Using a credit card for your business

Business credit cards offer an efficient alternative to the petty cash and cheque systems traditionally used in businesses. Both self-employed and large business owners alike would find business credit cards an easier option, enabling you to see what is being spent where, and enabling you to reduce both company expenditure and the amount of administration. If you are a small, or even one-person operation, then a business credit card can be very useful in keeping your business and personal transactions separate, avoiding the need to use your personal credit card for business items.

Most business credit card providers enable you to decide how many extra credit cards (with the company name) will be needed for staff to use and allow you to stipulate the credit limit for with each individual card. Business statements can usually be tailored to suit companies’ own finance requirements and give details of overall company expenditure each month and individual breakdowns for each business card relating to the account.

Business credit cards often come with a range of incentives related to business. For instance some offer discounts on business related expenses or the facility to accumulate air miles. These extras often come with insurance features including travel insurance, extended warranties on selected products and purchase and anti-fraud insurance.

Some of the low introductory interest rate offers that you see on individual credit cards are also available on business credit. There can be an annual fee associated with a card, so before applying it is always best to check, as well as looking at the standard interest rate that applies after the initial period. By comparing the interest rates, fees and incentives offered by each provider, you should be able to find a business credit card that best fits the need of your company.

The MBNA Business Self Employed Credit Card charges no fee and keeps your business activities in one place. It is available to businesses which have been up and running for at least two years. There is a low introductory interest rate of 4.9% on balance transfers and credit card cheques for six months from the opening of the account, and an APR of 17.9%. As with most individual credit cards, you can get up to 57 days interest free purchases if you pay your statement in full and on time every month. You can manage your account online, viewing balances, each card’s credit limit and up to 13 months of transaction history.

Benefits come from a number of sources.

O2: 10% discount off the advertised retail prices of any of the business voice and data tariffs.

DHL: Get 10% off the online rate.

Google: Get £50 of credit for targeted advertising and new business leads.

Dyno (part of British Gas): You can benefit from 15% off standard rates for many services.

DMSL: Gives you preferential cash-back rates on a wide range of BT Business Services.

Rawlinson Butler: Offers 10% off its standard rates for legal services.

Reed Learning: Offers a 25% discount on over 170 courses.

UOE: One of the major office and stationery supply specialists, offers a range of savings for Visa Commercial cardholders:

City Sprint: Offers up to 20% off a range of courier services.

MBNA also has a Business Credit Card, which gives you 20,000 free destination miles with each account opened. On a bmi flight you can reach Milan, Venice, Madrid and Amsterdam amongst others. You also receive one destination mile for every pound spent on each card account. You can have one account with multiple cards, each with its own credit limit. Balance transfers have an introductory rate of 7.9% for six months. The APR is 17.9%, and there is an annual fee of £65. You can also get free worldwide annual travel insurance, worth £135; free purchase protection insurance and employee misuse insurance. The range of discounts from various suppliers is the same as for the MBNA Self Employed card.

Barclaycard has a range of business credit cards to suit the size of the organisation. Small businesses can save time on business finance, the card makes payments simple and convenient, providing extra cash flow flexibility. Large organisations have a choice of payment solutions to suit the organisation’s needs to help control expenditure. There are several cards: Business Corporate card account; Business Purchasing card account (businesses with turnover over £10m); Business Lodge account (for larger organisations with significant air travel); Multinational organisations have an option too.

Mid-sized businesses can use the card to reduce administration and make cost savings. The public sector card has no fees. The standards business credit card has an annual fee of £32, and the gold card (which has the added benefit of fee travel insurance, and a Free Priority Pass membership giving access to over 400 airport lounges) has a £78 annual fee.