If you need a business credit card, then start here. Compare your options to find the right card for your organisation.
Business credit cards largely work on the same principle as personal credit cards, allowing cardholders to purchase goods or services physically at a merchant location, or remotely via the telephone or interest. The major difference is that eligible business credit card applicants require an Australian Business number (ABN) and can use the card to pay for business costs rather than personal purchases.
There is a variety of credit cards available in the Australian market, and the right option will always depend on your business’ unique financial situation and needs. Use this page to compare your options and find the right card for your organisation.
Business Credit Card Offer
The American Express Business credit card offers 100,000 Rewards Bonus Points for approved applications before 2 February 2016. Earn 2 points for every dollar spent up to 375,000, reverting to 1 point for every dollar thereafter.
- $1,500 p.a. annual fee
- Up to 51 days interest free
- Minimum Income Requirement of $75,000 p.a.
Business Credit Card & Charge Card Comparison
Rates last updated November 25th, 2015.
- American Express Gold Business Card
10,000 Membership Rewards Bonus points offer has been extended until 2 February 2016.
September 24th, 2015
- American Express Platinum Business Card
The 100,000 Membership Reward Points offer has been extended until 2 February 2016.
September 24th, 2015
What is a business credit card?
A business credit card varies from a personal credit card, providing extra features such as managing business expenses and employee spending, exclusive rewards and other extra perks for business customers. Business credit cards also include charge cards, rewards credit cards, corporate credit cards and small business credit cards to suit all types of business users needs.
Why should I choose a business credit card?
Owning a business credit card comes with some advantages, some of which include:
- Convenience. Using a business credit card is an easy way to make instant purchases in person, online or over the telephone. You can also request additional cards for employees that need to make regular purchases, which can be more convenient than organising cheques or leaving large amounts of cash around the office.
- Manage business expenses. Business owners can use a business credit card to separate their personal expenses from their business costs, making it easier to keep track of your business expenditure.
- Improve credit rating. If you use your card appropriately and make regular repayments, a business credit card can be an easy way to build your business’ credit rating.
- Interest-free days. Some business credit cards offer interest-free days if the account holder pays the balance in full each statement cycle. Taking advantage of these interest-free period offers can help keep your interest costs at a minimum while improving your business cash flow by offering short-term credit when you need it.
- Rewards benefits. If you and your additional cardholders make regular payments with a rewards business credit card, you could find yourself racking up rewards points in no time. Rewards business credit cards offer rewards, such as merchandise or travel perks, that could be of value to your organisation. For example, if you have a business trip coming up, you could cut costs by converting your points into Frequent Flyer miles to save on airfares. Similarly, you could redeem the points for travel rewards, merchandise or gift cards to reward your employees.
- Higher credit limits. Credit cards designed for business expenses usually come with a higher credit limit than personal cards, making them ideal for a company that larger business costs.
How to find the ideal business credit card for my business
There is a variety of business credit cards available to Australian business owners, so you’ll need to compare your options to find the product that provides your card with the greatest value. Here are some of the features:
What type of credit card user am I?
While each cardholder has unique needs, the habits of most credit card users fall into at least one of the two below categories. Considering which of these most closely relates to your business’ spending habits to help you pick the right option for you.
This refers to businesses that carry a debt from month to month and pay interest on the balance owing rather than paying it in full each month. Revolver credit card users are interested in no-frills credit cards and aren’t interested in cards with large rewards (or the hefty interest rates and annual fees that come as a result).
As such, when comparing credit cards a revolver credit card user is looking for:
- Low interest rates
- Low annual fee
- Instant rewards
On the other hand, a transactor credit card user pays off their credit card balance in full each month. Unlike a revolver card user, transactors don’t carry balances from month to month and take advantage of interest-free days to keep their costs low.
When comparing credit cards, those in the transactor category pay close attention to:
- Reasonable annual fees
- Maximum interest-free days
Which type of business credit card is right for me?
Business credit cards vs. charge cards
A charge card acts as a short-term (usually monthly) loan to a business on any purchases they charge on the card. Charge cards defer the payment owed to the end of the balance month. As a result, interest rates do not apply to charge cards as there is no revolving line of credit. Charge cards are different to credit cards as they provide you with no preset spending limit, for financial flexibility and full control of your expenses. The full amount must be repaid each month to avoid hefty late fees, compared to credit cards that allow a balance to be brought across each month.
These cards are designed for organisations that are financially stable enough to clear their balance each cycle, so you may like to consider a Business credit card if you are looking to borrow over an extended period.
Different types of business credit cards and charge cards
- Rewards. If your business regularly pays for the business expenses on plastic, you could take advantage of a rewards credit card to earn rewards points on necessary expenses. If the organisation often cover business costs with a credit card, racking up a significant amount of rewards points could come easily.
Depending on which card and rewards program you join, you could redeem your points for travel rewards, merchandise or gift cards. Some cards also allow you to earn bonus points when shopping with certain retailers, so make sure to choose a card that compliments the business’ spending habits. You should also consider the rewards on offer and which program offers the greatest value. For example, if you and your colleagues often take business trips, you could use a frequent flyer program to redeem points for flights to reduce the organisation’s travel costs.
- Simple and cost effective. While cards that offer a rewards program, concierge services and other premium features can be of benefit, they often come with higher rates and fees. If you’re after a card that offers the basic features without the additional perks, a low-rate or low-fee business credit card could be the right option for you.
If you’re looking to keep costs to a minimum, consider a card with a $0 or low annual fee and low-interest rate on purchases. Some cards come with a promotional interest rate on purchases (such as 0% p.a. on purchases for the first six months) whereas other cards offer interest-free days (usually up to 55 or so days) for cardholders who pay their balance in full each month. If the card does come with a promotional interest offer, make sure to consider the revert rate to avoid any nasty surprises when the introductory period is over.
- Long-term purchase repayment. If you mainly use your business credit card for large expenses and struggle to make repayments, a credit card that allows long-term repayment on purchases could be of value. Compare cards that offer low-interest rates on purchases for a promotional period and estimate whether you could repay your balance by the time the introductory period finishes. Otherwise, you could also consider a card that comes with interest-free days whenever you pay your balance in full during the statement cycle.
How to apply for a business card
The application process for a business credit card is relatively similar to the regular application process. The eligibility requirements will vary from card to card, but some of the standards you’ll be expected to meet include:
- Age. Cardholders must be at least 18 years of age.
- Residential status. Applicants must be permanent residents of Australia.
- ABN. Cardholders must have a valid ABN to apply.
- Credit score. Only applicants with a good credit history will be considered.
What else should I consider when comparing business cards?
Fees & charges
Some of the fees and charges include:
- Currency conversion fees (typically 3% of the transaction value)
- Minimum required monthly payments (generally 2.5% of the entire outstanding balance)
- Overlimit fees for exceeding your credit limit (can vary between $15 to $25)
Business spending habits
When choosing a business card, the most cost-effective method is to pick a card that matches your existing business spending. Business cards offer a lot of ‘bells and whistles’ that present an attractive offer, but not all offers will help maximise value while operating your business. Choosing a card should depend on the types of transactions your business undertakes (eligible purchases, capital expenses, additional cardholder spending, business travel needs etc. and matching the types of transactions with the rewards program and card benefits.
- Exclusive business rewards. Business credit cards can provide access to exclusive rewards benefits that are outside the scope of personal credit card users. Other rewards perks can include free delivery and express shipment.
- Expense management systems. Keeping on top of business expenses and consolidating your credit card transactions can be difficult amongst the other million tasks involved in running a business. Expense management systems give you control and simplicity, providing an all-in-one solution for;
- 24/7 monitoring, budget tracking by creating standard or custom reports, clear visibility of company spending and recognising patterns to better manage cycles in spending.
- Multiple reporting formats including: Microsoft Excel®, Word®, PDF, HTML, XML, CSV and Tab-delimited
- Online business banking. Receive all the access you would expect from banking online like 24/7 access to your account plus optional business security options such as encryption technology for peace of mind. Business applications allow mobile management so you can bank on the go with your business.
Personal vs. Business Cards
Personal credit cards pros & cons
Business Cards pros & cons
A credit card payment fee or charge will be deductible if it meets the following criteria:
Using a business credit card allows you to separate your personal and business expenses and simplify the record keeping process, avoiding the difficulty of maintaining multiple accounts.
This provides benefits such as:
Other options for business owners
If a business credit card or charge card doesn’t suit your business’ needs, you could also consider one of the following alternatives
Corporate credit card
Corporate credit cards are designed for larger corporations, and the features of the card are often tailored to meet the business’ unique needs. This usually involves the business owner and executive staff meeting with a representative of the bank or card provider to discuss these details. If your business makes over $2 million p.a., a corporate credit card could be of value. Banks don’t usually advertise corporate cards, so it’s more likely that you’ll have to contact your provider directly to enquire about this type of card.
Small business credit cards
This type of card is a popular choice with small to medium sized businesses. These cards usually come with smaller credit limits, fewer features and lower rates and fees than business credit cards designed for larger corporations. As with any credit card, compare your options and ensure that the features and costs of the card are suitable for your business.
Business debit cards
Business debit cards are a more prudent alternative than their credit card counterparts as they only allow cardholders to spend as much as they can afford. Business debit cards’ buying power is determined by the capital available at the time, so this could be a more responsible way to conduct business. While this can keep your business’ record books clear of debt, it drastically limits the buying power of the business.
Frequently Asked Questions
Can I earn reward points for payments to the ATO?
Please refer to this page for a guide on earning reward points by paying your tax bill.
Does my business credit card come with travel insurance?
How does a business credit card differ from a personal credit card?
As the name suggests, the features of a business credit card are much better suited to that of an organisation than a personal credit card. The credit limit, purchase restrictions and features of a business credit card are designed to compliment the financial needs of a business. As a result, you may find that the features of a personal credit card are insufficient for your business.
How much can I balance transfer to a Business credit card?
Banks generally allow between 80-95% of the approved credit limit for balance transfers. This will depend on your application, credit history and the banks lending criteria.
How many additional cardholders can I get?
Business credit cards can support up to 99 additional cardholders. To find out how many cardholders your credit card allows, refer to product table provided (on the review page of the credit card).
Are the rewards the same as for personal credit card holders?
The rewards available for redemption can vary between business and personal credit cards and the number of points earned per dollar can also vary depending on the type of business credit card and personal credit card you are comparing.
Is there a personal liability for charges on business credit cards accumulating frequent flyer points?
The main account holder is personally liable for all charges on a business credit card.