Trisha Amable
Sep 20, 20198 min
A business Credit can be a very good help for your small business. If used correctly, a business credit card can help your business spread costs, manage cash flow, facilitate staff spending and build your business credit rating.
Discover Girlfridayz top tip to avoid business credit card debt and Hazel.
A business credit card is similar to your personal credit card and works the same as your personal credit card, in that you’re given a credit limit and an agreed interest rate and there’s a minimum amount that you must pay off each month or you can repay your full balance each month and you are usually rewarded for doing this by the lender.
A business card is issued to your business and therefore the name of the card will be the name of your business and will give you a credit limit based on your business creditworthiness and the credit limit is the maximum amount which can be spent on the card.
A business credit card is an unsecured debt and it is part of borrowing fund for your business, therefore, if you need to grow your business and need to buy a big purchase or huge equipment to provide your products or services you might be better off with a business loan for this huge one-off expenses.
There is something to consider when applying for a business credit card, you might focus on the interest rate charged if you do not repay the balance which can be a strain on your small business and take away potential profit or hurt your profit margin.
However, most lenders offer an interest-free period on their corporate credit cards meaning you only pay interest on the outstanding amount if you exceed the period given (often 45 days, but some can offer up to 90 days).
Applying for a business credit card is reasonably easy, and can be done either in a bank branch or online. Bear in mind though, if you want to apply for a business credit card with your bank, you normally need to be an existing business customer.
As easy as the application may be, it can still take a while to set up your business credit card since the lender needs to assess your eligibility. To apply, you will need to answer a few questions about your business, your desired credit limit, and the number of cards you’d like to have.
When applying for a business credit card, lenders will most likely look at your business credit score, as well as additional documentation such as bank statements. However, in some cases, they would want to check your personal credit score too. This can be the case if your business is very new, and therefore doesn’t show much of trading history.
Depending on your business’s credit rating, your allowed credit limit can vary from £1,000 up to £10,000. Even other features of your business credit card such as interest rate, interest-free period, or rewards depend on your credit report. The rule of thumb is: the better the credit rating, the better the offers.
If you’re trying to get a credit card for a new business without much of credit history, the lender is likely to look at your estimated turnover and your personal credit history, and they may ask for copies of bank statements and business plans before they will approve your application. At Girlfridayz we can support you with a business plan which can attract fund for you. if you are interested click on the link to access this sure-fire service.
The NatWest business credit card for startups is for small businesses with a turnover of up to £1 million. The minimum credit limit is £500 and the maximum is £10,000.
The representative APR is 24.5% (variable). There’s an interest-free period of up to 45 days for purchases if you pay your balance in full on time.
There is no fee for this card for the first year, but after this, it rises to £32 per card per year.
As an added extra, you can get up to £50,000 worth of travel accident insurance automatically if you pay for overseas business travel using the business credit card.
Once you’ve got your business credit card you can manage it online, but to apply for the card you need to call or download and send the application form.
Other charges and terms apply. See the NatWest website for further details.
RBS and NatWest are both parts of the RBS Group, so the RBS business credit card is the same as the NatWest one.
Businesses with a turnover of up to £1 million can get a business credit card with representative APR of 24.5% (variable), an annual card fee of £32 (waived for the first year), and up to 45 days interest-free on purchases if the balance is paid in full. The travel insurance perk applies too.
Other charges and terms apply. See the RBS website for further details.
The Santander business cashback credit card is for small to medium-size businesses with up to two directors, owners or partners. You can get 1% cashback on business purchases you make with the credit card.
The representative APR is 23.7% (variable). There’s an interest-free period of up to 56 days for purchases if you pay your balance in full on time.
The annual fee for the Santander business credit card account is £30, with additional cards available at no extra cost.
You can’t apply for the card online - you’ll need to visit a local Santander branch to make your credit card application.
Other charges and terms apply. See the Santander website for further details.
The Lloyds business credit card is for small businesses looking for a credit limit of up to £10,000. The minimum credit limit is £1,000.
The representative APR is 22.4% (variable). There’s an interest-free period of up to 45 days for purchases if you pay your balance in full on time.
The annual fee for the Lloyds business credit card account is £32 per card. Existing Lloyds business banking customers can apply for a business credit card online.
Other charges and terms apply. See the Lloyds website for further details.
The Barclays business credit card is for small businesses with a turnover or expected turnover of at least £10,000. The minimum credit limit is £1,000 and the maximum is £10,000.
The representative APR is 22.4% (variable). There’s an interest-free period of up to 45 days for purchases if you pay your balance in full on time.
The annual fee for the Barclays business credit card is £32 per card, although the first 12 months is fee-free.
You can apply for the credit card online.
Other charges and terms apply. See the Barclays website for further details.
American Express offers business charge cards, with no interest rate because you must pay the outstanding balance in full each month. There’s no preset spending limit, but your purchasing capacity ‘evolves according to the needs of your business and adjusts based on your current spending patterns, payment history, credit record, and financial resources.’
For the basic card, there’s no annual membership fee. For the gold business card, there’s an annual fee of £125 (although the first year is fee-free) but rewards include membership points, which can be redeemed on things like business travel, office equipment, and corporate entertainment. For a higher annual fee, there’s the platinum business card.
Business credit cards can be very expensive if you don’t pay them off each month, and you should always read the terms and conditions carefully. To be debt-free and manage your business credit card here our tip use only 10% of the credit limit and repay the 10% used in full before your statement cut off date and do not use it until after your statement date. Your lender will see that you have repaid the fund used on time and you may not have interest fee apply and get rewards if on offer.
By using this method you are managing the borrowed money as you need to make sales in order to repay the money. Hence using only 10% of your business credit card is wise and only when it is necessary too. As you should be able to repay your cost without borrowing money to do so.
If you cannot repay all your monthly cost with your turnover monthly there is no need for your business to have a credit card as you will create a huge debt if you have a very low or low sales amount monthly as a small business or sole trader.
Here another free tip business credit card interest fee as well as your business bank account fee and any other financial charges is an allowable expense and can be declared on your tax return.
We can help you increase sales with our Playbook for success at Girlfridayz get it for only £3991 and we accept credit card payment. Our Playbook for success is an allowable expense in the UK and can be declared on your tax return, like all our other services under the categories Advertising and business entertainment and cost and other business expenses(this is the categories for our online store business and marketing book publication).
All our services are an investment for your business and tax-deductible as we are part of your allowable expenses that brilliant news using Girlfridayz Services can lower your UK taxes bear that in mind when using our sought-after services.
Visit Girlfridayz business Tools we redesign our page just to fit our newly added business tool Hazel our Business Credit Card Calculator which mirror how a credit card lender will charge you, and it even adds interest fee on the monthly transactions entered and you can repay what you use.
Hazel our business credit card calculator is different from other online business credit card calculators who tells you how long to repay for the debt. Our calculator helps you control your spending on your credit card as you enter your real credit limit and our calculator accepts credit limit from £1000 to £100 000. Then enter your statement date and your monthly transactions and the type of card you have either business or commercial.
Press the calculate button and Hazel will show you how much you spend, the fee charged on transactions, the money available to spend and the remaining balance and offer you to repay. Once you put a payment, click on the calculate button again and Hazel will show you how much you've paid and your updated balance and available amount.
If you put an amount over limit Hazel will tell you to repay the transactions amount plus fee immediately as a credit card lender will tell you to do but our calculator does not add an extra fee as credit card lenders do.
Hazel is a very useful calculator for your business and helps you manage your spending on a credit card as when you see visually how you use the borrowed money you can adjust your business spending behavior, implement saving cost in your business, Hazel also shows you what you are likely to be charged when you receive your statement if you pay the minimum repayment amount asked to repay.
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