Compare business credit cards

A credit card is a way to borrow money. You use a credit card to pay for purchases just like you’d use your debit card. But, unlike a debit card where you spend the money deposited in your bank, with a credit card, you’re actually borrowing the money from a credit provider to pay for your purchases.

Credit cards are typically meant for borrowing relatively small amounts of money, usually ranging from $1,000 to $10,000, although credit limits can go much higher for those on high incomes.

Business credit cards work similarly to personal credit cards but are intended for business expenses. They are given to a company rather than an individual and can be used to make purchases, pay bills, and manage cash flow.

When a business applies for a credit card, the issuer evaluates the company's creditworthiness based on factors such as its revenue, credit history, and financial stability. Once approved, the business receives a credit limit, which is the maximum amount it can borrow using the card.

Business credit cards typically come with an interest rate for balances carried over from month to month, although some offer opening periods with lower or no interest rates. Additionally, businesses may be charged annual fees for card ownership, though these fees can often be offset by rewards and benefits.

Business owners can issue cards to employees, allowing them to make purchases on behalf of the company within some spending limits. This helps in tracking expenses and simplifies process.

Many business credit cards offer rewards programs tailored to business spending, such as cashback, travel rewards, or points that can be used for business-related expenses.

Credit cards give you more flexibility in borrowing money. Instead of getting a lump sum of cash with traditional loans, credit cards give you a set amount of credit, and you can borrow as much as you need, within that amount.

You can then choose to pay off the balance straight away, or in monthly instalments. If you pay via installments, you may have to pay interest on what you owe. Bear in mind, the longer you take to repay the amount, the more interest you might incur.

Business credit cards are specially-tailored to the unique needs of business owners. They make it easier for small business owners to separate business transactions from personal transactions giving them more control and visibility over the business’s spending. Some business cards may also offer rewards you can use for virtually free travel, expense management, and credit to grow your business.

Business credit cards offer several pros and cons, which can vary depending on the specific needs and circumstances of each business.

Some pros include:

• Convenience: Business credit cards provide an easy way to separate business expenses from personal finances, simplifying accounting and financial management.
• Cash flow management: They offer access to short-term financing, allowing businesses to manage cash flow and cover expenses during slow periods.
• Employee spending control: Business owners can issue cards to employees with preset spending limits, allowing better control over company expenses.
• Rewards and perks: Many business credit cards offer rewards programs, providing potential cost savings or additional benefits.
• Building credit: Responsible use of a business credit card can help establish and build the credit profile, improving access to funding and favourable terms in the future.

However, business credit cards also come with a few cons:

• Interest charges: Carrying a balance on a business credit card can result in high-interest charges, potentially increasing the cost of financing.
• Annual fees: Some business credit cards come with annual fees, which can add to the overall cost of card ownership, especially if the benefits and rewards don't outweigh the fees.
• Temptation to overspend: Easy access to credit may tempt businesses to overspend, leading to financial strain and debt build-up.
• Limited acceptance: Depending on the issuer and network, business credit cards may have limited acceptance compared to personal cards, especially for international transactions or with certain vendors.

• Flexibility: A set credit limit can give you great control over how much your business can borrow. Some business cards offer longer payment terms and no preset spending limits boosting your cashflow and helping you focus on growing your business.
• Increased visibility: Business cards help you streamline your business transactions and financial information. You can keep a track on your spending and use this information to manage your future transactions better. Business cards can be very helpful to demonstrate your business’s financial health for future borrowings.
• Employee expense management: Some business cards can allow you to take out one or more employees’ cards. This is especially helpful in avoiding delays in payments and purchases for the business. You can manage the transaction history keeping track of all spending.
• Business features: Business card providers may also offer business owners access to resources geared towards helping the business grow such as cashflow tools and business insights.

When applying for a business card, you might need to fulfil some criteria.

Personal criteria:

• Be over 18 years of age
• Be an Australian citizen or permanent resident
• Have a good credit history with no record of bad debt or payment default

Business criteria:

• Have an annual revenue of $75,000 or more
• Have a valid ABN registered for GST
• Have been trading for 12 months or more

Eligibility criteria specific to AMEX business cards

Whether you can get a business credit card with bad credit depends on several factors. Generally, business credit card issuers assess the creditworthiness of the business itself, rather than only relying on the personal credit history of the business owner. However, if your business has poor credit, it may be challenging to qualify for a traditional business credit card with favorable terms.

Some options may still be available, such as secured business credit cards or business credit cards designed for those with less-than-perfect credit. Secured business credit cards require a cash deposit as collateral, which reduces the risk for the issuer and may increase your chances of approval, even with bad credit.

Alternatively, you might explore building or improving your business credit before applying for a business credit card. This could involve timely payment of existing business debts, establishing positive trade credit relationships with suppliers, or applying for a small business loan to demonstrate responsible credit usage.

Spending Limit:

A credit card has a pre-set spending limit unlike a charge card which has no pre-set spending limit. However that does not mean you can spend unlimited with a charge card. The amount of purchases you can make with a charge cards are based on several factors and can be adjusted with time.

Repayments:

In the case of a credit card, you can choose to pay the whole balance in one go or make payments over time. There is usually a minimum amount you have to pay at the end of the month and any deferred payments will likely incur interest charges.  In the case of a charge card, you have to make the full payment at the end of each month.

To apply for a business credit card, you typically follow these steps:

• Research: Begin by researching various business credit card options to find one that suits your company's needs. Compare factors such as interest rates, fees, rewards programs, and additional benefits.
• Check eligibility: Make sure your business meets the issuer's eligibility criteria. This usually includes your company's legal structure, annual revenue, and credit history.
• Gather documentation: Collect the necessary documents required for the application.
• Fill out the application: Complete the application form provided by the credit card issuer. Be prepared to provide details about your business, including its name, address, industry, revenue, and years in operation.
• Submit the application: Once you've filled out the application form, submit it to the credit card issuer for review. Some issuers allow you to apply online, while others may require you to apply in person or by mail.
• Await approval: After submitting your application, the issuer will review it to decide whether to approve your business for a credit card. This process may take a few days to a few weeks, depending on the issuer's policies and procedures.
• Receive your card: If your application is approved, you'll receive your business credit card in the mail. Activate the card according to the issuer's instructions before using it for purchases.