Business credit cards are designed to suit the financial needs of different types of companies, ranging from small start-ups 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 credit card is right for you. You can use this guide to compare business credit cards and learn more about the features and benefits available so that you can find an option that suits the needs and objectives of your business.
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 may be liable for the debt on a business credit card, not the individual.
What are business 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.
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 of 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. 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:
Personal liability credit cards
The 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.
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.
Are there any business credit cards for bad credit?
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:
Talk to your current bank. If you already manage your business transactions with a specific bank, call them and ask about your options in terms of credit cards, loans or overdraft accounts. With existing details of your business, the bank may be able to offer you a solution that suits your financial situation and business' needs.
Consider a personal credit card with a low minimum income requirement. While you may not currently be able to get approved for a business credit card, you could look at getting a personal card that has a minimum income requirement ranging from $15,000 to $25,000. These cards typically offer features and credit limits that someone who earns the minimum will be able to manage. So if you have bad credit but earn more than the minimum required for the card, you could still get approved.
Look at business loans and line-of-credit options. A business loan or line of credit typically offer set repayment terms to help reduce the risk to lenders. You can also get a secured business loan that is guaranteed by an asset or assets that you already have. So in some cases, these options may increase your chances of getting approved.
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 fits with your existing business spending. This means you'll need to look at a range of factors, such as:
Additional cardholder spending
Business travel needs
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.
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 may be charged a fee. 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 cash flow management
Customisable credit limits
Builds business credit
Complimentary extras specifically designed for businesses
Available and issued as either Amex, Visa, Mastercard or Diners Club card
Personal liability options can expose you to legal issues
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. You must also usually be registered for GST.
Minimum annual turnover. Most business credit and charge cards have a minimum annual turnover requirement.
Credit score. You must meet the credit history requirements 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 employees' 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
In order to choose a business credit card that suits your company's needs, you'll need to consider a range of different factors to help you narrow down your options. These will vary depending on your business and individual needs but could include:
Whether you want a card with business liability or personal liability for the account
How much you plan to spend on the card
If you'll be the only one using it or if you want to get additional cards for employees
If you want to earn rewards for your business spending
If you want complimentary insurance or other perks
The banking services and features you want access to
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 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 business line on 13 72 26.
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.
As the name suggests, the features of a business credit card are much better suited to the needs of an organisation than a personal credit card. Business credit cards are available as Visa, Mastercard or American Express cards, but the credit limit, purchase restrictions and features are designed to complement the financial needs of a business. You may find that the features of a personal credit card are insufficient for your business.
Credit card companies generally allow 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.
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.
Most business credit cards will not be eligible for instant approval as there is typically increased risk for business lending.
The rewards available for redemption can vary between business credit card and personal credit card accounts. 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.
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