Business credit cards can be a powerful tool for any business, small or large. They make expense management more convenient, simplify financial reporting, and help separate personal and business finances. Many of the best business credit cards earn rewards, earning points per dollar spent that can be redeemed for flights and upgrades.
![David Boyd of Credit Card Compare](https://finty-ccc.ap-south-1.linodeobjects.com/images/david-boyd-credit-card-compare.width-500.png)
David Boyd, co-founder of Credit Card Compare, explains further, "Choosing a new business credit card involves a comparison of more than interest rates and fees. Look for what rewards program the card is linked with, accounting software integration, reporting tools, and card acceptance. At Credit Card Compare, our goal is to make it easier for businesses to select a card that will maximise value and truly be beneficial while making it easier to manage spend and cash flow."
Benefits of business credit cards
Business credit cards offer a range of benefits that can help your business streamline expense management, earn rewards, and build credit. Consider the following advantages:
- Expense tracking: Business credit cards make it easy to track business expenses, simplifying record-keeping and budgeting processes.
- Earn rewards from business expenses: Many business credit cards offer rewards such as cashback, points for frequent flyers, or discounts on business purchases, providing additional value for your spending.
- Separation of finances: Using a business credit card for company expenses, you can separate personal and business finances. This makes tax reporting and accounting tasks more straightforward.
- Build business credit: Consistent and responsible use of a business credit card can help establish and build your business credit profile, which may be beneficial when seeking financing in the future.
Expert opinion on the best business credit cards
![Andrew Boyd of Credit Card Compare](https://finty-ccc.ap-south-1.linodeobjects.com/images/andrew-boyd.width-500.png)
Andrew Boyd, co-founder of Credit Card Compare, shares, "Our business credit card has been indispensable. I've lost count of the flights, upgrades, and hotel stays booked using points earned from putting business spend through it. We currently use an Amex Gold business card and an Amex Platinum business card."
What to consider when choosing the best business credit card
When selecting a business credit card, it's essential to consider various factors to find the right fit for your business needs. Some key considerations include:
- Rewards: Evaluate the rewards programs offered by different cards to determine which aligns best with your business spending habits and preferences. Many different hotel cards come with status and give you the opportunity to transfer points into your preferred hotel's reward program.
- Annual fees: Consider any annual fees associated with the card and compare them to the potential benefits and rewards you may receive.
- Interest rates: The card's interest rates, especially if you anticipate carrying a balance, are crucial to avoiding high finance charges.
- Additional benefits: Some business credit cards offer perks such as free travel insurance, purchase protection, or airport lounge access with Priority Pass cards. Assess these extra benefits to find a card that suits your business requirements.
![Matt Barrie of Freelancer.com](https://finty-ccc.ap-south-1.linodeobjects.com/images/matt-barrie-freelancer.width-500.png)
Matt Barrie, Chief Executive & Chairman of Freelancer.com, an award-winning Aussie tech entrepreneur, shared his insights on business cards for Australians, "Amex Centurion used to be fantastic, but over the last twenty years has turned into expensive garbage. They've stripped out almost all of the benefits- ability to get into any restaurant in the world, 24x7 concierge, companion flights- and now all you're left with is a $6,500 a year fee for a card where the travel service forgets your passport number, frequent flyer details and quite often to actually book your flight at all. That's despite using them for 20 years. Every single time. That's if you can get in contact with your "account manager", who is more often than not on leave or asleep when you try to contact them while traveling. The gold memberships the card comes with are useful once and constantly getting stripped (the latest being Emirates). The only use left for it is to try perhaps to impress someone at a bar who's never had to put up with their useless service."
Business credit card vs business line of credit
A business line of credit could be another financing option that offers ongoing access to cash flow, depending on your specific funding needs. The features are similar to how credit cards work, although you won't have a physical card with a business line of credit.
Two main types of business cards offer a line of credit: credit cards and charge cards. Unlike personal cards, where charge cards are not widely available, American Express offers a greater selection of charge cards for businesses.
Business credit card vs charge card
Here are some key features of each to help you decide whether a credit card or charge card will be best for your business:
Business credit card
- Fixed credit limit
- Interest charged on card balance after interest-free period (the average credit card interest rate in Australia is 18.23% p.a.)
- Rewards and perks available
Business charge card
- No fixed credit limit
- No interest is charged, but the balance must be repaid in full each statement period (there are also some interest-free credit cards, but most charge interest)
- Rewards and perks available
Choosing between a business credit card and a charge card depends on your business's specific needs and financial management style. If you prefer a fixed credit limit and the flexibility to carry a balance from month to month, a business credit card may be more suitable. However, a business charge card could be a better fit if you want the convenience of no fixed credit limit and are confident in paying off the balance in full each statement period.
How business credit cards can help your business grow
Business credit cards can play a significant role in supporting your business growth and financial stability. Here are ways in which business credit cards can benefit your business:
- Cash flow management: Business credit cards provide a flexible payment option to manage cash flow fluctuations and cover unexpected expenses.
- Access to capital: A business credit card can provide access to a revolving line of credit that can be used for business investments or to seize growth opportunities.
- Building credit history: Establishing a positive credit history through responsible credit card use can improve your business's creditworthiness over time. A good credit history will be useful when seeking business loans.
- Employee spending control: Many business credit cards allow you to set spending limits for employee cards, giving you greater control over company expenses.
Eligibility criteria for a business credit card
Not all businesses will be eligible for a business credit card. Remember that eligibility can also depend on aspects of your business and you as a business owner. Generally, you must:
- Be 18 years old or over
- Be an Australian citizen or permanent resident
- Be a Director or Controller of the business
- Have a valid ABN that's registered for GST
- Have a good credit history with no payment defaults
- Meet the lender's requirement for minimum business turnover
How to apply for a business credit card
You can usually apply for a business credit card online and get a response in 60 seconds. You'll need to have a few key pieces of information on hand:
- Details about your personal income, as well as your business revenue and expenses
- Information on your assets and liabilities
- Your driver's licence or other form of ID
- Details about the ownership of your business as it appears on ASIC (for the Director and/or Beneficial Owner)
- You may also need to provide contact details for your accountant or the company's financial secretary