• Each month, you’ll receive a statement detailing your charges.
  
  

• You can choose to pay the full balance or make a minimum payment and carry the rest over.
  
  

• If you don’t pay in full, you’ll be charged interest on the remaining balance.

Can you use a personal credit card for business?

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.

Key features of UK business credit cards

While credit cards can look similar at first glance, it’s the small details that make the difference. When you’re looking through the options, here are the key credit card features you need to consider:

• Credit limits: How much capital the lender is willing to offer you – the better your financial position and credit, the higher this will be. In general, business credit cards offer much higher credit limits than personal cards due to the type of expenses businesses can make regularly.
  
  

• Interest rates: The interest rate determines how much you pay for outstanding balances. Typically range from 15% to 40% APR, depending on the card and your credit score.
  
  

• Rewards: Many cards offer cashback or points on business-related spending categories like office supplies, travel or advertising.
  
  

• Fees: Annual fees can range from £0 to £200-plus, depending on the card’s features. Some cards may include additional fees for foreign transactions. 

Note: rates and fees vary widely depending on the lender, and customers should conduct their own research to determine the right option for their business.

What are the types of business credit cards?

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:

• Cashback cards: Offer a percentage back on purchases, sometimes with higher rates in specific business categories.
  
  

• Rewards cards: Earn points that can be redeemed for travel, merchandise or statement credits.
  
  

• 0% purchase cards: Offer interest-free periods on new purchases, which can be useful for financing large expenses.
  
  

• Charge cards: Require full payment each month but may offer higher spending limits and robust rewards.

Advantages of business credit cards for small businesses

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. 

Separate business and personal expenses

Using a dedicated business card makes it much easier to track company spending and simplifies your bookkeeping, accounting and tax preparation. 

Build business credit

Using your card regularly within the right limits and paying on time can help establish and improve your business credit profile, potentially leading to better financing options in the future.

Manage cash flow

The flexibility of business credit cards can help smooth out irregular income and expenses. That can provide a buffer when waiting on customer payments or facing an unexpected bill.

Earn rewards on business spending

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 a market-leading 2% cashback on every payment for the first six months (capped at £2,000 cashback, whichever comes first), followed by 1% cashback on everything you spend thereafter.

Internal expenses control 

Some credit card providers, including Funding Circle, offer company cards for employees at no extra cost, meaning you can manage all your company spending through a single channel with full visibility and control. 

Potential drawbacks to consider

It’s only fair to look at potential considerations as well as the benefits when it comes to using a business credit card.

• Personal liability: Most UK business credit cards require a personal guarantee, meaning you’re responsible if the business can’t pay.
  
  

• Higher interest rates: Business cards often have higher APRs than personal cards, which can make carried balances more expensive.
  
  

• Fewer protections: Some consumer credit protections don’t apply to business cards.
  
  

• Annual fees: Some Premium business credit cards may come with high yearly charges.

How do I qualify for 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:

• Personal credit score: The majority of cards require a good to excellent personal credit history.
  
  

• Business structure: You may need to be a registered limited company or established sole trader.
  
  

• Annual turnover: Some cards have minimum revenue requirements.
  
  

• Time in business: Newer companies may face stricter criteria.

To quality for a Funding Circle cashback card, we ask that you be:

• Based in the UK
  
  

• A limited company
  
  

• Have at least 1 year of trading history
  
  

• Have an annual turnover of at least £30,000

Can I get a business credit card as a new business?

If you have just launched your business, securing a business credit card can be challenging. Many lenders, including Funding Circle, require at least 1 year of trading history and a minimum annual turnover to qualify for a credit line.

How to apply for a business credit card

The precise application process will depend on the lender, but you typically need to provide: 

• Business details: Legal name, structure, industry and company number
  
  

• Personal information: Your name, address and sometimes personal income
  
  

• Financial information: Annual turnover and estimated monthly card spend

Many UK card issuers offer quick online applications with fast decisions. Check out Funding Circle’s application process for Cashback and FlexiPay. 

What protection does a business credit card offer?

It’s important to be aware that the protections for business credit cards are not the same as those for personal ones. Notably, Section 75 of The Consumer Credit Act 1974 which makes the credit card company jointly liable with the retailer for goods and services purchased using the credit card does not apply to businesses or other organisations.

So, how is your business protected?

• The chargeback scheme: While Section 75 doesn't apply, business cards still benefit from standard Visa and Mastercard chargeback rules. If a supplier fails to deliver goods or bills you incorrectly, you can still dispute the transaction through your card issuer to try and reverse the payment.
  
  

• Internal controls: The best defense against fraud or employee misuse is proactive management. This means setting strict spending limits on employee cards, regularly reviewing itemised statements, and integrating your card with accounting software to catch unauthorised charges early.

How to use your business credit card responsibly

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 in your company.

• Set clear policies: Establish guidelines for employee card use, including spending limits and approved categories.
  
  

• Monitor transactions: Regularly review statements to catch any unauthorised charges.
  
  

• Pay on time: Late payments can result in fees and damage your credit score.
  
  

• Consider setting up a direct debit: This ensures you never miss a payment due date.
  
  

• Choose the right card: Select a card that aligns with your business spending patterns to maximise value.

Learn more about avoiding potential business credit card mistakes

How Funding Circle’s Cashback Card can help your business 

Picking the right business credit card should make it easier to run your business. Funding Circle’s Cashback card is designed to make spending as simple and rewarding as possible.  You can enjoy:

• 2% cashback for the first 6 months (up to £2,000)
  
  

• Then 1% uncapped cashback after that
  
  

• Up to 42 days interest-free
  
  

• Up to £250k credit limit
  
  

• No annual fees, no forex fees

Rates start from 14.9% per year, and you can also streamline your expense management with free, unlimited Company cards and data that auto-syncs with your accounting software.

Find out more about the Funding Circle Cashback card here.

18/06/26: 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.