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What is a business credit card?

The simplest way to look at a business credit card is like a personal credit card, but for your company.

As a UK limited company, your business is a separate legal entity from you. This card is officially in your company's name, and it gives your business access to a line of credit (a set spending limit) that you can use, pay back, and re-use.

The main job of this card? It's all about keeping your business money and your personal money completely separate. This simplifies your accounting, makes tax time a whole lot easier, and, crucially, helps your company build its own credit history. This can be key for getting better deals on larger finance down the line.

Who is eligible for a business credit card?

To be eligible for a Capital on Tap Business Credit Card you must:

• Be based in the UK,
• Be active on Companies House & registered as a private limited company (Ltd) or limited liability partnership (LLP),
• Have no unsatisfied county court judgments (CCJs) against you or your company in the last year,
• Have a monthly turnover of at least £2,000, or £24,000 per year.
• Terms and conditions apply.

To be eligible for a Funding Circle Cashback Credit Card your business needs to:

• Be based in the UK,
• Be a limited company (Ltd),
• Have at least one year of trading history,
• Have an annual turnover of at least £30,000.

None of the following business types are accepted:

• Sole traders,
• Public limited companies (PLC),
• Dormant, dissolved or inactive companies,
• Charities, trusts, funds, or Royal Charters.

What are the benefits of a business credit card?

These cards are powerful tools for growing SMEs. Here are the major benefits:

• Separating Business and Personal Finances: This is huge for admin and tax. No more hunting through personal bank statements for that one office supplies purchase, everything is neat and centralised.
• Improved Cash Flow: You get an interest-free period on purchases (often up to 45-56 days). This means you can pay for stock or a big expense today and not have to pay the bill until the statement is due, giving your company's cash reserve a bit more breathing room.
• Rewards and Perks: Many cards offer rewards tailored for business use, such as uncapped cashback on all spending, Air Miles/Avios points for travel, or discounts on business software.
• Employee Spending Control: You can usually get free supplementary cards for your employees and set individual spending limits on each one. This gives your staff flexibility while giving you total oversight on where the money is going.
• Building Your Business Credit Score: Making regular, on-time payments establishes a solid credit history for your company, making it easier and cheaper to access other forms of finance (like loans) in the future.

What are the risks of a business credit card?

Like any financial product, there are a few risks you need to be aware of:

• High Interest Rates (APR): If you don't pay your balance off in full each month, you'll be charged interest on the outstanding amount. Business credit card interest rates can be higher than other forms of finance, so carrying a large balance can be costly.
• Fees and Charges: Look out for annual fees, late payment fees, or high foreign transaction (FX) fees if you spend money abroad. These can quickly erode the value of any rewards you earn.
• Accumulating Debt: The flexible nature of a credit card can make it easy to overspend. If your business doesn't have a plan to clear the balance quickly, you could end up in a cycle of debt.
• Damage to Credit Score: Missed or late payments don't just cost you in fees; they negatively impact your company's credit score, making future borrowing much harder.

Key things to consider when looking for business credit cards

To find the perfect match for your limited company think about what your company is searching for:

1. What's Your Primary Goal? Do you need to smooth out cash flow (look for a 0% intro deal)? Do you want to maximise savings (look for a strong cashback card)? Or do you just need to separate expenses (look for a low/no-fee, simple card)?
2. How Much Does Your Business Spend? Higher spenders benefit most from rewards cards, as the rewards are more likely to cover the annual fee. If your spend is modest, a no-annual-fee card is likely the most economical choice.
3. Do You Spend Internationally? If you purchase from overseas suppliers or travel, a card with zero FX fees will save you a fortune compared to the typical 3% foreign transaction charge.
4. Employee Cards and Expense Management: Check the provider’s software. Does it allow you to set limits for individual staff cards? Can it easily integrate with your accounting software (like Xero or QuickBooks)? Good expense tools can save you hours of admin time.

Financial product information

Representative example*

9.7% APR Representative based on a loan of £50,000 repayable over 24 months.

Monthly repayment of £2,291.56. The total amount payable is £54,997.44

*Some lenders may apply fees during the application process, please note that these are set and provided by these entities.

Annual Percentage Rates

Rates from 8.2% APR

Repayment period

1 month to 30 years terms