Learn where to go for the credit card that will serve your start-up best. Also, find out what goes into a company's credit score.
Best Business Credit Cards for Start-Ups
Top-rated business credit cards for start-ups — FAQs
How about a credit card for a new limited company?
Business credit cards are available to both limited businesses and sole traders, however, there may be different eligibility restrictions based on the business’s length of operation.
By forming a limited liability company, you may legally separate your business money from your personal finances. This may help you build a solid credit profile for your company, which is one factor that lenders consider when deciding whether or not to provide financing.
A short credit history might result in a low score if your business is new. Because of the difficulty this presents to credit card issuers, being approved for a company credit card may be difficult. In the event of approval, you could find that your APR is greater than advertised and that your available credit is less than you anticipated.
Lenders may also consider your personal credit history when deciding whether or not to provide you with a loan if your company is just starting out. They could be more ready to issue you a business credit card if you have a high credit score.
In certain cases, you may need to provide a personal guarantee to be approved for the card. Any balances incurred on a company credit card will be your personal responsibility. If you’ve been responsible with your business credit, you may eventually qualify for a card with lower rates and a greater credit limit.
Is it wise to have a credit card with rewards for my new business?
A good rewards business credit card will likely include an annual fee, so your decision should be based on how often you expect to use the card. You should aim for the maximum attainable yield rate while paying as little as feasible in yearly fees. Do not be afraid of maths. joining’s generally worth joining if the cashback or benefits you expect to get exceed the yearly price.
You should also be careful while selecting incentives. For instance, if you seldom fly, you probably won’t know how to best put your Avios points to use. Check out the other options for business credit cards by comparing them here.
Which business credit card is ideal for a new company?
What you use your card for and what kind of company you have will determine this. You should opt for a card with a low interest rate if you anticipate sometimes carrying a debt.
Another option is to look for a business credit card with excellent rewards if you anticipate using the card often but can afford to pay off the bill in full each month.
You should prioritise the qualities that are most essential to you when selecting a credit card. When comparing items, you may wish to think about the following features:
- Costs that accumulate each year. No of how often you use your credit card, this is the yearly fee you’ll have to pay. It’s an essential consideration since you’ll need to allocate funds for it. The yearly cost for the British Airways Accelerating Business Card, for instance, is £250.
- Buying interest rate. This is less of an issue if you know you will always pay your credit card balance in full each month. But the APR will inform you how much it will cost your startup to borrow money via the card if you can’t. The yearly percentage rate of interest is often more than 20%.
- Facilities. Can you control the card from your computer or mobile device? Is it a decent app? Is integration with your financial programmes possible? If you run a startup, this is crucial since it will save you a lot of time.
- Rewards. These are for new businesses that anticipate heavy credit card use. For the first three months after opening an account, Barclaycard’s Business Select Cashback Credit Card is providing 2% cash back.
- Staff costs. Make sure you know how much it will cost before handing out cards to your teammates.
- Money exchange rates. A credit card without international transaction fees is ideal for frequent business travellers. If you’re not cautious, the fees associated with using a business credit card may quickly add up to a significant sum of money. For firms that often make purchases in several currencies, the Capital on Tap Credit Card is a convenient option.
When is the best time to apply for a credit card for my business?
The lender and your personal situation will determine this. It is possible to apply for a business credit card as soon as you begin trading if you have a high personal credit score and a business bank account. If you open a business bank account with the same company that issues your credit card, this is more likely to be the case.
However, before they would accept your application, some lenders may demand that you have been in business for six to twelve months.
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