The Best Business Credit Card for Making Purchases

Having a business credit card speeds up the payment process, improves your record-keeping and can even help you earn rewards. And there’s an ever-evolving choice of business credit cards out there. So, what’s the best credit card for business purchases? And which card has the best mix of features?

Why use a business credit card?

Think about how many purchases you make in an average week; there are software subscriptions to pay, inventory items to purchase and operational expenses to cover. That’s a lot of financial admin to fit into your week, not to mention the ongoing pressure on your cash flow.

Having a business credit card can help you cut down the workload and keep track of your spending. And by making use of the available credit, you also improve your cash-flow position.

And the benefits don’t stop there. 

The benefits of using a business credit card

Let’s explore the major plus points of using a credit card: 

• Expense tracking: All your business expenses can be tracked through your credit card transactions. This improves your recordkeeping and audit trail. It also simplifies your tax reporting, giving you a clear separation between your personal and business expenses.
• Credit building: Lenders and credit providers prefer lending to businesses with a good credit score. Regular use of a business credit card boosts your business’s credit score, by showing that you’re creditworthy and capable of good financial management. 
• Perks and rewards: Many business credit cards will offer rewards, to add some sparkle to their card offering. Earn cashback, travel points or discounts on recurring expenses like fuel and office supplies, turning your purchases into perks.

The risks of mixing personal and business credit

You’re the business owner and have your own personal credit card. So, why do you need a separate business credit card? If cash is tight at month-end, surely you can just pay a few supplier bills on your personal credit card? 

Using your personal credit card for business purchases is all too common. But here are a few good reasons for keeping those personal and business transactions separate. 

• Risks of misreporting expenses: It’s good practice to make sure all your expenses go through the company books. This way, nothing gets missed and you have a full and complete record of every expense, for reporting purposes. 
• Complications during audits: Gaps in the company accounts and bookkeeping will raise alarm bells. Your auditor is likely to ask for your personal bank statements to verify the transactions, slowing down the audit and making your personal transactions public. 
• Lack of liability protection: The company, as a single legal entity, is liable for any purchases made. But if you make the purchase on your own card, you’re the buyer and legal entity. This makes you liable for the payment, debt and other considerations. 

Top business credit card recommendations by category

Using a business credit card for purchases gives you detailed records and full reporting of every expense across the business. This detail can be invaluable.

You might be using your card to pay fuel bills for the company fleet, or to make overseas purchases from international suppliers. Whatever the purchase, having this digital breadcrumb trail helps you keep spending under control and see where money is being spent.

Now, let’s run through some top picks for business credit cards, and how they can benefit your business across different operational areas:

1. Best credit card for fuel purchases

Monitoring your fuel costs when you run a fleet of vehicles is a must. With a credit card that’s designed for fuel payments, you can track your fuel expenses while also reducing your costs.

The Allstar Plus Fuel Card is a 2-in-1 card that combines a business credit card and a fuel card. It’s accepted in 90% of UK fuel sites and could help you save £0.08 per litre on purchases of diesel. It also offers 44 days of interest-free credit, so it’s a great way to combine the convenience of a fuel card with the repayment and cash-flow benefits of a VISA credit card.

2.  Best credit card for inventory purchases 

Keeping your inventory stocked up is a significant cost. So, access to a card with high credit limits and flexible repayment options is ideal. 

The Capital on Tap card is one of the best business credit cards for purchasing inventory. It gives you a credit limit of up to £250,000 with no annual fees and rates can be as low as 14.95% APR, making repayments easier to manage. You can also earn 1% cashback on all purchases, giving your cash flow a healthy boost as you restock your warehouse. 

3. Best credit card for international purchases 

Having purchasing power in foreign currencies helps you do business in an international market. But it’s important to keep foreign transaction fees low and to have multi-currency support.

So, what’s the best UK business credit card for international purchases? A card like the Metro Bank Business Credit Card is a sensible option, offering one rate of 18.9% APR, no annual fees and free transactions for purchases made in European countries that are part of the Single European Payments Area (SEPA).

Multicurrency debit cards like those offered by Wise and Revolut are also an option, if you have the liquid cash available and don’t need the credit facilities of a credit card. 

4. Best credit card for online purchases 

With so many transactions being made online, it’s vital to have a business credit card that offers good purchase protection and fraud protection. 

The Capital One Mastercard is a practical choice for online purchases, offering Section 75 protection on most spends between £100 and £30,000 and around-the-clock fraud protection. You also get up to 56 days interest-free on all new spends, so long as you pay your balance off each month, helping you to spread the cost of your online purchases.

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Key features to look for from your business credit card

There’s a huge range of different business credit cards, all with their own specific benefits. But narrowing down your choice of card can take some effort. Here are a few key features to look out for when you’re deciding on the best credit card for the job.

Think about:

• Rewards structure: Check if you get any benefits or rewards for using the card. Many will offer a percentage cashback on purchases (1%-2% is common), plus discounts on brands and points that can be exchanged for air travel or holiday costs.
• APR and fees: Does the card charge an annual fee? And are there any other fees for using the card overseas etc? Make sure you know the interest rate (usually the Annual Percentage Rate or APR), and how this will affect your interest and repayments. Rates can vary greatly, but will generally range from 15% up to around 35% APR
• Transaction-specific benefits: What other perks does the card offer? Is it free to make international payments in other currencies? Do you get extended purchase protection on the items you’ve bought? Are virtual cards and payments apps available?

Going beyond credit card financing 

Looking for alternative financing solutions to complement your credit card usage is one way to balance your financial commitments, while having the ready cash you need to move forward. 

At iwoca, we know the importance of having the funds to keep your business growth on track. That’s why we offer fast and flexible ways to borrow money now, and pay it back in the future. 

Getting the right finance couldn’t be simpler:

• Borrow what you need, repay early and top up on demand.
• Borrow within 24hrs, repay early with no fees
• Business loans that work with you.
• Borrow only what you need, pay back on your terms.

If you’re looking for the finance to cover your purchase pipeline, an iwoca business loan is the flexible way to get the capital you need.

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Frequently Asked Questions (FAQs)

Can I use my personal credit card for business purchases?

We’d strongly advise against using a personal credit card to pay for business items. All business expenses should be recorded through the company’s bookkeeping and accounting software. This is easier when you’re using a business credit card that’s linked to your finance software. 

What are the risks of using a business credit card for personal expenses?

If your business is incorporated, you and your company are two separate entities. Your business funds and lines of credit should not be used to pay for personal expenses. Doing so can affect your liability, create incomplete records and add confusion during the audit process.

How to ensure compliance with business accounting standards.

As a UK company, your financial record-keeping must meet International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS). This means keeping adequate records of all transactions made by the business, including your card payments.