Business Credit Cards - Types On The Market

TJ RYAN
13 July 2016
What type of business credit card would best suit the needs of your company? We explain the types of credit cards on the market for small businesses and large corporations.

Most businesses operate with at least one credit card. For some, it is a regular spending tool that is paid off each month and for others it is an essential form of short-term lending to cover them when cash flow is down.

Source: Kochie’s Business Builders: News You Can Use

Our business credit card star ratings methodology identifies two main categories of business credit card users, as follows:

Profile Name Description
Low Rate Businesses that revolve a debt from month to month and pay interest on a balance owing.
Rewards Businesses that pay off their credit card balance in full each month and are eligible to earn rewards on their spending.
Frequent Flyer Businesses that pay off their credit card balance in full each month and would benefit from rewards through a frequent flyer program.

Our ratings methodology compares the types of business unsecured credit and charge cards in Australia and assesses cards for an array of characteristics such as:

  • Fees and Interest Rates
  • Number of Interest Free Days
  • Standard Features
  • Premium Features
  • Reward or Loyalty Programs, including earn rate and points capping
  • Companion Cards
  • No Frills

The type of card profile your business fits into will help indicate the type of credit card that will net your business the best value. Here are some general tips for each type of card user:

For a Low Rate Card…

Business-credit-card-types-low-rate-card

 

  • Do look for a card with a low interest rate
  • Do look for a low annual fee
  • Don’t be dazzled by cards offering big rewards – they come with hefty interest rates and annual fees
  • Don’t spend extra just to earn rewards
  • Don’t decide on a card until you do your sums

For a Rewards Card…

Business-credit-card-types-rewards-card

 

  • Do look for a card where the potential rewards outweigh the annual fee, and the annual fee is reasonably priced
  • Do look for maximum interest-free days
  • Do look for a rewards program that provides the benefits you value, without excessive conditions on earning points
  • Don’t spend extra just to get rewards
  • Don’t miss payments or the high interest rate will outweigh the card’s benefits and perks
  • Don’t fall for sign-up bonuses – look for ongoing benefits
  • Don’t decide on a card until you do your sums

For a Frequent Flyer Card…

Business-credit-card-types-frequent-flyer

  • Do look for a card where the potential rewards outweigh the annual fee
  • Do look for a rewards program that provides the benefits you value, without excessive conditions on earning points
  • Do look for frequent flyer benefits such as airline lounge access
  • Do look for free travel insurance
  • Don’t spend extra just to get rewards
  • Don’t miss payments or the high interest rate will outweigh the card’s benefits and perks
  • Don’t fall for sign-up bonuses – look for ongoing benefits
  • Don’t decide on a card until you do your sums

Irrespective of your user type, it always pays to shop around. The products on offer continually change, both in terms of the interest rate and the other features and benefits.

Putting aside less than an hour of your time to research the current offerings could end up being a great return on investment for your business.

 

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Research and ratings are provided Canstar Research Pty Limited ABN 29 114 422 909, AFSL and Australian Credit Licence No 443019 ("Canstar Research"). Website, services, comparisons and advice in relation to financial products are provided by Canstar Pty Limited ACN 053 646165, AR 443019 (“Canstar”). Any advice is general and has not taken into account your objectives, financial situation or needs. Consider whether the advice is right for you. Consider the product disclosure statement before making a purchase decision. Canstar provides an information service. It is not a credit provider, and in giving you information about credit products Canstar is not making any suggestion or recommendation to you about a particular credit product.

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