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Important: This comparison service is provided by MoneySuperMarket Financial Group Ltd. This company is not a lender, but a finance broker and they compare business credit cards from different providers, aiming to find one that best suits your needs. MoneySuperMarket.com is authorised and regulated by the Financial Conduct Authority under registration number 3157344.
Whether you’re a director of a company or a sole trader, a business credit card allows you to borrow money from the card provider to pay for business goods and services. You agree to repay the loan with interest after some date in the future.
Credit card companies will tell you how much you can borrow and how long it’ll take to pay off the debt. If you make only the minimum payment, the interest rates can be high. New customers sometimes receive 0% interest rates in the first months of their business credit cards – this is to attract new sign-ups.
Small businesses with no credit history often find it difficult to get loans. A business credit card can be a stepping stone and help build their credit score in order to improve their standing. An unexpected expense could present a problem. Thankfully, business credit cards make it easy to accept payment when otherwise you might not be able to purchase at all. Some business credit cards offer introductory offers that allow you to borrow money without paying any interest on the amount for the first few months. This can allow you expensive purchases upfront and then repay them at a later stage. It is important to pay off every last dollar owed on your business credit card by the time the interest-free period ends though. Additionally, you can separate your finances by using a business credit card. This will allow you to spend purchasing goods and services for work in a separate pool from those goods and services used for personal needs.
There are many different types of business credit cards. The most popular types are 0% purchase business credit cards, balance transfer business credit cards, and rewards business credit cards. Choosing the right business credit card involves considering many things like what you use it for, how likely you are to pay your balance off in full, and your credit rating.
Balance Transfer Cards help to consolidate monthly payments and eventually pay off a sting debt. They work the same as a credit card but they have a set time limit on the account, which decreases your monthly payments. You may have to pay a one-time balance transfer fee, usually a percentage of the total you’re transferring over. You should clear the balance before the interest-free period is up or else you’ll have to deal with significantly higher rates or APRs on your business credit card.
Your credit score is an indication of how much debt you have and your ability to manage money. Accessing a business credit rating is relevant for several reasons, for example – financial institutions have their current records on the Internet, so it is easy to compare where difficult terms and interest rates are beneath more competent companies. Personal creditworthiness is attained by looking at the records of your finances on the web and understanding the history of previous credits. Check your credit score and learn tips on how to improve your score here.
You need to be a director of a business or sole trader to apply for a business credit card. You need to have registered the business and started trading. Make sure you have all the business information correct before submitting your application. If your business credit is refused due to minor mistakes, it’s a good idea to wait a little while before filing a second application. Too many applications in a short timeframe can get you classified as a high-risk borrower. Click here to apply for your business credit card.