When and when not to use a business credit card

Information verified correct on October 22nd, 2016
businessman with a credit card

Learn when and when not to pay on plastic when managing your business expenses.

Credit is a tool for all stages of the business lifecycle. A credit card can help you pay for startup costs as well as maintaining a steady cash flow once your business matures. Business credit cards can provide points for eligible business purchases, insurances for unauthorised transactions and overseas travel, and extra money when business is slow. We have a look at instances when a business credit card can help your business grow and save you money.

Compare Business Credit Cards

Rates last updated October 22nd, 2016.

American Express Gold Business Card

10,000 bonus Membership Rewards points offer has been extended.

February 4th, 2016

Commonwealth Bank Business Platinum Awards Credit Card

First year annual fee waiver has been extended until 31 October 2016.

September 2nd, 2016

American Express Platinum Business Card

100,000 bonus Membership Rewards points offer changed to 150,000 which is valid until 30 Nov 2016

October 4th, 2016

View latest updates

Jonathan Choi Jonathan
Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee
Commonwealth Bank Business Interest-Free Days Credit Card
Take advantage of $0 annual fee for the first year and receive $250 cash back (spend $500 by 31 December 2016).
17.57% p.a. $0 p.a. annual fee for the first year ($60 p.a. thereafter) Go to site More info
Commonwealth Bank Business Platinum Awards Credit Card
Earn up to 3 Awards points per dollar spent, enjoy complimentary insurances and $0 annual fee for the first year.
20.74% p.a. $0 p.a. annual fee for the first year ($300 p.a. thereafter) Go to site More info
American Express Platinum Business Card
Receive 150,000 bonus points, earn up to 2 Membership Rewards points for every dollar spent, complimentary insurances and access to 800 VIP Lounges in 100 countries.
$1,500 p.a. Go to site More info
American Express Business Card
One of the original charge cards from American Express that offers complimentary insurances including purchase protection and accident cover.
$109 p.a. Go to site More info
American Express Gold Business Card
Receive 10,000 bonus points on signup and earn 1 Membership Rewards points per $1 spent with uncapped earnings.
$169 p.a. Go to site More info
American Express Velocity Business Card
A truly dedicated business rewards credit card. Download all your card expenses in a format readable by Quicken, MYOB, Microsoft Excel and more.
$249 p.a. Go to site More info

Scenarios where you should or shouldn’t use a credit card

new carUsing a credit card to purchase new assets for your business

Verdict: Yes. Why? The government has temporarily introduced tax breaks for businesses with an annual turnover of less than $10 million.

  • Federal government small business instant asset write-off scheme: Small businesses with an annual turnover of less than $10 million can claim an immediate tax deduction for business assets costing less than $20,000.

The government has tax incentives for businesses looking to purchase new assets such as equipment, vehicles and stock. If you operate a small to medium business with an annual turnover of less than $10 million, you can benefit by immediately deducting the value of the asset (up to $20,000) from your business’s taxable income. The scheme ends in 2017. Now is the time to purchase new assets for your business and a business credit card can help you pay for the purchases.   The asset can be immediately deducted from your business’s taxable income. You could use the savings to pay a lump sum off the credit card balance and make instalments over the next year until the debt has been repaid. How to balance transfer your small business purchases

man holding notes and credit cardUsing a business credit card to pay for day-to-day costs

Verdict: Yes. Why? Manage your business credit card and you and your employees can make business purchases from month to month without paying any interest.

  • Interest free days. Compare business credit cards featuring interest-free terms on everyday business purchases. Many business credit cards offer interest-free days, some offers going up to 55 interest-free days. You can usually only take advantage of these interest-free days if you’ve paid your balance in full and they’re not applicable on cash advances or balance transfers.
  • Promotional interest free periods. Otherwise, you can look for a card with a 0% interest rate for a promotional period.

Find out how to make the most of credit card interest free days   Why? Get rewarded when you make purchases for your business.

  • Rewards. A Business credit card with a rewards program could be a great way to get some extra value for purchases you’d have to make regardless/.
  • Personal rewards and frequent flyer credit cards have a clause in the terms and conditions that states no points are awarded for business purchases. If you want to get rewarded for your business purchases, you’ll need to use a business credit card linked to a rewards or frequent flyer program.

The Westpac Altitude Business Platinum Credit Card rewards you with Altitude Rewards Points for your business’s eligible purchases. This includes bonus points when you spend at overseas merchants; Westpac Altitude Rewards partners and Westpac will reward you when you make payments to the government too.   Altitude Rewards Points can be transferred to a number of frequent flyer programs including Qantas and Velocity. Points can also be redeemed for business rewards such as office equipment, flights, gift vouchers and you can convert your points for money towards you or your employees’ superannuation balances. Compare business credit cards with rewards   Why? Make reporting your business expenses easy with a business credit card.

  • Tax reporting. Business credit cards can include features such as data feeds which link directly to popular business accounting software such as MYOB and QuickBooks. These accounting features let you easily separate personal and business expenses for ease of business activity reporting. Business credit card tax reporting tools can also let you see how much each employee is spending and on what.

paying billTo pay for personal purchases

Verdict: No. Why? Using a personal credit card to pay for business purchases can mean you’re held personally liable for the financial risk that comes with owning and operating a business.

  • Personal liability. Keep your business purchases in the name of your business and your personal purchases in your own name. Use a no-personal liability business credit card so you won’t be held liable for your business debt if you’re unable to meet your business credit card repayments.

Why? So your personal purchases don’t eat your business credit limit.

  • Spending power. You may need all your business credit for your business. Using your business credit card to pay for personal purchases can mean you’re reducing your business’s spending power.

Why? Keep your personal and business purchases separate for ease of tax reporting.

  • Tax reporting. Using a credit card in your own name for your personal purchases and a credit card in your business’s name for business purchases makes tax reporting a simpler process. Separating your business and personal purchases can save you time and money when you’re preparing your business activity statement (BAS).

calculating company expenses

To pay for employee expenses

Verdict: Yes. Why? Issue business credit cards to your employees and set the credit limit for each card.

  • Additional cards. Financial institutions can provide a high number of additional business credit cards linked to the one account. For example, Suncorp Bank allows up to 99 additional Suncorp Clear Options Business credit cards. You can set the credit limit for each additional card so you can control employee spending.

Why? You’re protected if an employee makes an unauthorised purchase.

  • Unauthorised transaction insurance. A business credit card can give you protection if your employees make unauthorised transactions. For example, the St.George BusinessVantage Credit Card features complimentary insurance for fraudulent transactions made by your business’s employees. An unauthorised transaction can include instances where an employee continues to use the account once they have been dismissed.

Compare business credit cards

businessman on the airport

To pay for travel expenses

Verdict: Yes. Why: Complimentary insurances cover you, your employees and family when travelling to work and abroad.

  • Transit accident insurance. Business credit cards such as the ANZ Business 55 Days Interest Visa Credit Card feature complimentary transit accident insurance. If you or your employees charge the cost of a travel ticket to the ANZ Business Visa credit card, the insurer will provide financial compensation up to the value of $250,000 if an injury is sustained when riding in a passenger vehicle to and from work.
  • International travel insurance. Business credit cards such as the Westpac Altitude Business Platinum Credit Card provide complimentary international travel insurance. When at least $500 worth of prepaid travel expenses are charged to the account, you and your employees are covered for the cost of overseas medical costs, replacing lost and stolen personal items, repatriation to Australia and personal liability insurance.

What else should I consider?

  • Alternative business finance. Business loans are an alternative to business credit cards. Business loans have a comparison rate comparable to low rate business credit cards, a maximum loan amount up to $500,000 in value and repayment periods of up to three years.

Outside Australia’s Big Four banks, lenders such as PayPal also provide finance to small to medium enterprises. Before you apply for a business credit card, make sure you’ve compared all your options for business finance to make sure you’re getting the right type of credit for your operation. Although you can use a personal credit card for business purchases, you should avoid using your business credit card for personal purposes and vice versa. Business credit cards with personal liability may be a way to get approved quickly without providing complete business financials, but any actions made on the credit card will have an impact on your personal credit file. Regardless of which card you use, as there are many business credit cards on the market, it’s wise to compare your options before applying to make sure that the card is the right one for your business.

Back to top
Was this content helpful to you? No  Yes

Related Posts

Ask a Question

You are about to post a question on finder.com.au

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Disclaimer: At finder.com.au we provide factual information and general advice. Before you make any decision about a product read the Product Disclosure Statement and consider your own circumstances to decide whether it is appropriate for you.
Rates and fees mentioned in comments are correct at the time of publication.
By submitting this question you agree to the finder.com.au privacy policy, receive follow up emails related to finder.com.au and to create a user account where further replies to your questions will be sent.

Credit Cards Comparison

Rates last updated October 22nd, 2016
Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
Enjoy a 0% p.a. balance transfer offer for 18 months and also earn 2 bonus Velocity Points in the first 3 months on everyday spend.
20.74% p.a. 0% p.a. for 18 months $64 p.a. annual fee for the first year ($129 p.a. thereafter) Go to site More info
ME Bank frank Credit Card
Enjoy a low and consistent interest rate on purchases and cash advances, combined with no annual fee.
11.99% p.a. $0 p.a. Go to site More info
HSBC Platinum Credit Card
Receive a full annual fee refund and save $149 if you meet the $6,000 spend requirement. Enjoy a balance transfer offer and platinum card benefits such as complimentary insurances and concierge services.
19.99% p.a. 0% p.a. for 15 months $149 p.a. Go to site More info
NAB Low Rate Credit Card
The NAB Low Rate Card offers 0% p.a. on purchases and balance transfers for 15 months. This card also comes with a low annual fee.
0% p.a. for 15 months (reverts to 13.99% p.a.) 0% p.a. for 15 months with a one off 3% balance transfer fee $59 p.a. Go to site More info

* The credit card offers compared on this page are chosen from a range of credit cards CreditCardFinder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing cards.

Ask a question