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Latest in Business Credit Cards

What is a business credit card?CANSTAR Outstanding Value Business Credit Card

Unlike personal credit cards, business credit cards are issued to a company or business with an Australian Business number (ABN). Multiple cards can be provided to different staff members, enabling employees to spend company money on business expenses.

Business credit cards can make it easier for small business owners to separate business transactions from personal transactions with features available on some cards to help with tracking spending. They can also reward businesses for spending with attached premium benefits.

Types of Business Credit Cards

There are a few different types of business credit cards available in Australia:

  • Rewards cards: For businesses looking for rewards for their spending.
  • Low rate cards: For businesses looking for a low interest rate with no annual fee.
  • Frequent Flyer cards: for businesses that have staff who travel often.

There are four main credit card brands available in Australia often offered through a vast array of banks and building societies:

  1. MasterCard
  2. Visa Card
  3. American Express Card
  4. Diners Club Card

How does Canstar compare business credit cards?

Canstar uses a sophisticated ratings methodology to assign Star Ratings to business credit cards based on an array of characteristics, such as:

  • Fees and interest rates
  • Number of interest-free days
  • Standard and premium features
  • Rewards and loyalty programs

The overall score of a product is calculated by adding its total price score and total features score. Business credit cards that achieve a 5-Star rating represent some of the top value products on the market.

Eligibility Requirements

In order for a product to be considered in Canstar’s Business Credit Card Star Ratings, products must meet the following requirements:

Low rate

  • Be unsecured (excludes charge cards).
  • Be either business-liability or personal-liability cards
  • Offer a credit limit of $10,000 on application

 Rewards

  • Offer a rewards program that provides direct access to cashback or gift cards

Frequent Flyer

  • Rewards points must be able to be transferred to one or more frequent flyer programs that collectively offer flights between Sydney and the six destinations considered.

Features to look for in business credit cards

There are many features that may be attached to a business credit card. These can include:

  • Useful terms and conditions such as interest-free days, introductory rates, a high maximum number of cards, etc.
  • Security features such as merchant acceptability and online safety
  • Rewards programs, airline lounge access and other premium benefits

A summary of the features we assess when looking for outstanding value in a business credit card are contained in the Methodology for our Business Credit Card Star Ratings Report.

Fees on business credit cards

There are a number of fees that may apply to your business credit card. See your card’s product disclosure statement (PDS) for details on all fees that may apply to your account. Some common fees include:

  • Annual or account-keeping fee: A monthly or annual account-keeping fee charged by your lender to cover the administration cost of maintaining the line of credit. An annual fee is more common on rewards credit cards.
  • Cash advance fee: A cash advance is when you get cash out or purchase foreign currency using your credit card and the bank charges a fee to provide this cash.
  • International transaction fee: Most banks charge a fee to process a purchase you make overseas. They can also charge a conversion fee when the purchase is made in a currency other than Australian dollars. These fees are usually a percentage of the purchase price, so can add up quickly.
  • Late fee: If you do not pay the minimum amount due on your monthly bill, you will be charged a late fee. One great trick for preventing this is to set up a direct debit automatic repayment for the minimum amount every month.
  • Non-bank ATM fee: A fee charged by your bank when you use an ATM from a different bank. Some banks will even charge you to make a balance enquiry on your card using another bank’s ATM.

What credit card is right for your business?

Wondering what type of credit card you should get for your business? This depends on what you intend to use it for. We rate business credit cards for two categories of business credit card user: the Revolver and the Transactor.

 

The Revolver

The Revolver is a business that keeps a debt on their card and pays interest on the balance, “revolving” the debt from month to month.

When looking for a business credit card, our advice for Revolvers is this:

  • Look for a card with a low interest rate.
  • Look for a low annual fee.
  • Look for a card that offers instant rewards.
  • Don’t spend extra just to get rewards.
  • Don’t be dazzled by cards offering big rewards – they come with hefty interest rates & annual fees.
  • Don’t decide on a card until you do your sums and work out what you can afford.

 

The Transactor

The Transactor is a business that pays off their credit card balance in full every month.

When looking for a business credit card, our advice for Transactors is this:

  • Look for a card that has a reasonable annual fee.
  • Look for the maximum interest-free days.
  • Look for a rewards program that’s beneficial to your business.
  • Don’t spend extra just to get rewards.
  • Don’t miss payments, or the high annual fee will outweigh the card’s benefits.
  • Don’t decide on a card until you do your sums and work out what will give you the best value.

No matter what you use the card for, it pays to shop around. Products on the market are continually changing, both in interest rates and other features. Setting aside an hour to compare the current offerings on the CANSTAR website could end up being a great return on investment for your business.