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Business Services
> Credit Cards - UK Guide
In a nutshell
Credit cards issued specifically for business use.
Best Credit Card For
Businesses of any size and their employees.
Credit Amount
Your overall credit limit as a business entity will depend on factors such as your card provider, your business, its financial standing and your corporate needs. If you are giving out credit cards for employee use you can specify pre-set credit limits with your card provider to manage their spending. Some business credit cards may come with no set limit.
Advantages
Using business credit cards can be a good way of controlling and managing overall business spending and that of individual employees. It's simply much easier from an administration and financial perspective to manage your outgoings via monthly statements than it is to try and juggle expenses claims etc.
Credit cards do not need to be paid off immediately and the period of grace you get after a purchase before payment is due can be an advantage too in terms of cash flow management. And, credit cards are simple and easy to use and are accepted all over the world - which is useful if you're doing international business or have staff that travel abroad. A business credit card can also be used as an employee 'perk'. It's a sign of trust and commitment giving a card to an employee. It also allows them to spend (i.e. on corporate entertainment etc) on behalf of the business without having to pay from their own pocket and be reimbursed later.
What to look out for
Business credit card spending is no different to personal credit card spending. It can be all too easy to spend more than you need to and you'll have to pay interest at relatively high rates if you don't settle your bill in full every month. The difference here is that it's your business that may suffer if you get into serious debt problems.
You'll probably spend more on your business card than on a personal one - if you don't pay it off in full every month, interest can be added at surprisingly high rates and your debts will mount up extremely quickly. And, if you forget payments, you'll be charged penalties and could affect your business's credit rating which could cause you severe operational damage. Some people find that they have problems with employee credit cards. Although you can set pre-determined credit limits, you may have no real idea what your employees are using their cards for unless you set up internal restrictions and rules. And, giving a business credit card to an employee could leave you open to fraud if they misuse their card. People also don't tend to be as careful with business credit cards as they are with their own cards - so you may also have problems with external fraud if they don't take care.
Alternatives
This is the best general credit card option for business use. You could look at a business charge card as an alternative although you have to pay off any balances in full every month with that option.
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