What are business credit card expenses?

Business owners looking to curtail the spiralling inflation-related cost of doing business can attempt to better manage business expenses by comparing the market with Funding Options.

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What are business credit card expenses?

Business credit cards are a convenient way for employees and directors/owners of the company to pay for business expenses. Business owners can provide secure, transparent, and easy access to petty cash for operational costs. Indeed, credit cards for business purposes allow multiple personnel to hold cards, and if anything goes wrong, every other card on the account will be frozen. This is the case if different employees have separate business accounts.

Spending limits can be set for each card. For example, you might want your head of sales to have a limit of £20,000 to cover business travel and client hospitality. The limit for less senior employees can be set to a lower threshold. Remember that unpaid credit card balances will most likely be considered debt if your business applies for funding in the future.

What are the benefits of using business credit cards for expenses?

There are many advantages to using a card to pay for business expenses. Many business owners appreciate that it centralises operating expenses' management and administration. Instead of an administrator or the company accountant having to handle swathes of receipts and expense claim forms to prepare the monthly accounts, a business has the power to issue multiple corporate credit cards to key staff members and then manage these expenses through accounting software. 

Some of the other key benefits include:

  • Staff don't have to be responsible for holding cash

  • Less administrative overhead for the finance team

  • Better security — fraud protection

  • Cash flow

     — access to funds within your limit at any time

  • Increased efficiency

  • Separate business and personal expenses

What are employee expenses?

As a business owner, you might pay an employee's expenses to cover several different costs incurred in the normal course of business. These expenses can be reimbursed if:

  • the employee incurred the expense exclusively and necessarily in the performance of their duties

  • expenses are reimbursed via vouched receipts or a credit card for business expenses.

According to HMRC, employees also include directors of your company.

The most frequently used expense type for employees is business travel, which covers the cost of travel, meals and accommodation. 

You are entitled to reimburse employees for travel-related expenses tax-free in the following circumstances:

  • The employee is required to be away from their normal place of work to carry out their job.

  • Travel expenses must be incurred to carry out the necessary duties of employment.

  • Subsistence expenses should be incurred due to travelling to perform the normal employment duties.

How are business credit cards different from normal credit cards?

Even though company credit cards function the same way as personal cards, some differences are worth noting. First, you can borrow more with a business credit card because it is based on the cash flow of your business, not personal finances. A business credit card can even help you to build your company's credit score, which can help you to access loans or credit lines in the future.

What types of business expenses can you use a business credit card for?

Business owners can allow employees to use credit cards for anything from office suppliers, client expenses and the following:

If you are in a position to repay the balance at the end of the month, you could allow employees to use these cards for large purchases instead of taking out a short-term loan. However, remember that if there is any unpaid balance on any card at the end of the month, you will be liable for high-interest rates. The risk of not paying off the balance in full puts many businesses off using credit cards for expensive purchases, even though cards offer convenience. Fees, penalties, and interest charges might be a reason to apply for alternative funding

Who is eligible for a business credit card?

As a sole trader or owner of a small business, you will have no problem applying for a business credit card to pay for day-to-day expenses or ad-hoc acquisitions. Usually, there is no minimum amount in company revenue to qualify, but you will need to be a registered business in England, operating in a recognised industry. High street banks and lenders will offer different products and perks to other companies depending on some or all of the following factors:

  • Startup or established business

  • Company with sales of up to £3 million

  • Company with sales of £3 million+

  • International businesses

  • Financial services industry

It's important to know that business credit cards, which you intend to use for company expenses, are only available if you are over 18 years old and are a UK resident. Your business must also be registered in England. Sometimes, cards are only available if you also open a current account with the provider. 

Best business credit cards in the UK

Here is a short list of the top business credit cards for expenses in different categories.

Best for points

The American Express Business Gold Card Annual fee — £175 Variable APR n/a (charge card) Perks — Earn membership rewards points with a welcome bonus

Looking for finance?

Let us help you find the best financial product in the market. We will guide you through the whole process and make sure you get the best deal.

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Best for cashback

Barclaycard Select Cashback credit card Annual fee —£0 Variable APR 21.9% Perks — 1% unlimited cashback

Looking for finance?

Let us help you find the best financial product in the market. We will guide you through the whole process and make sure you get the best deal.

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Best for low fees/APR

Capitalontap credit card Variable APR 9.9% Perks — 1% unlimited cashback

Looking for finance?

Let us help you find the best financial product in the market. We will guide you through the whole process and make sure you get the best deal.

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Best for basic

American Express Basic Business Card Annual fee —£0 Variable APR 0% Perks — no annual fee

Looking for finance?

Let us help you find the best financial product in the market. We will guide you through the whole process and make sure you get the best deal.

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Best for managing spend

RBS Business Plus credit card Annual fee —£70 Variable APR 29% Perks — up to 2% cashback

Looking for finance?

Let us help you find the best financial product in the market. We will guide you through the whole process and make sure you get the best deal.

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Best for a small business

Annual fee —£30 Variable APR 23.7% Perks — 1% unlimited cashback

Looking for finance?

Let us help you find the best financial product in the market. We will guide you through the whole process and make sure you get the best deal.

See your Funding Options

Business credit card alternatives

There are many alternatives to business credit cards, including, but not limited to:

Revolving credit facilities — a business credit line that provides consistent and pre-approved funding so you can easily access funds. 

Unsecured lending — if you don't need the flexibility that a revolving credit facility carries, unsecured business loans might be a cheaper way of accessing funding. Like credit cards and credit lines, they're unsecured, but by using a fixed term, interest rates can be as low as 7–15%

Merchant cash advance — this is a revenue loan, where a lender looks at your recent customer card transactions and lends an amount based on this, which you repay as a percentage of card sales via the card terminal.

Invoice finance — allows you to 'sell' or discount your unpaid invoices to a lender, who will advance you most of the value immediately.

How do I get a business credit card for expenses?

Funding Options helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options can introduce applicants to a number of providers base b d on the applicants' circumstances and creditworthiness, with all quotes being subject to status and income.

Our award-winning platform, Funding Cloud(™), accurately and quickly matches businesses with the right lender and finance option for their needs. From unsecured business loans to revolving credit facilities and a merchant cash advance, we work with over 120 lenders offering dozens of lending products. Apply for funding in minutes - our record from application to credit approval is just 20 seconds, and cash in the bank within as little as 18 minutes. 

Apply today to get the funding you need to trade, plan, and grow with confidence.

Get a business credit card

Business Credit Cards

Check your eligibility with our online form without affecting your credit score.

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