Compare Business Credit Cards
Business credit cards and rewards can mean big benefits for small businesses as the transactions add up to frequent flyer points and general rewards. Learn more about business credit cards. Canstar’s FSG and website terms of use apply to the use of the information on these pages.
What is a business credit card?
A business credit card is a credit card that can be used for spending on work-related expenses. Business credit cards can be issued to a company or business that holds an Australian Business Number (ABN), and multiple cards can be held by different staff members.
Business credit cards can be a helpful way for business owners to separate personal transactions from work-related expenses. Because the funds used are taken on credit, a business credit card can help even with cashflow management, although there are costs involved, including interest and fees.
Depending on the type of card and the issuer, they can come with other benefits, such as membership of rewards programs.
Corporate credit card vs business credit card: What’s the difference?
While any business can typically apply for a business credit card, corporate credit cards (also known as corporate charge cards or commercial credit cards) are typically only available for large companies that need credit cards for a larger number of personnel and which may also, in some cases, need a credit card management system.
What types of business credit cards are there?
In general, there are a few different kinds of business credit cards available in Australia, with different features, depending on the needs of the business owner. The most common types of cards are:
- Rewards cards: These may be useful for businesses that want to be rewarded for their spending.
- Low-cost cards: These may be useful for businesses that want a low interest rate with no annual fee.
- Frequent Flyer cards: These may be useful for businesses with staff who undertake a lot of work-related travel.
There are four main credit card payment networks that provide credit cards in Australia – these are Visa, MasterCard, American Express and Diners Club. Their cards are available from a wide array of banks and building societies around the country.
How do business credit cards work?
Business credit cards are typically taken out by:
- Business owners who want to separate their business expenses from their personal spending. In this scenario, the business owner would have a credit card in their business name, and would perhaps have a personal credit card as well. Business expenses would go on their business card and be paid for out of business funds, potentially simplifying financial record-keeping.
- Companies that want to provide a way for employees to pay for business-related expenses, without the employee having to dip into their private funds and claim those expenses later from the company. Usually the employer issuing the card has a set of rules around what can be charged to the card, and what the employee must pay for themselves. For example, a company may allow employees to pay for client entertainment expenses on that card but require receipts and details of the event be provided to the company as evidence that the expense was justified.
Personal vs business liability: Who is responsible for the business credit card debt?
With all credit cards, ‘liability’ for the debt has to be assigned – who (or what, in the case of a company) is ultimately responsible for the debt. Business credit card liability is an important consideration when taking on a credit card product. This is because if the card is in default and a lender needs to take action on an outstanding balance, they will pursue the person or company which holds the liability.
- Personal liability: Where the person taking out the card (and not the company) is responsible for paying the debt on the card. Usually, this would be the business owner.
- Joint and several liability: Where multiple people are responsible for the debt, such as where multiple people are partners in a business and share financial responsibility.
- Business liability: Where the business, and not a person or people, are responsible for the debt.
The liability information for a business credit card is typically listed in the terms and conditions documentation for the card. This documentation will generally be available from the payment network or financial institution offering the card.
How does Canstar’s Business Credit Card Star Ratings and Outstanding Value Awards work?
Canstar’s Business Credit Card Star Ratings uses a sophisticated ratings methodology to assign Star Ratings to business credit cards based on a range of characteristics, such as:
- fees and interest rates
- number of interest-free days
- standard and premium features
- rewards and loyalty programs.
Products are scored according to two overall categories, price and features, and the overall score is a combination of both of these. Canstar Research has deemed business credit cards that achieve a 5-Star Rating as representing outstanding value in their category.
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This advice is general and has not taken into account your objectives, financial situation or needs. Consider whether this advice is right for you.