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Selecting the Right Business Credit Card for your Business

Business credit cards provide cardholders with a simple and convenient way to pay for business goods, expenses and services using a credit facility. They're different from personal credit cards in a few key ways. For example, they're issued on a company's credit rating rather than an individual's credit rating, and they tend to have spending limits and controls on things like cash withdrawals from ATMs.

There are generally two main types: business credit cards and business charge cards. With credit cards you can make a minimum payment and carry the payment overflow forward to the following month. Card companies then charge interest rate on this overflow. Business charge cards are cards where the entire account balance is settled each month by direct debit so that no interest is charge on the balance.

A business credit card is great for any organisation of any type - from multinational and international organisations to small, local businesses. There is normally also a 'lodge account', where you can reduce costs and allows control over corporate travel policy. The benefits for any business include:

  • Financial management: These types of cards can dramatically improve financial control, with many now offering complimentary management and reporting services.
  • Reduced dependency: Business cards are great because they reduce the need for cheques and petty cash in day-to-day activities and help eliminate the use of travellers' cheques when travelling abroad.
  • Discounts and rewards - Card companies offer discount rates on many products and services.
  • Business cards make it possible to add more cards should the business require more cards over time.

With some banks, you are required to hold a current account with the bank, so that you can take advantage of their business card account. Business credit cards come with no liability clauses for fraudulent use, if they are lost or stolen. To protect against unauthorised business transactions some business credit card providers and banks have an online guarantee that covers unauthorised transactions.

If you are looking to increase the efficiency of your company's expenditure, or simply want to lure in new workers with the promise of a company credit card, this solution to credit will ensure that the everyday operation of your business is seamless. Not only this, but it will reduce the pressure that you place on your finance department, who probably already have enough to be getting on with as it is.