Table of Contents
- What are the benefits of business reward credit cards?
- How do business credit card rewards and cashback work?
- How to choose the best rewards credit card for your business
- Pros and cons of business reward credit cards
- Am I eligible for a business reward credit card?
- How to apply for a business reward credit card
- How to use a business reward credit card
- Business reward credit card FAQs
Business reward credit cards are business credit cards that deliver perks as you spend. When you pay for your everyday business expenses using a company credit card you can earn reward points that can be redeemed for vouchers, air miles, or cash back, which is credited directly to your credit card balance or bank account.
What are the benefits of business reward credit cards?
Business reward credit cards have all the same benefits as other types of credit cards for businesses: they can help you manage cashflow and simplify expense management while building a credit history for your business. However, they have the added advantage of rewarding you when you spend, allowing you to earn points or cash back. Whether you use your card to cover everyday expenses, or plan to cover a large cost, these rewards can soon add up.
Broadly speaking, business reward credit cards offer three distinct types of rewards, so it’s wise to think about which will be most useful to you before you apply.
- Cashback rewards: Business cashback credit cards give you a small amount of cashback, usually around 1% of what you spend using your card. This means you can earn a little extra from your everyday spending – and the more you spend, the more cashback you can earn. The cashback you earn is then credited either to your bank account or to your credit card balance.
- Reward points: Some business reward credit cards allocate points as you spend. These can then be exchanged for travel vouchers, hotel room upgrades, rental car discounts, or air miles.
- Business perks: Not all business credit card rewards are linked to points or cashback. Instead, some providers give customers access to specific business perks such as free insurance, software or expense management tools.
How do business credit card rewards and cashback work?
When you spend with your credit card, the card issuer (Mastercard, Visa or American Express) is paid a small fee for processing your payment. When you have a business reward credit card, the lender shares some of this fee with you, via rewards or cashback. Some providers offer introductory offers, where you can earn extra rewards for a set period of time, but others may impose caps on how much you can earn, or have rules about the types of purchases that qualify.
As long as you’re not at risk of overspending, you can maximise your rewards by using your business rewards credit card for everyday spending. However, unless you clear your balance in full each month, you will be charged interest, which could quickly cancel out the value of your rewards.
How to choose the best rewards credit card for your business
Before you apply for a business reward credit card, consider the following to help you narrow down the options and choose the card that’s right for your business.
Cashback rate
The amount of cashback you can earn varies between providers. Some offer a higher rate during the introductory period, while others only offer varying rates on different types of purchases.
Eligible spend
Some providers pay higher rates of cashback on particular categories of business expenses, such as office and trade supplies, utilities, travel and fuel and EV charging costs. Others offer rewards or cashback when you spend with particular retailers or suppliers, while others have no restrictions.
Cashback restrictions and limits
Some providers cap the amount of cashback you can earn each year, while others offer uncapped cashback. In some cases, you won’t be eligible to earn cashback or rewards until you reach a minimum spend.
Fees
Many providers will charge an annual account fee and, in some cases, they will charge this fee to each cardholder. Some providers don’t charge fees at all, including annual fees, foreign transaction fees or ATM fees.
Interest
Always check the representative APR, as these can vary between products and providers. This is particularly important if you expect to carry a balance on your business reward credit card rather than paying your bill in full each month, as this gives you an indication of how much you can expect to pay in interest.
Benefits
Some business reward credit cards offer additional benefits such as free accounting software, expense tracking and management, free insurance, and offers with partner brands.
Pros and cons of business reward credit cards
Advantages
- A business reward credit card rewards your everyday spending with cashback or points, which can be exchanged for vouchers or air miles. This puts a little extra money back into your business.
- Issuing additional company credit cards to your employees can make it easier to manage their expenses – and allow you to earn additional rewards.
- Some business credit card providers also reward customers with perks like free expense tracking and accounting software, or free insurance.
- Business credit cards can help with cash flow by allowing you to spread the cost of larger purchases over a period of time. They typically have higher credit limits than personal credit cards, which means you can cover more substantial costs.
- Using a business credit card is a simple way to keep business and personal finances separate, making it easier to keep track of expenses.
- Managing your business reward credit card well, and paying off your balance in full each month, indicates that your business is a reliable borrower. Over time, this should help to boost your business credit score, giving you access to better deals in the future.
Disadvantages
- Some of the best business reward credit cards may charge substantial annual or monthly fees, which may be applied to each cardholder.
- The interest rate on a business credit card is likely to be higher than a personal credit card. Unless you can clear your balance in full each month, this can be an expensive way to borrow.
- Unless you’re able to clear your balance in full each month, the amount of interest you are charged could quickly cancel out the value of your cashback or rewards.
- Your business is likely to need a good credit score in order to be accepted for the best business reward credit cards. This means it could be harder to get one if your credit score is poor, or if you haven’t been trading for long.
- Unlike personal credit cards, business reward credit cards aren’t covered by Section 75 of the Consumer Credit Act, which protects purchases between £100 and £30,000 if something goes wrong. However, some providers do offer both fraud and purchase protection.
Am I eligible for a business reward credit card?
You can apply for a business reward credit card if you’re a business owner, sole trader, partner or director of a limited company. Bear in mind that some providers don’t accept sole traders, and others may require a minimum business turnover. You might also find it harder to qualify for a business credit card if you have a poor business credit score, or if you have a start-up or a new business. In this situation, lenders often check both your personal and business credit scores to build up a better picture of your creditworthiness.
How to apply for a business reward credit card
In most cases, you can apply for a business reward credit card online. Depending on the provider, you may also be able to apply over the phone or in person at a branch of the relevant bank. You can usually check your eligibility before you apply, which gives you an idea of how likely you are to be accepted. It’s wise to do this because it won’t affect your credit score and reduces the risk of an unsuccessful application – which could hurt your business’s score.
You will need to supply the following information so that the provider can run a credit check:
- Your name, address, date of birth and contact details
- Your business’s legal name, registered address and company registration number
- Your average monthly turnover (or estimated turnover if you have a new business)
- Your bank details
When you apply online you may get a decision within minutes, but it can take a week or two if the lender needs to confirm the details of your business.
How to use a business reward credit card
The following tips can help you make the most of your business rewards credit card:
Pay your bill in full each month
The value of any rewards you earn will probably be wiped out by any interest your provider charges if you don’t pay your bill in full. Ideally, set up a direct debit to repay the full amount each month.
Use your business reward credit card to cover your everyday spending
Maximise the rewards you earn by using your card to cover everyday costs, from office supplies to fuel and expenses. Just take care not to overspend, and ensure you can clear your bill each month.
Boost your rewards
Depending on the provider, you may be able to earn additional rewards or cashback by spending with particular suppliers, or within a set period of time after opening your account.
Check for restrictions on rewards and cashback
Depending on the provider, you may be able to earn additional rewards or cashback by spending with particular suppliers, or within a set period of time after opening your account.
Business reward credit card FAQs
Yes, some business credit card providers offer rewards or cashback. Some allow you to earn points or cashback on everything you spend, and others give you the opportunity to boost your rewards during an introductory period, or when you spend with particular suppliers. Bear in mind that there might be a minimum spend required before you can earn rewards, and some providers cap the amount of cashback or rewards you can earn each year. Always check the terms and conditions to make sure the rewards will suit your business’s needs.
This depends on your business needs and how you plan to use the card. For example, you may prefer cashback rewards, which can be credited directly to your balance or bank account. Alternatively, points which can be converted to air miles could save you money on travel. Before you apply, always check if there’s an annual fee or any other charges, such as foreign transaction fees, and pay close attention to the APR if you don’t expect to clear your balance in full each month.
Many of the best business reward credit cards offer cashback, but some providers are more generous than others. Always check if there’s a minimum spend before you can start earning cashback, and if the amount you can earn is capped. You may benefit from an introductory offer which boosts the cashback you can earn for a set period, or you may be able to earn more cashback on some types of transactions, such as fuel or EV charging costs, or when you spend with particular retailers or suppliers.
According to HMRC, most business credit card rewards, including cashback, air miles and vouchers, are not taxable. However, this sometimes depends on the way that your business is set up, so it’s wise to check with your accountant or financial advisor.
In order to be eligible for a rewards business credit card you need to be a business owner, a sole trader, or a partner or director of a limited company. However, eligibility requirements differ between providers, which means that some won’t accept sole traders and may stipulate a minimum business turnover. You may also find it harder to qualify for a business rewards credit card if you have a start-up or new business, or have a poor credit history.
This varies between providers. Some business reward credit cards will charge an annual or monthly fee, which may be applied to each cardholder. Some will also charge foreign transaction fees. Unless you can clear your balance in full each month, you will also be charged interest. However, some providers offer an interest-free period for a set time after signing up.
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