Best Business Credit Cards for Small Business Owners in the UK

Best Credit Cards For Small Business Owners 1

Running a small business or navigating the world as a sole trader in the UK can be as rewarding as it is challenging. One of the key tools at your disposal to ensure not just survival but prosperity is the savvy use of a business credit card. But with a myriad of options available, how do you pick the one that not only meets but enhances your business operations? This guide dives deep into the best credit cards tailored for small business owners and sole traders like you, focusing on how you can leverage these tools for better financial management and growth.

Key Factors to Consider When Choosing a Business Credit Card

  • Interest Rates: Think of interest rates like the price you pay for borrowing money on your credit card. A lower APR (Annual Percentage Rate) means less money out of your pocket over time, which is crucial if you’re planning to carry a balance. Why pay more when you can pay less, right? Let’s look at how choosing a card with competitive rates can keep your debts manageable.
  • Rewards and Benefits: Do you travel often for business? Or maybe your expenses mainly revolve around office supplies and utilities. If so, a card that offers travel rewards or cash back on office purchases could work like a silent financial partner for you. It’s about aligning your card’s rewards structure with your most common expenses. Who wouldn’t like getting rewarded for their regular spending?
  • Fees: Here’s where the fine print comes into play. Some cards have fees that could nibble away at any benefits if you’re not careful. From annual fees to charges for foreign transactions or cash advances, it’s essential to weigh these against the perks. After all, why let fees eat into your hard-earned cashback or rewards?
  • Credit Limit and Flexibility: How much can you spend each month? Does your business see a boom around the holidays? Cards with flexible credit limits can be a godsend during peak seasons when your expenses don’t fit neatly into the average month. Flexibility can mean the difference between seizing an opportunity or letting it slip through your fingers.
  • Additional Features: Lastly, think about the cherry on top. Some cards offer services like expense management tools, which can streamline how you track business spending, or provide enhanced customer support, which can be a lifeline when you least expect to need it. It’s these features that can turn a good credit card into a great business tool.

Best Credit Cards for Small Business Owners and Sole Traders

Let’s break down the specifics of each card to see which might be the right fit for your business.

American Express Business Gold Card

Best Credit Cards For Small Business Owners 2Key Features:

  • Rewards on Spending: The card allows you to earn 1 Membership Rewards point for every full £1 spent. This can be particularly beneficial for businesses with high monthly expenses as it converts routine purchases into valuable rewards.
  • Sign-up Bonus: New cardholders can earn a welcome bonus of 20,000 Membership Rewards points when they spend £3,000 within the first three months of card membership.
  • Quarterly Bonus: Earn an additional 10,000 Membership Rewards points for every £20,000 spent in a single calendar quarter, making it a strong candidate for businesses that have regular high expenses.
  • Supplementary Cards: Up to 99 complimentary supplementary cards for employees are available, which is ideal for businesses looking to streamline spending and rewards accumulation across their operations.

Benefits:

  • Annual Fee: There is no annual fee for the first year, which is excellent for new businesses looking to minimize initial costs. From the second year onwards, the annual fee is £175, which is tax deductible if the card is used solely for business expenditures.
  • Cash Flow Management: The card offers up to 54 days of payment terms on purchases, providing significant cash flow advantages.
  • Added Perks: Cardholders receive £100 in statement credits annually at Dell (£50 every six months), which can offset some business costs. Additional benefits include travel accident insurance up to £250,000 and purchase protection on goods bought with the card.

Considerations:

  • Card Acceptance: As with many American Express cards, acceptance can be limited compared to Visa or Mastercard, particularly with some suppliers. This means businesses might also need a Visa or Mastercard to ensure they can always make necessary purchases.
  • Full Payment Required: It’s important to note that this is a charge card, requiring the balance to be paid in full each month, which can influence budget management strategies.

How to Apply:

  • Eligibility: Applicants should be over 18, have a permanent UK address, and the business must have a UK bank or building society account with no County Court Judgements against it. There are no specific turnover or profitability requirements, which makes it accessible to a wide range of businesses, including startups.
  • Application Process: The application process is straightforward and can be completed online, often with a response in under 10 minutes.

This card is well-suited to small business owners and sole traders in the UK looking for a robust rewards program combined with flexibility in financial management. The American Express Business Gold Card not only facilitates easier spending tracking and management but also rewards businesses for their regular expenses, making it a valuable tool for any business aiming to maximize their financial operations.

Barclaycard Select Cashback Credit Card

Best Credit Cards For Small Business Owners 3Key Features:

  • Cashback Rewards: This card offers 1% cashback on virtually all your business spending, without any caps, providing straightforward and significant savings.
  • Payment Flexibility: You benefit from up to 56 days of interest-free credit on business purchases, helping manage cash flow more effectively.
  • Additional Cardholders: The card allows for adding multiple cardholders, making it easier to consolidate business spending and benefits under one account.

Benefits:

  • No Annual Fee: The card comes with no annual fee, which is especially beneficial for small businesses looking to minimize overhead costs.
  • Business Rewards Program: Cardholders can access special discounts and cashback offers through the Business Rewards program, including savings on business supplies and services.
  • Purchase Protection and Misuse Insurance: Offers added security by protecting purchases and covering misuse, which is vital for business spending.

Considerations:

  • Foreign Transaction Fees: The card charges a non-sterling transaction fee of 2.99%, so it’s less ideal for businesses that require frequent international transactions unless offset by other benefits.
  • Application Eligibility: Your business needs to have an annual turnover or a business plan showing expected turnover of over £10,000 per year. This requirement makes the card accessible to most startups and small businesses.

How to Apply:

  • Application Requirements: You must be a business owner or director, with all directors and employees over 18 years old. The business must be UK-based and not currently bankrupt or in bankruptcy proceedings.
  • Online Application: The process is streamlined and can be completed online, providing convenience and quick feedback on your application status.

This credit card is an excellent choice for UK small business owners and sole traders looking for an uncomplicated cashback reward system combined with benefits that support business operations. Its lack of an annual fee and straightforward rewards program make it a competitive option for businesses aiming to optimize their spending and savings.

 

HSBC Kinetic Business Credit Card

Best Credit Cards For Small Business Owners 4Key Features:

  • Interest-Free Period: Offers up to 56 days interest-free on purchases if the balance is paid in full and on time each month. This feature is beneficial for managing short-term cash flow.
  • Fees: No annual fee for the first year, making it an attractive option for new businesses or those looking to switch providers without upfront costs. After the first year, the fee is £32 per annum per card.

Benefits:

  • Additional Cards: Extra cards for employees can be obtained without additional annual fees, which simplifies expense management and potentially enhances reward accumulation.
  • Visa Acceptance: Being on the Visa network ensures wide acceptance both domestically and internationally, essential for businesses with travel needs or overseas transactions.
  • Customer Service: Known for strong customer service, which is crucial for resolving any issues swiftly and efficiently.

Considerations:

  • Foreign Transaction Fees: Carries a non-sterling transaction fee of 2.99%, which can add up in costs for businesses dealing frequently in foreign currencies.
  • Cash Advance Fees: Cash advances come with a 2.99% handling fee, which is important to consider if you anticipate needing cash withdrawals.

How to Apply:

  • Eligibility: Available to any business with an HSBC Business Current Account. Ideal for businesses that can benefit from the extensive acceptance and financial tools offered by HSBC.
  • Application Process: Can be done online or via HSBC branches, providing flexibility depending on your preference for digital or in-person banking.

The HSBC Kinetic Business Credit Card is a practical choice for small to medium-sized businesses looking for a reliable and cost-effective credit card solution. With its extended interest-free period and the first year without an annual fee, it offers significant financial management flexibility.

NatWest Business Credit Card

Best Credit Cards For Small Business Owners 5Key Features:

  • Interest-Free Period: Up to 56 days of interest-free credit on purchases if you pay your balance in full and on time each month. This feature helps manage cash flow effectively.
  • Annual Fee: No annual fee for the first year. From the second year onwards, the £30 fee can be waived if annual spending exceeds £6,000.

Benefits:

  • Cashback: Earn 1% cashback at eligible fuel and electric vehicle charging stations, rewarding your routine spending.
  • Flexible Payments: Offers flexibility in payment options, allowing businesses to pay the minimum amount or the full balance each month.
  • Merchant Discounts: Access to Business Savings from Mastercard, providing discounts and rebates on business-related purchases.

Considerations:

  • Foreign Transaction Fees: A non-sterling transaction fee of 2.95% applies, which could add up for businesses making frequent foreign transactions.
  • Cash Advance Fees: A fee of 3% on cash advances, with a minimum of £3, which is important for businesses that occasionally need to withdraw cash.

How to Apply:

  • Eligibility: Available exclusively to existing NatWest business customers, which may limit accessibility for new customers or those with other banking arrangements.
  • Application Process: Applications can be made online through NatWest’s banking platform, providing a seamless integration with existing accounts.

The NatWest Business Credit Card is well-suited for existing NatWest customers looking for a simple yet effective way to manage business expenses. With its introductory offer on the annual fee and cashback on fuel purchases, it presents a beneficial tool for businesses aiming to optimize their spending while enjoying a few perks.

Santander Business Cashback Credit Card

 

Key Features:

Best Credit Cards For Small Business Owners 6

  • Cashback Rewards: Offers 1% cashback on all business spending with no cap, providing straightforward and beneficial rewards on all purchases.
  • No Foreign Transaction Fees: Utilize the card abroad without incurring foreign transaction fees when paying in the local currency, ideal for businesses with international dealings.

Benefits:

  • Annual Fee: There is an annual fee of £30, but it includes the provision of additional cards at no extra cost, which can be a cost-effective feature for businesses needing multiple cardholders.
  • Interest-Free Period: Up to 56 days of interest-free credit on purchases if the balance is paid in full and on time each month, aiding in better cash flow management.

Considerations:

  • Interest Rates: The card has a purchase rate of 18.9% p.a. and a cash transaction rate of 27.9% p.a., with a 3% fee (minimum £3) per cash transaction, which is important for businesses to consider if they require cash access.

How to Apply:

  • Eligibility: Available to small and medium-sized businesses with a maximum of two directors, owners, or partners. All cardholders must be aged 18 or over and UK residents. The business must be based/registered in the UK and not already have a Santander Business Cashback Credit Card.
  • Application Process: Applications must be made through Santander, and all credit is subject to status and credit checks.

The Santander Business Cashback Credit Card is an excellent option for UK-based small to medium businesses looking for a simple yet effective cashback reward system. It’s particularly beneficial for businesses that engage in international transactions due to its no foreign transaction fee feature.

Lloyds Bank Business Charge Card

Best Credit Cards For Small Business Owners 7Key Features:

  • Annual Fee: The card comes with a £32 annual fee per card, applicable from the second year onwards, as the first year is typically fee-free.
  • Spending Limit: Allows for a customizable spending limit, which can be adjusted based on the business’s needs and creditworthiness.

Benefits:

  • Additional Cardholders: The ability to add additional cardholders under the same account, with each card incurring the same annual fee of £32 from the second year.
  • Global Acceptance: The card is accepted worldwide wherever Mastercard is accepted, facilitating business transactions globally.
  • Expense Management: Provides tools to help track and manage expenses efficiently, which is crucial for maintaining budget control.

Considerations:

  • Foreign Transaction Fees: Charges a foreign transaction fee of 2.95% on overseas spending, which can add up for businesses dealing frequently abroad.
  • Cash Advance Fees: Imposes a cash advance fee of 2.5%, with a minimum charge, which is important for businesses that might need to withdraw cash occasionally.

How to Apply:

  • Eligibility: Requires the business to have a Lloyds business bank account. Ideal for businesses looking for a simple way to manage spending and cash flow.
  • Application Process: Applications can typically be made online or through a Lloyds Bank branch, offering flexibility for businesses in how they choose to manage their banking needs.

The Lloyds Bank Business Charge Card is a practical solution for businesses that require a straightforward way to manage business expenses and enjoy global spending capabilities. With its fee structure and additional cardholder options, it’s designed to accommodate businesses looking for flexibility and effective expense management.

Metro Bank Business Credit Card

Best Credit Cards For Small Business Owners 8Key Features:

  • No Annual Fee: The Metro Bank Business Credit Card does not charge any annual fees, making it an economical option for businesses.
  • Interest Rate: Offers a single low interest rate of 18.9% APR (variable) on purchases, which simplifies the cost of borrowing.

Benefits:

  • Free European Transactions: There are no fees for transactions made in most European countries, which is beneficial for businesses that operate within Europe.
  • Instant Card Issuance: Metro Bank provides the convenience of instant card issuance in-store, allowing businesses to have immediate access to their credit facility.
  • Interest-Free Period: Provides up to 56 days of interest-free credit on purchases, provided the balance is paid in full and on time.

Considerations:

  • Foreign Transaction Fees: While transactions within Europe are free, transactions outside of Europe incur a fee of 2.99%, which could be a consideration for businesses with global dealings.
  • Cash Advance Fees: There are additional charges for cash advances, including a higher interest rate and a cash withdrawal fee, which could be costly if frequently used.

How to Apply:

  • Eligibility: Applicants need to have a business current account with Metro Bank to qualify for the credit card. The application process involves visiting a Metro Bank branch.
  • Required Documents: Proof of identity and address are required, and for new customers or certain transactions, additional documentation such as proof of income may be needed.

The Metro Bank Business Credit Card is a straightforward and cost-effective solution for businesses looking for easy access to credit without the burden of annual fees. Its features are particularly advantageous for companies that transact frequently within Europe but remain competitive for those needing wider access due to its straightforward fee structure and the convenience of instant card issuance.

Let’s break down the specifics of each card to see which might be the right fit for your business.

Credit Card Interest Rate (APR) Annual Fee Rewards and Benefits Special Features Foreign Transaction Fee Learn More
American Express Business Gold Card Variable £0 first year, then £175 20,000 bonus points, rewards on all spend 99 additional cards at no cost Limited acceptance, fees may apply More Info
Barclaycard Select Cashback Credit Card Variable £0 1% cashback on all purchases Up to 56 days interest-free on purchases 2.99% More Info
HSBC Kinetic Business Credit Card Variable £0 first year, £32 thereafter Integrated with HSBC Kinetic app Designed for small to medium-sized enterprises 2.99% More Info
NatWest Business Credit Card Variable £30 (waived if spending over £6,000) Cashback on fuel and electric vehicle charging Helpful for managing business expenses 2.95% More Info
Santander Business Cashback Credit Card Variable £30 1% cashback on all business spending No fees on foreign transactions in local currency None in Europe; fees apply outside Europe More Info
Lloyds Bank Business Charge Card Variable £32 per card Facilitates managing company expenses Accepted worldwide wherever Mastercard is accepted 2.95% More Info
Metro Bank Business Credit Card 18.9% APR £0 Free transactions in Europe, Instant card issuance Instant card printing in store, up to 56 days interest-free 0% in Europe, 2.99% outside Europe More Info

Conclusion: What’s Your Business Card Match?

Selecting the perfect business credit card isn’t just about the perks; it’s about finding a match that aligns with your business operations and financial strategies. Whether it’s maximizing cashback with the Barclaycard Select, enjoying the rewards with the American Express Business Gold, or managing expenses efficiently with HSBC Kinetic, there’s a card out there that fits your business needs like a glove.

Remember, while the benefits can be tempting, weigh them against the fees and charges to ensure you’re truly boosting your business’s bottom line. After all, the best credit card for your business should make your financial management easier and more effective—not more complicated. Choose wisely, and watch your business thrive!