Business Credit Cards

For many businesses using a credit card is a convenient and flexible option.
By using cards small-business owners do not have to carry large sums of
money or a company chequebook. Employee purchases can be effectively
managed by using company credit cards and a spending limit can be
pre-approved.

When using the credit or charge cards to cover business expenses, the bill does not need to be settled immediately. There is normally an interest-free period of around a month, depending on the card issuer. However, if only part payment, is made interest is usually charged at a high rate. Credit cards vary between banks and they offer different terms and conditions and ways to pay off the balance.

Using plastic to make business purchases offers a number of benefits:

  • Cards are quicker and cheaper to use than the company chequebook and are useful for everyday expenses.
  • They are also recognised globally. Using cards for international purchases sometimes offer better exchange rates and reduces the need to change cash before travelling.
  • Credit cards also allow access to cash which is useful if invoices are being paid late.
  • With a company credit card, one bill is paid each month, no matter how many purchases have been made. Receiving monthly statements helps with business accounting and administrative procedures. As purchases are specified business expenses can be distinguished from personal expenses.
  • Some card providers may produce an annual expenditure report and a breakdown of the VAT charged on purchases.

However, there are disadvantages in using credit cards. Although a set maximum spending limit can be placed on the cards issued to employees, it does mean that sums of company money can go unchecked.

As with any credit card there is the risk of card fraud and debt. As credit cards offer periods of interest free credit it can be tempting to spend over budget. Interest charges on credit cards and missed payment fees can easily mount up.

Are you looking for general advice or other information regarding Home Insurance? You may wish to consult our advice guide.

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Applying for Credit Cards

Caution: Remember that every credit card application you make will result in a credit search being conducted. We do not advise you to apply for more than one credit card at a time. If your application is declined, we would suggest waiting at least three months before applying for a different card.