Business Credit Cards

A business credit card is something all businesses should consider applying for.

Using a business credit card can improve your cashflow by giving you an interest-free period between when you make a purchase using the credit card and when you have to pay for it.

Your accounting and record keeping becomes simpler too, because you no longer have to worry about keeping track of purchases made personally on behalf of the business and remembering to reimburse yourself.

One of the best known business credit card provider is American Express. They offer a range of credit card solutions for businesses of all sizes, as well as for individuals. Full details of all their credit cards can be found by clicking here.

The main drawback of American Express is that a number of smaller shops and other retailers do not accept American Express due to the fact that they charge their merchants higher fees than some other card providers.

So, whilst an American Express card is fine if the bulk of your business purchases are from large companies, you might want to consider applying for a secondary card from another bank, just in case you need to buy something from someone who doesnít take Amex.

NatWest offer a business credit card which is accepted in over 900,000 outlets in the UK and by over 30 million retailers worldwide.

It also offers up to 45 days interest-free credit and has some additional features such as travel accident insurance and an online spending analysis facility.

For more details, click here.

The main drawback with business credit cards from some of the high street banks is that you need to have your business bank account with them in order to apply for one of their business credit cards. There is no such similar restriction with American Express.

If you donít want to apply for a business credit card, another option is to get yourself a new personal credit card that you use exclusively for business purchases. That way it is still relatively easy to keep your business and personal transactions separate and be able to see easily how much the business needs to reimburse you for at the end of each month.

For full details, click here.

Details of other personal credit cards can be found at MoneySupermarket.

If you are running your business as a limited company, the downside of using a personal card for business purchases is that you will need to declare all the amounts you receive back from the business on your P11D form each year. This is because, technically, these amounts count as benefits in kind which are liable to tax. The tax liability can be avoided by claiming an allowance for these items on your self-assessment form. So, although you donít lose out by using a personal credit card instead of a business one, it does give you a bit of extra work on the paperwork front.

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