Manage your cash flow, save time on expense reports and enjoy perks such as points for your spending with a business credit card.
Business credit cards are designed to suit the financial needs of different types of companies, ranging from small startups to major corporations. These cards allow you to keep your business and personal expenses separate, assign cards to employees, manage your cash flow, track your finances and earn rewards.
Just as with personal credit cards, there is a range of factors to consider before deciding if a business card is right for you. You can use this guide to learn more about business credit cards and how to compare them so that you can find an option that suits the needs and objectives of your business.
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Business Credit Cards Comparison
What is a business credit card?
You can use a business credit card to free up cash-flow by using a line of credit to pay for business expenses. They also usually come with perks including rewards programs, additional cardholders and expense reporting systems. Unlike a personal card, the company is liable for the debt, not the individual.
Business credit cards vs. personal credit cards
Unlike personal credit cards, business credit cards are designed specifically for work spending and often include features such as additional cards for employees, customisable spending limits for different users and expense tracking. Some business credit cards may even have analytics tools designed to help with business reporting and budgeting.
But in most other ways, business credit cards are similar to personal credit cards. With either option, you'll get access to funds up to a certain limit and be able to pay off what you spend over time (with interest charges). Both personal and business credit cards also include costs in the form annual fees and interest rates, as well as extras such as rewards programs or complimentary insurance.
Who is responsible for the credit card? Personal vs. business credit card liability
Business credit cards can offer either personal liability or business liability for the account. This 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 below:
Personal liability credit cards
- Primary cardholder is always responsible for managing the account.
- You’re responsible for how much of the balance is paid off by the due date each month.
- If a payment is late or missed, it’s you who the credit card company will contact.
- If you choose to take personal responsibility for a business credit card, you can usually apply without needing to submit your business financials.
- You will need to include details of your personal income, debts and assets, as well as your Australian Business Number (ABN).
Business liability credit cards
- With business liability, it is the business entity that is responsible for managing the account.
- If there is an issue with the account, the entire business will be held responsible, rather than one individual person that’s linked to the account.
- It can be useful if you are a partner in a business, or if you want to have one credit account that several employees can use.
What about business charge cards?
A charge card acts as a short-term (usually monthly) loan to a business for any purchases 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 they often apply hefty late fees if you don’t pay the balance in full by the 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.
Types of business credit cards
Whether you're looking to keep your business' credit card costs low, want to earn rewards points as you spend or want to take advantage of interest-free days, there are business credit cards on the market to suit many different types of cardholders:
Rewards business credit cards
These cards reward you for paying with a credit card, usually offering reward or frequent flyer points for every $1 spent on eligible purchases. Unlike personal credit cards, a business credit card with rewards will let you earn points on your work spending. It's important to remember that these cards usually come with higher annual fees and interest rates, so you'll need to make sure that the value of the rewards will outweigh any costs.
Some business credit cards also allow you to earn rewards points on utilities and government bills (including ATO payments), unlike most personal credit cards. For more information, you can check out our guide to earning reward points while paying your tax bill.
Frequent flyer business credit cards
This type of rewards business credit card is linked to an existing frequent flyer program, such as Qantas Frequent Flyer, Qantas Aquire (for businesses) or Virgin’s Velocity Frequent Flyer program. Some business frequent flyer credit cards allow you to directly earn frequent flyer points for every $1 spent on the account, while others let you transfer rewards points to a wide range of frequent flyer programs. These cards are suited to businesses that have existing ties to a frequent flyer program, or those that want to offer additional benefits to employees that use a supplementary credit card for business expenses.
Low rate business credit cards
These business credit cards have low standard variable interest rates for purchases and can give companies or sole traders a more affordable option if they need to pay off spending over a longer period of time. Some options, such as the Bankwest Business Low Rate Mastercard, even offer the same standard interest rate for purchases, cash advances and balance transfers.
Many low rate business credit cards also have a low annual fee, which makes them popular for small businesses that need a cost-effective way to finance major expenses as they arise. They can also suit businesses that want a credit card on hand for any unexpected costs, or have seasonal and variable amounts of revenue.
Low fee business credit cards
Similar to low rate options, low fee business credit cards are designed for companies and sole traders that want affordable access to a line of credit. These cards generally have annual fees under $100, or may even offer no annual fee if certain requirements are met.
For example, the ANZ Business Low Rate Visa credit card has a standard annual fee of $150, but waives this cost if your business spends more than $20,000 on the account annually. This type of feature can make having a business credit card more affordable.
Business credit cards with interest-free days
These credit cards offer businesses a competitive interest-free period for making purchases. A range of business credit cards offer an interest-free period (for example, “up to 55 days interest-free”) if you pay your balance in full by the statement due date. Depending on the card, they may include other features such as rewards, low fees or complimentary insurance.
Other business cards with interest-free days may actually be classified as charge cards, with no interest rate or pre-set spending limit, but a requirement to pay off the entire balance by the statement due date. Both of these types of interest-free options are suited to businesses looking for a short-term cash flow solution.
Corporate business credit cards
These credit cards are designed for larger businesses that want one account for business expenses. Corporate business credit cards may provide up to 99 supplementary cards (or more in some cases) and offer pre-set spending limits for each additional cardholder.
How to compare business credit cards
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:
Business spending habits
It’s important to choose a business credit card that matches your existing business spending. Business cards that offer a lot of “bells and whistles” may seem like an attractive offer, but not all offers will help maximise value while operating your business.
Choosing a card should depend on the types of transactions your business undertakes. In credit card terms, this would include eligible purchases, capital expenses, additional cardholder spending and business travel needs. You can then match the types of transactions 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.
Fees and charges
Business credit cards feature a range of fees and charges. Some of the most common include:
- Annual fees. Business credit card annual fees can range from $0 to $700 (or more).
- Supplementary cardholder annual fees. While some business credit cards offer additional cardholders at no extra cost, others may charge anywhere from $10 to $150 per annum.
- Standard interest rates. Business credit card interest rates can be as low as 9.99% p.a. and as high as 22% p.a., with some cards charging the same rate for all transactions and others applying different rates depending on whether it is a purchase, cash advance or balance transfer.
- Currency conversion fees. This charge is applied for transactions made overseas or in a foreign currency and is typically 3% to 3.5% of the transaction value.
- Minimum required monthly payments. Business credit cards generally have minimum payments of 2% to 3% of the outstanding balance, unless they are charge cards that need to be paid in full for each statement cycle.
- Overlimit fees. If you or an employee goes over the credit limit on the account, a fee of $10 to $30 may be applied.
- Late payment fees. If you don’t make a payment on your business credit card, you could be charged a fee may be applied. This cost is usually around $10 to $30 but could be higher for some options, particularly charge cards.
- Establishment fee. Some corporate credit cards may charge an establishment fee when your business applies and is approved for the account. This could be as much as $300, depending on the card.
- Exclusive business rewards. Business credit cards can provide access to exclusive rewards benefits that are outside the scope of personal credit card users. Other rewards perks can include free delivery and express shipment.
- Online business banking. Business credit cards usually give you all the access you would expect from banking online, such as 24/7 access to your account plus business security options such as encryption technology for peace of mind. Business applications may also allow mobile management so you can bank on-the-go with your business.
- Complimentary insurance. Many business credit cards include complimentary travel insurance and liability insurance for the account.
- Expense management systems. Keeping on top of business expenses and consolidating your credit card transactions can be difficult amongst the other million tasks involved in running a business. Expense management systems give you control and simplicity, providing an all-in-one solution for:
- 24/7 monitoring, budget tracking by creating standard or custom reports, clear visibility of company spending and recognising patterns to better manage cycles in spending.
- Multiple reporting formats including MYOB, Microsoft Excel, Word, PDF, HTML, XML, CSV and Tab-delimited.
Pros and cons of business credit cards
- Potential tax deductions for claiming a business credit card or charge card annual fee
- Simplified book-keeping/accounting process
- Expense and cashflow management
- Liability options
- Security features
- Customisable credit limits
- Builds business credit
- Additional cardholders
- Complimentary extras specifically designed for businesses
- Available and issued as either Amex, Visa, Mastercard or Diners Club card
- Requires an excellent credit score
- Personal liability options can expose you to legal issues
- Expensive fees
- Interest charges if you carry a balance
- Can be hard to keep track of employee spending if you’re a small business
- Limits spending to business expenses only
How to apply for a business credit card
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:
- Age. You must be at least 18 years of age to apply for a business credit card in Australia.
- Residential status. You'll usually need to be a citizen or permanent resident of Australia to apply. Make sure to confirm the card's specific residential status requirements before you apply.
- ABN. You must have a valid ABN (Australian Business Number) to apply.
- Credit score. You must have excellent credit history to apply for a business credit card.
Necessary documents and information
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:
- Contact details. Contact details for you and/or your business.
- Proof of identification. A valid form of identification, such as your driver’s licence or passport.
- Financial information. You'll need to provide information about your income and/or revenue as well as any assets and liabilities, including investments, debts and regular expenses.
- Additional cardholders. If you wish to manage your employee's spending under the one account, you'll also need to provide the details of any supplementary cardholders.
- Accountant's information. If you're self-employed, you may be required to include your accountant’s contact information.
- Other documents. Supporting documentation such as personal tax statements, pay slips and BAS reports may also be required.
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.
Frequently asked questions
Does my business credit card come with travel insurance?
Some business credit cards come with complimentary travel insurance, but you will need to check this information for specific cards 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.
How does a business credit card differ from a personal credit card?
As the name suggests, the features of a business credit card are much better suited to that of an organisation than a personal credit card. Business credit cards are available as Visas, Mastercards, or American Express cards, but he credit limit, purchase restrictions and features are designed to complement the financial needs of a business. As a result, you may find that the features of a personal credit card are insufficient for your business.
How much can I balance transfer to a business credit card?
Credit card companies generally allow between 80-95% of the approved credit limit for balance transfers. The specific amount will depend on your application, credit history and the bank's lending criteria.
How many additional cardholders can I get?
Business credit cards can generally support up to 99 additional cardholders. To find out how many cardholders your credit card allows, refer to our individual reviews of cards.
Are business credit cards eligible for instant approval?
Most business credit cards will not be eligible for instant approval as there is typically increased risk for business lending.
Are the rewards for business credit cards the same as for personal credit cards?
The rewards available for redemption can vary between business and personal credit cards and the number of points earned per dollar can also vary depending on the type of business credit card and personal credit card you are comparing.
Are there tax implications for earning frequent flyer points with a business credit card?
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.