UK Business Credit Cards Compared

Categories of UK business card

UK business cards fall into three main categories. Standard credit cards provide a revolving credit facility, allowing balances to be carried at interest. The cardholder pays at least the minimum each month, with the remainder accruing interest until cleared. Standard business credit cards typically offer up to 56 days interest-free credit on purchases when the full balance is paid by the due date.

Charge cards (often marketed by American Express and some Visa and Mastercard issuers) require the full balance to be paid each month. There is no revolving credit option; failure to clear the balance triggers fees and potential card suspension. Charge cards usually have higher or no preset spending limits, suiting businesses with predictable but variable monthly expenditure.

Prepaid expense cards (often issued by fintech providers such as Pleo, Soldo, and Capital on Tap) are loaded by the business with a fixed amount before use. There is no credit element; the card is debited from the loaded balance. These cards are widely used for staff expenses, project budgets, and team-level spending controls.

Each category fits different operational needs. Revolving credit suits businesses with cash flow gaps between supplier payments and customer receipts. Charge cards suit businesses with steady cash flow and high enough turnover to justify the higher limit. Prepaid expense cards suit businesses prioritising spending controls over credit access.

Credit limits and underwriting

SME credit card limits typically range from GBP 1,000 to GBP 100,000. The limit is set by the issuer based on the company's trading history, turnover, profitability, and (where personal guarantees are taken) the directors' personal credit profiles. Higher limits require corporate underwriting and often security; very large corporate cards above GBP 250,000 typically require relationship banking with the issuer.

Personal guarantees from directors are standard for SME cards, particularly for newer or smaller businesses where the company alone has insufficient assets to support the limit. The personal guarantee can be joint and several where multiple directors are on the card, meaning each is liable for the full balance if the company defaults. Personal guarantee documents should be reviewed carefully; specialist legal advice is recommended for substantial limits.

The FCA Consumer Credit Sourcebook (CONC) applies to consumer credit but not to most business card lending to limited companies. Where a sole trader uses a business credit card, the position is more nuanced; some business card products extend FCA-regulated treatment to sole trader customers under specific terms.

Interest-free period and APR

Most UK business credit cards offer an interest-free period of up to 56 days on purchases, provided the previous month's balance is paid in full. The 56 day figure represents the maximum: a purchase made on day 1 of a statement cycle benefits from 30 days of the cycle plus 26 days to the payment due date. Purchases made later in the cycle have shorter interest-free periods.

Cash advances typically attract interest from the date of the transaction with no interest-free period. APRs on business credit cards typically run from 15 to 30 percent representative APR, depending on the card and the cardholder's risk profile. Cash advance APRs are typically 4 to 5 percentage points higher than purchase APRs.

Late payment fees of around GBP 12 per missed payment are typical. Repeated late payment can trigger penalty rates above the standard APR. Default can also be reported to commercial credit reference agencies (Experian Business, Equifax Business, Creditsafe, Dun and Bradstreet), affecting the company's credit profile.

Rewards and benefits structures

Business card rewards include cashback, air miles, hotel points, and travel insurance. Cashback rates typically range from 0.5 percent to 2 percent on eligible spend, sometimes with higher rates on specific categories (advertising, fuel, business travel). Air miles cards offer rates of 1 mile per pound or higher, redeemable through airline programmes.

Premium cards charging GBP 200 to GBP 500 per year offer higher reward rates plus benefits such as airport lounge access, travel insurance, concierge services, and statement credits with selected travel and dining partners. The arithmetic favours premium cards above a typical annual spend threshold: a 2 percent cashback rate produces GBP 4,000 of rewards on GBP 200,000 of annual spend, comfortably justifying a GBP 300 annual fee.

Reward structures can be capped, tiered, or restricted to certain spending categories. Detailed reading of the card's terms and conditions is essential before assuming the headline rate applies to all spend.

Foreign exchange charges

Standard UK business credit cards typically charge a non-sterling transaction fee of 2 to 3 percent on top of the card scheme exchange rate. For a business making regular overseas supplier payments or international travel, the FX cost can be substantial: a business spending GBP 50,000 per year overseas faces GBP 1,000 to GBP 1,500 in FX charges on a standard card.

Specialist cards such as those offered by fintech providers offer FX at the interbank rate plus a small fee (often 0.5 to 1 percent). For businesses with significant international spending, the FX saving can outweigh other card features.

Some cards offer multi-currency wallets, allowing the business to hold balances in EUR, USD, and other currencies, paying for overseas purchases without conversion. The Open Banking and PSD2 framework underpins many of these multi-currency products.

Expense management features

Modern business cards increasingly integrate with accounting software for automatic transaction sync, receipt capture, category coding, and approval workflows. Major UK accounting platforms (Xero, QuickBooks, Sage, FreeAgent) offer card feed integrations with most established and challenger banks.

Fintech-issued cards emphasise expense management. Capital on Tap, Pleo, Soldo, and others offer features like per-user spending limits, category restrictions, mobile-app receipt capture, automatic VAT extraction, and approval workflows for expenses above set thresholds.

For businesses with multiple employees needing cards, the cost calculation includes per-card fees, the cost of administration time saved by automated expense management, and the cost of any expense management software replaced by the card platform's features. A typical 20-person business can save 10 to 20 hours of finance time per month using an integrated card and expense platform.

Consumer protection differences

Personal credit card holders have Section 75 protection under the Consumer Credit Act 1974 for purchases between GBP 100 and GBP 30,000. Section 75 makes the card issuer jointly liable with the supplier for misrepresentation or breach of contract, providing strong protection against defective goods or services.

Business credit cards typically do not qualify for the same statutory protection. The cardholder agreement may exclude consumer protections; the card scheme rules (Visa, Mastercard, American Express) provide chargeback as the main route to dispute resolution.

Chargeback under scheme rules requires the cardholder to raise the dispute within scheme-specified time limits (typically 120 days from the transaction or expected delivery date). The issuer reviews the dispute, sometimes provisionally crediting the cardholder while investigating. Chargeback is generally less broad than Section 75; it covers fraud, non-delivery, faulty goods, and similar specific categories rather than all breaches of contract.

Tax treatment of card spending and interest

Business card spending is treated as ordinary business expenditure for tax purposes. Allowable expenses (cost of sales, travel, marketing, professional fees, training) are deducted from trading profit, reducing corporation tax (for limited companies) or income tax (for sole traders and partners).

Interest on business card borrowing is deductible against trading profit, again reducing corporation tax or income tax. The deduction applies provided the borrowing was for genuine business purposes; personal borrowing under a business card name does not qualify.

VAT incurred on card purchases can typically be reclaimed where the business is VAT-registered and the input VAT relates to taxable supplies. Receipts must be retained as required by HMRC's record-keeping rules under the Value Added Tax Act 1994.

Application and approval process

Applications are typically completed online, with the business providing: company name and registration number (Companies House), trading address, annual turnover, directors' details and personal credit information for any required guarantees, and bank account details for payment setup.

The approval process for established banks typically takes 5 to 15 working days, with credit reference checks on both the business and the directors. Fintech issuers can complete the process in 1 to 3 working days for straightforward applications, using Open Banking access to bank transaction data for affordability assessment.

Once approved, cards are typically dispatched within 5 to 10 working days. Additional cards for employees can usually be added at no per-card fee (or a small monthly fee per cardholder for some products).

Disclaimer

This article provides general information on UK business credit cards and is not a recommendation of any specific product. Terms and fees change; businesses should check current published terms with each issuer before applying. Tax treatment depends on the business's specific circumstances; specialist accountancy or tax advice is recommended for material expenditure decisions.

Frequently asked questions

Are business credit cards Section 75-protected?

Generally no. Section 75 applies to consumer credit under the Consumer Credit Act 1974 between GBP 100 and GBP 30,000. Business cards rely on chargeback under Visa, Mastercard, or American Express scheme rules for purchase protection. Chargeback covers specific scenarios (fraud, non-delivery, faulty goods) within scheme-specified time limits, typically 120 days from the transaction date.

Do business credit cards require personal guarantees?

Most SME card issuers require directors' personal guarantees, particularly for smaller or newer businesses. The guarantee makes the director personally liable for the balance if the company defaults. Joint and several guarantees apply where multiple directors hold cards. Larger corporate cards may waive personal guarantees for established businesses with strong financial profiles.

Is interest on business credit cards tax-deductible?

Interest on borrowing for genuine business purposes is deductible against trading profit, reducing corporation tax for limited companies and income tax for sole traders or partners. Personal borrowing under a business card name does not qualify. VAT on card purchases is reclaimable where the business is VAT-registered and the input relates to taxable supplies.

Are business and personal credit cards interchangeable?

No. Personal credit cards are usually not permitted to be used for business expenses under the cardholder agreement, although enforcement is uneven. Business cards similarly typically cannot be used for personal expenses. Mixing personal and business spending on the same card creates accounting and tax compliance issues that auditors and HMRC inspectors typically flag.

What is a charge card?

A card where the balance must be paid in full each month, with no revolving credit. Charge cards typically have higher credit limits than equivalent revolving credit cards and suit businesses with steady cash flow. American Express is the largest UK charge card issuer; Visa and Mastercard charge card products exist with smaller market share. Failure to clear the balance triggers fees and potential card suspension.

Frequently asked questions

Are business credit cards Section 75-protected?

Generally no. Section 75 applies to consumer credit under the Consumer Credit Act 1974. Business cards rely on chargeback under Visa, Mastercard, or American Express scheme rules. Chargeback covers specific scenarios (fraud, non-delivery, faulty goods) within scheme-specified time limits, typically 120 days.

Do business credit cards require personal guarantees?

Most SME card issuers require directors' personal guarantees, particularly for smaller or newer businesses. Joint and several guarantees apply where multiple directors hold cards. Larger corporate cards may waive personal guarantees for established businesses with strong financial profiles.

Is interest on business credit cards tax-deductible?

Interest on borrowing for genuine business purposes is deductible against trading profit. Personal borrowing under a business card name does not qualify. VAT on purchases is reclaimable where the business is VAT-registered and the input relates to taxable supplies.

Are business and personal credit cards interchangeable?

No. Personal credit cards typically cannot be used for business expenses under the cardholder agreement, and business cards typically cannot be used for personal expenses. Mixing creates accounting and tax compliance issues.

What is a charge card?

A card where the balance must be paid in full each month, with no revolving credit. Charge cards typically have higher credit limits than equivalent revolving credit cards and suit businesses with steady cash flow.