Guide to Business Credit Cards (2025)

Business credit cards can be a smart way to manage cash flow, track expenses, and build your company’s credit profile. 

Whether you’re a sole trader, freelancer, or running a growing enterprise, the right card can offer valuable perks, such as cashback, rewards, and expense controls. 

But it’s important to understand how they work, what they cost, and how to use them responsibly. 

This guide breaks down everything you need to know—from choosing the best card to protecting your credit score—so you can make confident, informed decisions that support your business’s financial health.

What Is A Business Credit Card?

A business credit card works like a personal credit card, but it’s specifically designed for company spending. It gives businesses a revolving line of credit, allowing them to borrow up to a set limit and repay either in full or over time, with interest charged on any outstanding balance.

What sets business credit cards apart are the tailored benefits. They typically offer higher credit limits to cover larger expenses and reward programmes that provide cashback or points on categories like travel, office supplies, or advertising. These perks can help offset business costs and even generate savings over time.

Another key advantage is expense management. Business credit cards often come with detailed spending reports, accounting software integration, and employee cards with custom limits—making it easier to track and control company finances.

Responsible use can also build your business credit score, improving your chances of securing loans or better financing terms in the future. Regular, on-time payments demonstrate financial stability, which lenders look for when assessing business creditworthiness.

For businesses, a credit card isn’t just a payment method—it’s a financial tool that can improve cash flow, streamline expenses, and offer valuable perks when used wisely.

Different Types of Business Credit Cards

Business credit cards aren’t one-size-fits-all. Different cards offer unique benefits depending on how your business spends and what financial goals you’re aiming for. Here’s a breakdown of the most common types:

Type	Best For	Key Features
Business Rewards Credit Cards	Businesses with high spending in specific categories	Earn cashback, points, or miles on purchases; redeem rewards for travel, gift cards, or statement credits
Business Travel Credit Cards	Frequent business travellers	Airline miles, hotel points, lounge access, travel insurance, and no foreign transaction fees
Business Cash Back Credit Cards	Businesses looking to save on everyday expenses	Higher cashback rates for select spending categories like office supplies, telecom, or advertising
Business Charge Cards	Companies with large, fluctuating expenses	No preset spending limit; the balance must be paid in full monthly; late fees can be significant
Credit Builder Cards	Businesses with limited or poor credit histories	Lower credit limits; few rewards; helps build a positive credit score by reporting to credit bureaus
0% Intro APR Business Credit Cards	Businesses financing large purchases or consolidating debt	Interest-free period (typically 6–18 months) for purchases or balance transfers

The right business credit card can help manage cash flow, earn rewards, and improve credit history—but choosing the right one depends on your company’s spending habits and financial strategy.

Pros and Cons of Business Credit Cards

Pros

• Simplified Expense Tracking – Automatically categorises expenses and integrates with accounting software.
• Separation of Personal and Business Finances – Protects personal credit and simplifies tax filing.
• Cash Flow Management – Helps cover short-term expenses while waiting for client payments.
• Rewards and Incentives – Earn cashback, points, or miles on business purchases.
• Employee Cards – Issue cards with employee spending limits, streamlining expense management.
• Building Business Credit – Regular use and timely payments improve business credit scores.
• Higher Credit Limits – Typically offer greater spending power than personal credit cards.
• Travel Perks – Includes lounge access, travel insurance, and rewards for flights and hotels.
• Purchase Protections – May include extended warranties, fraud protection, and chargeback rights.

Cons

• High Interest Rates – Carrying a balance can lead to expensive interest charges.
• Personal Guarantee Requirement – Owners may be personally liable for business debt.
• Limited Consumer Protections – All consumer credit regulations do not cover business cards.
• Potential for Overspending – Easy access to credit can lead to unmanageable debt.
• Annual Fees – Some business cards come with costly annual fees.
• Impact on Personal Credit – Missed payments can negatively affect the owner’s personal credit score.
• Hidden Fees – Some cards charge foreign transaction fees, late payment penalties, or cash advance fees.

How Much Do Business Credit Cards Cost?

The cost of a business credit card depends on the provider and the card’s features. While some cards come with no annual fee, others may charge hundreds of pounds per year in exchange for premium perks. Here’s what to consider:

• Annual Fees – Can range from £0 to several hundred pounds. Higher-fee cards typically include benefits like rewards schemes, travel perks, or insurance.
• Interest Rates – If you don’t clear your monthly balance, you’ll pay interest, which is calculated as an Annual Percentage Rate (APR). Rates vary based on your credit profile and the card type.
• Late Payment Fees – Missing a payment can trigger a fixed penalty fee. Some issuers also increase interest rates for late payments.
• Foreign Transaction Fees – Usually around 2–3% of the purchase amount when spending in a foreign currency. Some premium cards waive this fee.
• Cash Advance Fees – Withdrawing cash from an ATM incurs a fee (usually a percentage of the amount withdrawn) and often comes with a higher interest rate.
• Over-Limit Fees – Some providers charge a fee if you exceed your credit limit, though not all business credit cards apply this charge.
• Card Replacement Fees – If you lose your card, you may need to pay for a replacement, though many issuers offer free replacements.

A card with high fees isn’t necessarily bad—it might come with cashback, travel rewards, or flexible repayment options that offset the cost. Always check the full terms before applying to ensure you get the best value for your business.

Who Can Get A Business Credit Card?

Business credit cards aren’t just for large, established companies. A wide range of individuals and entities can apply, including:

• Limited Companies – Often the most common users, business credit cards are used for expense management, cash flow flexibility, and credit building.
• Sole Traders—Self-employed individuals can apply, helping to separate business and personal expenses while accessing potentially higher credit limits.
• Partnerships – Both general and limited partnerships can benefit from simplified expense tracking and convenient payments.
• Freelancers & Contractors – Even without a registered company, self-employed professionals can use business credit cards to manage business-related costs.
• Startups and new Businesses—Startups may qualify even without an established credit history, with issuers often assessing personal credit instead.
• Nonprofits – Charities and other nonprofit organisations can apply, making tracking expenses easier and managing spending across teams.

How TO Apply for a Business Credit Card

What You Need To Apply

While requirements vary by provider, most business credit card applications will require:

1. Basic Business Information – Name, contact details, business address, and industry type.
2. Legal Structure – Whether you operate as a sole trader, partnership, or limited company.
3. Company Registration Number (CRN) – Required for limited companies and partnerships.
4. Financial Details – Including annual revenue, estimated monthly expenses, and possibly business bank account details.
5. Personal Information – The primary cardholder’s full name, address, National Insurance number, and sometimes personal income details.
6. Time in Business – Some issuers may require a minimum trading period before approval.

Up-to-date and accurate documents will help speed up the process and improve your chances of approval.

Step-by-Step Application Process

A business credit card can be a valuable financial tool, helping you manage expenses, build credit, and access rewards. Here’s a simple, step-by-step process to apply.

Step 1: Choose the Right Credit Card

Before applying, research different business credit cards to find one that suits your needs. Consider:

• Interest rates and fees
• Credit limits
• Rewards and cashback options
• Eligibility requirements

Step 2: Visit the Credit Card Provider’s Website

Once you’ve selected a card, visit the provider’s website and find the application page. Click the ‘apply’ button to start.

Step 3: Start Your Application

You may need to create an account or log in to an existing one before proceeding.

Step 4: Enter Your Business Information

Provide accurate business details, including:

• Legal business name and trading name (if different)
• Business address and contact details
• Company Registration Number (CRN) (if applicable)
• Business structure (sole trader, partnership, or limited company)
• Industry type

Step 5: Provide Financial Details

You’ll need to enter financial information such as:

• Annual business revenue
• Estimated monthly credit card expenditure
• Business bank account details (if required)

Step 6: Add Your Personal Information

Lenders assess both business and personal creditworthiness. You’ll need to provide:

• Full name and residential address
• Date of birth
• National Insurance number
• Personal income details

Step 7: Review the Terms & Conditions

Carefully read through the terms, including:

• Interest rates and fees
• Credit limit terms
• Late payment penalties
• Rewards and benefits

Step 8: Submit Your Application

After reviewing all details for accuracy, submit your application. Some providers offer instant decisions, while others may take a few days.

What Happens After You Apply For a Business Credit Card?

Step 1: Credit & Business Assessment

The provider will review your application, check your credit score, and assess your business finances.

Step 2: Verification

They may contact you for additional details or documentation.

Step 3: Approval or Denial

• You’ll receive your credit limit, interest rate, and card details if approved.
• If you are denied, the provider will inform you why. You can then take steps to improve your creditworthiness before reapplying.

What to Do If Your Application Is Denied

1. Find Out Why – Review the reason for the rejection provided by the lender.
2. Check Your Credit Report – Obtain reports from Experian, Equifax, or TransUnion to identify any issues.
3. Improve Your Credit Score – Pay bills on time, reduce debts, and correct report errors.
4. Strengthen Business Finances – Increase revenue, maintain accurate records, and demonstrate financial stability.
5. Consider a Different Card – Some cards have lower eligibility requirements.
6. Look Into Secured Credit Cards – These require a deposit and can help build credit.

Activating Your Business Credit Card

Once approved, follow these steps to activate and use your card:

1. Receive & Activate Your Card – Activation instructions, typically via phone or online, will be provided.
2. Set Up Online Banking – Manage transactions, pay bills, and track expenses.
3. Understand Your Credit Terms – Know your credit limit, fees, and rewards.
4. Set Up Payment Methods – Arrange direct debits or alerts to avoid late payments.
5. Start Using Your Card Responsibly – Keep track of spending and ensure timely repayments.

Understanding The Business Credit Card Agreement

Before committing to a business credit card, you must understand what you’re signing up for. This legally binding agreement outlines your responsibilities, potential costs, and how the card issuer manages your account. Overlooking the fine print could lead to unexpected fees, high-interest costs, or liability risks.

Here are the key areas to focus on:

• Fees & Charges—Business credit cards often have various fees, including annual fees, foreign transaction charges, and penalties for late payments. These can quickly add up, so check the entire fee structure before applying.
• Annual Percentage Rates (APRs)—The APR is crucial if you plan to carry a balance. Some cards have fixed rates, while others vary based on market conditions. Confirm whether promotional rates apply and how long they last.
• Credit Limit & Employee Cards—Know your total credit limit and whether additional employee cards will reduce this allowance. Some providers let you set spending limits on employee cards, which can help with budgeting.
• Rewards & Restrictions – Many cards offer cashback or travel perks, but there may be limits on how much you can earn or specific categories that qualify. Read the terms to ensure the rewards align with your business spending.
• How Payments Are Applied – Some issuers first apply payments to the lowest interest balance, allowing higher interest balances to accrue more charges. Understanding this process helps you manage repayment efficiently.
• Liability & Personal Guarantees – Some business credit cards hold the owner personally responsible for the debt, even if the business is separate. Check whether a personal guarantee is required and what that means for your financial liability.
• Closing the Account – If you ever need to cancel the card, be aware of potential impacts on your credit score and whether any termination fees apply. Closing an account with an outstanding balance could also affect your business’s credit standing.
  

Taking the time to review these details can save you money and prevent financial headaches down the line. Always read the full terms before signing, and if anything is unclear, ask the issuer for clarification.

How to Use a Business Credit Card Effectively

A business credit card can be a powerful financial tool—if used wisely. From managing expenses to maximising rewards, the right approach can help your business build credit, improve cash flow, and earn valuable perks.

Managing Expenses & Payments

• Set Clear Spending Policies – Define precisely what can and can’t be charged to the company card. This keeps spending in check, prevents misuse, and makes expense tracking easier.
• Track & Categorise Transactions—Review statements regularly and categorise expenses into categories. This not only helps with budgeting and accounting but also highlights spending trends that could lead to cost savings.
• Always Pay on Time – Late payments can incur costly fees and hurt your business credit score. Set up automated payments to avoid missing due dates.
• Keep Credit Utilisation Low – Use less than 30% of your credit limit. A high utilisation rate can negatively impact your business’s credit profile, making it harder to access financing.
  

Maximising Rewards & Benefits

• Pick a Card That Matches Your Business Needs—If your business involves frequent travel, a card offering airline miles or hotel perks may be ideal. For high everyday spending, a cashback card might provide better value. Capital on Tap is an excellent option for businesses seeking strong cashback and rewards.
• Understand the Rewards System – Some cards have rotating bonus categories, while others offer a flat rewards rate on all spending. Knowing how your card’s rewards work ensures you make the most of every purchase.
• Redeem Smartly—Don’t let points expire or go to waste. Regularly check your balance and use rewards that offer the best value, such as travel, cashback, or business-related purchases.
  

Preventing Misuse & Fraud

• Monitor Transactions Regularly – Check your account statements frequently to spot unauthorised charges. If you see anything suspicious, report it immediately.
• Control Employee Spending – If employees need access to the company card, consider issuing separate cards with individual spending limits. This helps maintain control while allowing flexibility.
• Update Passwords & PINs – Regularly change online banking passwords and card PINs to reduce the risk of fraud.
• Enable Transaction Alerts – Card providers offer instant alerts for large or unusual transactions. Activating these can help you detect and stop fraudulent activity quickly.

Impact of Business Credit Cards on Your Credit Score

Business credit cards are crucial in building and maintaining your company’s financial profile. However, they can also influence your credit score, depending on how they are used and reported. Here’s how business credit cards can impact both business and personal credit scores:

Impact on Business Credit Score

1. Building Credit History
   A business credit card helps establish a company’s credit profile, giving lenders a track record to assess financial responsibility. Consistently managing the card well can lead to better-borrowing terms in the future.
2. Payment History
   Like personal credit, timely payments are the biggest factor in a business credit score. Late or missed payments can lower the score and make borrowing more expensive.
3. Credit Utilisation
   Business credit cards come with a credit limit, and how much of that limit is used affects the credit score. A low utilisation rate (below 30%) is preferable, as high balances may signal financial strain.
4. Credit Inquiries
   Applying for multiple business credit cards quickly can lead to various hard inquiries, which may negatively impact the credit score.
5. Public Records & Collections
   Defaults, judgments, or unpaid debts sent to collections will significantly lower a business credit score and may impact the ability to secure funding.

Impact on Personal Credit Score

1. Personal Guarantee Risks
   Many business credit cards require a personal guarantee, meaning the business owner is personally responsible for unpaid debts. If the business fails to make payments, the card issuer can report the missed payments on the owner’s personal credit file.
2. Hard Credit Inquiries
   Some issuers perform a hard inquiry on the business owner’s personal credit when applying for a business credit card, which can temporarily dip personal credit scores.
3. High Credit Utilisation
   While most business credit cards do not report to personal credit bureaus, some issuers may report activity, particularly for sole traders or small business owners. A high balance can increase personal credit utilisation and lower the score if reported.
4. Late Payments
   If the business credit card reports to consumer credit bureaus and payments are missed, this can negatively impact the owner’s personal credit history.

Best Practices for Managing Business Credit Cards

• Pay on Time – Set up direct debits or payment reminders to ensure timely payments.
• Keep Utilisation Low – Avoid maxing out the credit limit; aim to use less than 30% of the available credit.
• Monitor Credit Reports – Regularly check business and personal credit reports for errors or unauthorised activity.
• Separate Business & Personal Expenses – Use business credit cards strictly for business-related transactions to maintain clear financial records.
• Limit New Applications – Avoid multiple credit applications quickly to prevent many inquiries.

Business credit cards can be a powerful tool to build business credit, but they come with responsibilities. Understanding how they impact business and personal credit scores can help owners make informed financial decisions.

FAQs