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A business credit card allows you to free up cash flow by using a line of credit to pay for your business expenses. These cards usually come with other perks including rewards programs, additional cardholders and expense reporting systems. Unlike a personal card, the company may be liable for the debt on a business credit card, not the individual.
Unlike personal credit cards, business credit cards are designed for work-related spending and cash flow. Business card accounts also offer specialised features, such as additional cards for employees, customisable spending limits for different users and expense-tracking tools. Some business credit cards even have analytics tools designed to help with business reporting and budgeting. Depending on the card, you could also save time adding the expenses to your financial records by setting up an automatic fee with programs such as MYOB and Xero.
Similar to personal credit cards, business credit cards give you access to funds up to a certain limit (the credit limit) and allow you to pay off your expenses over time (with interest charges). Some business credit cards also include annual fees – either for the whole account or per card – as well as perks such as rewards, complimentary insurance or airport lounge passes.
Business credit cards may offer either personal liability or business liability for the account. The type of liability determines who is responsible for managing the card and can be an important factor when choosing a business option. We’ve outlined the key details of each option below:
A charge card acts as a short-term (usually monthly) loan to a business for any transactions charged on the card. These cards defer payment until the end of the statement period when you're required to pay off the account in full. Interest rates do not apply to charge cards as there is no revolving line of credit, but there are often hefty late fees if you don’t pay the balance in full by the statement due date.
Business charge cards are designed for organisations that have the financial stability to clear their balance each billing cycle, which will typically be between 25 and 51 days. If you are looking to borrow funds over a longer period of time, business credit cards may offer more flexibility. Despite these different account structures, charge cards do have many similar features to conventional credit cards, including expense tracking tools, supplementary cards, rewards programs and complimentary extras. As a result, they are often put in the same category as business credit cards.
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If you run a medium to large business, you could consider a corporate card instead of a business card that is more focused on the needs of SMEs (small to medium enterprises). Some of the features you could expect to find on a corporate card include unlimited cards for employees, control features for each card (as well as the entire account), a dedicated business account manager or service team, integration with business finance software and unauthorised use insurance. There are also corporate cards that offer rewards and extensive travel perks.
This is similar to the features offered on other business credit cards, but at a larger scale. Corporate cards also have different eligibility requirements, such as a minimum number of years in trading or a minimum annual turnover. Before applying and opening a corporate credit card account, you'll usually need to submit an enquiry and talk to the provider's business team.
If you have black marks on your credit history (such as defaults) or if you have no credit history, it could make it hard to get approved for a business credit card. When that's the case, here are some options you could consider:
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Comparing business credit cards side by side allows you to find an option that is suited to your business’s specific needs. Some of the core factors to compare when weighing up business credit cards include:
It’s important to choose a business credit card that fits with your existing business spending. This means you'll need to look at a range of factors, including:
You can then match the types of transactions you make with the card features. For example, if your business uses a credit card for flights and regularly pays it off, a frequent flyer card might offer competitive value. On the other hand, if your business relies on the card for credit, a low rate, low fee or interest-free days business credit card might be the most affordable option.
Business credit cards feature a range of fees and charges. Some of the most common include:
If you’re interested in getting a business credit card, the first step is to compare a range of options to find one that is convenient and affordable for your business. Once you have found one, you can usually apply online. Before you apply for a credit card, you'll need to make sure that you meet the following eligibility requirements and have organised the necessary documents to complete the application:
The other details you will be asked to provide vary depending on the card and whether you choose a business liability or personal liability option. But generally you will need to provide:
Once you have submitted your application, you should get a response within a few minutes. If you’re approved, you could have your card in as few as 5–10 business days (depending on the account and issuer). You can then activate the card and start using it for your business. With expense tracking features, additional cards, interest free periods and reward options, credit cards can be a convenient option for both big and small businesses. Now that you know more about them, you can compare your options and find a product that suits your business’ needs.
To choose a business credit card that best suits your company's needs, you'll need to consider a bunch of different factors, these include:
You may also want to look for specific features, such as business credit cards that are compatible with your accounting software. But weighing up these factors – and any others that are specific to your business goals – will help you compare credit cards based on the features that offer the most value to your business.
This can depend on the structure of your business and how you use the account. But in general, you can claim a tax deduction for most operating expenses – including banking fees and charges – in the financial year that these fees are charged. This means you could be able to claim your business credit card's annual fee as well as any interest that's charged if you carry a balance. Talk to your accountant for specific details on what charges you'll be eligible to claim. Alternatively, you could call the Australian Taxation Office (ATO) business line on 13 72 26.
Some business credit cards support 2-5 additional cardholders, while others support up to 99 additional cardholders (or more). You can check how many cardholders a credit card allows in Finder's individual card reviews or by looking at the card's product disclosure statement (PDS).
Most business credit cards will not be eligible for instant approval as there is typically increased risk for business lending and your application will need to be assessed once you submit it.
If you apply for a business credit card with personal liability, the card issuer will check your credit history as part of the application process. This means details of the application will be added to your credit file. If you're approved for the card, account details will also be listed on your personal credit file.
The rewards available for redemption can vary between business credit card and personal credit card accounts. Some of the rewards that are typically available through business credit cards include travel, frequent flyer point transfers, gift cards and cashback options. When you're comparing business credit cards with rewards, you can see what types of options are available by looking at the rewards program details. The number of points earned per dollar and the purchases that are eligible for points can also vary depending on the type of business credit card and personal credit card you are comparing.
According to the Australian Taxation Office (ATO), receiving points is not subject to tax but receiving rewards may have tax implications. You can refer to the ATO website for further information on when tax may apply to rewards you redeem through a loyalty program.
Some business credit cards come with complimentary travel insurance, but you will need to check this information for any card you're considering. Depending on the bank and the insurance company they are partnered with, the requirements to qualify for cover and the inclusions will differ. It is important to check the terms and conditions around the travel insurance policy to ensure they match your travelling needs before applying for the credit card.
Credit card companies generally allow balance transfers worth between 70–100% of the approved credit limit for the card. The specific amount will depend on your application, credit history and the bank's lending criteria.
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