Mention business credit cards to most people and they will immediately picture some affluent guy in a sharp suit; overpriced briefcase in one hand, mobile phone clamped securely in the other, shouting business jargon. But what are the benefits of actually having a business card and are they any better than standard personal ones? For the most part, business credit cards generally offer the same basic benefits as most personal credit cards – they are a convenient way to make purchases, generally come with interest free time periods and allow you to pay monthly with ease, but business cards do have added advantages.

Small businesses, new start-ups and those who are self-employed may be tempted to get a personal credit card, as they are generally easier to get hold of and offer lower interest rates. The cons of financing your business this way however, are that you may get a smaller credit limit, and it would be very easy to muddle up business and personal spending, making eventually sorting between the two more hassle than it need be.

Currently on offer for small businesses, Barclaycard’s Cashback business card offers up to 3% cash back on all business related spending, which is great if you’re making purchases that are unavoidable anyway. The rates start from 3% for office essentials such as stationary supplies, computer equipment and legal services, 1% on fuel and 0.5% on everything else, up to a maximum of £400 in the year, which may seem small, but for a self-employed individual this could potentially be a very useful reward at the end of the year. Additional perks include purchase protection, warranty extension and reduced rates of up to 55% with the AA. Do look out for the annual fee that usually comes with these credit cards, about £32.

Others may prefer a business card without all the added extras. The Metro Bank, one of the UK’s first new high street banks in over 100 years, offers the most basic, no-frills credit card out there, with very low rates of 13% APR (variable) and 60 days interest free on new purchases. In its simplicity though, there are cons, as you must first be a Metro Bank current account holder and can only apply for a card in branch.

For larger companies, business credit cards offer a simple way of allowing employees to tap into the expense account. The company can decide which employees are given a card, and can also cap the maximum credit limit for each person. It also tidies up most of the administrative stuff; in days before plastic ruled the world, we can only imagine the stress of having employees handing over piles of receipts that had to be sorted, checked and organised; that is of course assuming they hadn’t been lost or damaged along the way. Just remember to take care when doling out cards to staff – there is always the danger that an employee might go off the rails and misuse the card, so look out for ones that come with cardholder misuse protection. For the employees themselves, having a business card simplifies things, as they are straightforward to use over the phone and internet, and generally provide an easier way to finance business related expenditures.

A business credit card could also be advantageous if you or your employees are required to travel. Many cards currently available offer decent exchange rates, while having a card is generally the easiest way to make purchases abroad and often include additional benefits such as discounted car hire and hotel rates.

If you or your employees have to travel frequently, it might be worth looking at business cards with benefits tailored towards this particular expense. There are plenty of cards on the market with these types of extras, but Barclaycard’s Platinum Visa Business Card offers enhanced travel insurance, with a list that includes personal liability, cancelled flights and travel accident cover, provided you pay for the entire trip with the card. It’s worth bearing in mind however, that this card comes with a hefty annual charge of £78, requires you to have an expected gross income before you can get it and has one of the highest interest rates at 26.9% APR, although for larger companies, this may just be a drop in the ocean compared with the potential losses that can come from frequent travel.

All in all, business credit cards are a good source of funding for those who can get them, so long as you make sure you shop around and find the best deal for you.

	Written by :
	Jemma is a news & research reporter for compareandsave.com. Having worked as a journalist on a number of personal finance websites; she now spends time researching and commenting on UK personal finance stories and investigating new ways to help our readers save money. For press enquiries, please visit our Media Centre page.