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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.

Business credit cards glossary of terms

Please note that these are a general explanation of the meaning of terms used in relation to business credit cards. Your bank or financial institution may use different terms, and you should read the terms and conditions of your credit card carefully to understand all fees, charges and interest rates that may apply to your card.

Annual fee or account-keeping fee: An annual or monthly account-keeping fee charged by your lender to help cover the administration cost of maintaining the line of credit. An annual fee is more common for rewards credit cards.

Automatic transfer: A system that is set up to automatically transfer money from a one bank account into another account at a certain point in time to coincide with bills or payments. You can set up your business credit card to automatically transfer when business bills come in.

Average daily balance: The balance of your credit account is determined by adding up all balances during the month and then dividing the total sum by the number of days in a given billing cycle. Most credit card providers calculate the daily balance based on the annual interest rate.

Balance transfer: Transferring the outstanding balance on your credit card to another card, usually one with a lower rate.

Balance transfer fee: A fee charged when you make a balance transfer. It may be a flat fee or a percentage of the amount you transfer.

Bankruptcy: This is when a business’s debt problems become so serious that it is unable to pay its existing debts and bills. When this happens, the business owners can apply to a court to have the business declared ‘bankrupt’, and any assets the business owns can be ‘liquidated’ (sold to pay off existing debts).

Cash advance: Withdrawing cash from a line of credit. Usually incurs additional fees or a higher rate of interest.

Cash advance fee: A fee charged when you make a cash withdrawal from an ATM using your credit card. The bank may charge a flat fee or a percentage of the amount of the cash advance.

Credit limit: The maximum amount your business can spend using the credit card before having to pay off some of the balance.

Creditor: A lending agency to whom your business owes money.

Debit card: Also known as a bank card or a cheque card. Allows you to access the money in your savings or checking account electronically to make purchases.

Default: When a business fails to fulfil their obligation to make the minimum necessary payment on their credit card. Defaults negatively affect the credit rating of a business.

EFT: Electronic Funds Transfer. The transfer of money between accounts by electronic machines like ATMs, home computers, and EFTPOS machines.

EFTPOS: Electronic Funds Transfer at Point Of Sale. Usually refers to a small machine that merchants use to receive payments from customers’ credit and debit cards.

Full balance: The entire amount owing on your card that month, including any purchases made that month, any amounts unpaid from previous month’s bills, and any interest or fees charged.

Gift card: A card with a pre-paid amount placed on it, similar to a debit card. The amount is usually small, up to a few hundred dollars, and in business situations, the card is typically given as a holiday gift or a bonus reward to employees for outstanding service.

Interchange fee: Fees paid between your bank and a merchant’s bank to accept card-based transactions.

Interest rate: The rate at which your outstanding balance increases per month if your bill is not paid or not paid in full.

Interest-free days: The number of days your business has to pay a bill in full before interest is charged on the balance. It is the period of time between the date of a purchase and when the payment is due.

Introductory rate: An interest rate charged when you first sign up for a credit card, offered to entice new cardholders. These rates are usually very low, but revert to the standard rates after 6 months or so.

Merchant: A business that sells goods or services to customers for payment.

Minimum interest charge: The minimum amount of interest you would be charged if you are charged any interest. For example, if your total interest charge is $0.75 but the bank’s minimum interest charge is $1.00, you will be charged $1.00.

Minimum payment: The number listed on your bill as the minimum your bank requires your business to pay its credit card for that month.

Ombudsman: If you have a dispute with your business banking institution and haven’t been able to resolve it through the institution’s internal complaints resolution process, you can contact the Financial Ombudsman Service of Australia or the Credit and Investments Ombudsman. These are free and independent services that help people resolve disputes with their financial institutions.

Overdraft: An overdraft occurs when you write a check, make an ATM transaction, use your debit card to make a purchase, or make an automatic bill payment or other electronic payment for an amount greater than the balance in your savings/debit/checking account. The bank extends credit up to a maximum amount (the overdraft limit) and you can make withdrawals up to that limit. Interest is charged on the fluctuating daily balance.

Overdraft or overlimit fee: A penalty fee charged to you for exceeding your credit limit.

Penalty fees: Fees charged if you violate the terms of your cardholder agreement or other requirements related to your account. Penalty fees include late fees and overdraft fees.

Pre-approval: An initial approval notification that provides a business with an estimate of the credit limit they would be approved for if they applied for a line of credit.

RBA cash rate: The overnight interest rate that the Reserve Bank of Australia offers financial institutions to settle-up on inter-bank transactions. This cash rate influences the interest rate that banks give each other.

Revolving account: An account in which there are not a scheduled number of payments and the full balance doesn’t have to be paid off monthly. Credit cards are the most common type of revolving account. They can be contrasted with business loans, which must be paid off in a certain timeframe.

Rewards program: Benefits that come with the use of a credit card, often in proportion to the amount of money spent on it. Can come in the form of cash back, shopping vouchers, frequent flyer miles, and general rewards.

Universal default: When one financial institution treats a lender as if they had defaulted when the lender defaults with a different institution.

Who offers business credit cards in Australia?

All details below are correct at time of writing (September 2015). The providers listed below are the ones that CANSTAR has researched for its most recent Business Credit Card Star Ratings.

  1. American Express: American Express offer cards with no maximum credit limit. At the time of writing, they have welcome offers of 25,000 bonus rewards points for their Gold card and 40,000 bonus points for their Platinum card. American Express was founded in 1850 and issues the world’s largest number of credit cards.
  2. ANZ: In 2014, ANZ received our 5-star rating for outstanding value in business credit cards for the Revolver profile. They offer cards with no maximum credit limit. They provide free unauthorised transactions insurance for cardholders. ANZ has a long history, founded in 1835 in Sydney as the Bank of Australasia.
  3. Bank of Melbourne: In 2014, Bank of Melbourne received our 5-star rating for outstanding value in business credit cards for the Revolver profile. They offer cards with no maximum credit limit. They provide free insurance for unauthorised transactions, transit accidents, and business inconvenience. Bank of Melbourne was founded in 1989 and exists exclusively in the state of Victoria. Check out their Melbourne Made short film campaign that celebrates the Victorian people and businesses who bank with them.
  4. BankSA (Bank of South Australia): In 2014, BankSA received our 5-star rating for outstanding value in business credit cards for the Revolver profile. They offer cards with no maximum credit limit. They provide free insurance for unauthorised transactions, transit accidents, and business inconvenience. BankSA was founded in 1848 as a one-man, one-room operation, and it exists exclusively in the state of South Australia.
  5. Bankwest: Bankwest offer cards with no maximum credit limit. Their Corporate MasterCard offers unlimited cardholders to provide for a growing business. Bankwest were founded in 1895 as the Agricultural Bank of Western Australia by the state government to provide for farmers. Back then, WA was so big and empty that staff would travel miles between farms, sleeping on the side of the road.
  6. Bendigo Bank: Bendigo Bank offer cards with no maximum credit limit. You can personalise your card to advertise your business every time you open your wallet, with your business logo or a photo of your shopfront. Bendigo Bank serve around 1.5 million customers across Australia.
  7. Coastline Credit Union: Coastline offer cards with credit limits of up to $25,000. Their Rewarder points can be spent at any eftpos terminal, so the rewards you choose could be anything you want or need. Coastline was founded in 1966 in NSW, where they still are today.
  8. Commonwealth Bank: In 2014, CommBank received our 5-star rating for outstanding value in business credit cards for the Transactor profile. They also took out CANSTAR’s 2015 award for Bank of the Year for Small Business. They offer cards with no maximum credit limit. They provide free transit accident insurance for business cardholders. The Commonwealth Bank is Australia’s largest provider of financial services, founded in 1911 as the government bank for our young nation.
  9. Diners Club: Diners Club offer cards with no maximum credit limit, and complimentary access to 500 airport lounges around the world. Diners Club was founded in 1950 and created the first credit card in the USA.
  10. Greater Building Society: At the time of writing, Greater Building Society proudly advertise that their interest rates (from 7.35%) are lower than the average bank-issued card. Greater Building Society was founded in 1945 and they serve over 250,000 customers.
  11. Heritage Bank: Heritage offer cards with credit limits of up to $50,000, and individual spending limits for each cardholder on the company account. Heritage Bank was founded in 1981 following the merger of the Toowoomba Permanent Building Society and the Darling Downs Building Society, which were both established in the late 1800s.
  12. Hume Bank: Hume Bank offer cards with no maximum credit limit. Businesses must be existing customers in order to apply for a business credit card. Hume Bank was founded in 1955 in Albury and has more than 55,000 customers in NSW and Victoria.
  13. NAB: NAB offer cards with no maximum credit limit. Their Access business credit card is available as either Visa or MasterCard, and their rewards card offers Qantas Frequent Flyer points. NAB was founded in 1981 and is one of the big four banks in Australia, with over 12.7 million customers worldwide.
  14. Newcastle Permanent: In 2014, Newcastle Permanent received our 5-star rating for outstanding value in business credit cards for the Revolver profile. They offer cards with no maximum credit limit, and they provide free transit accident and fraudulent transaction insurance. Newcastle Permanent have also received CANSTAR’s 5-star rating for business overdrafts and deposits. Newcastle Permanent was founded in 1903 as a Starr-Bowkett society to help low income families afford to buy their own home.
  15. Queensland Country Credit Union: QCCU offer cards with no maximum credit limit. Their Rewarder points can be spent at any eftpos terminal, so the rewards you choose could be anything from groceries to fuel to clothes or school fees – a definite benefit for those living in rural areas. QCCU have almost 60,000 members in Queensland, and they live to serve regional Queenslanders as far north as Weipa and as far west as Mount Isa.
  16. George Bank: In 2014, St. George received our 5-star rating for outstanding value in business credit cards for the Revolver profile. They offer cards with no maximum credit limit, and you can earn uncapped rewards points. St. George is best known as the bank with the dragon logo. It was founded in 1937 and has 2.6 million customers in Australia.
  17. Suncorp Bank: Suncorp offer cards with no maximum credit limit. They provide free insurance for unauthorised transactions, transit accidents, and business inconvenience. Their anti-fraud security is named ‘Fraudshield’. Suncorp was founded in 1902 and remains Australia’s leading bank in regional areas.
  18. Westpac: In 2014, Westpac received our 5-star rating for outstanding value in business credit cards for the Transactor profile. They offer cards with credit limits of up to $150,000, with rewards in multiple different categories, and the option of personal, joint, or several liability for purchases. Westpac was established in 1817 as the Bank of New South Wales and serves around 13 million customers, as one of the big four Australian banks. They own a number of other banking brands including St. George, Bank of Melbourne, BankSA, and RAMS.

Recent 5-Star Winners

Business Low Rate
Bank of Melbourne: Outstanding Value Award Winner
BankSA: Outstanding Value Award Winner
St George: Outstanding Value Award Winner
Newcastle Permanent: Outstanding Value Unsecured Personal Loan
Business Rewards
Frequent Flyer