Business Credit Cards and Charge Cards

Company or business credit cards are one of the most popular ways for Australian businesses big and small to manage cash flow and everyday expenses. They can be an excellent alternative to relying on cash or having to take out a larger loan, plus many cards come with the additional perk of earning you rewards points on purchases.

But which is the right card for your business and what are the factors you’ll need to weigh up when comparing cards? We’ve wrapped up the key features of business credit cards below, including some of the most frequently asked questions about them.

What are the types of business credit cards?

Like personal credit cards, there are a range of different types of business credit cards on offer, each with their own set of benefits and drawbacks. As a business you’ll need to determine which type of card best matches your needs. Some of the most common types of cards including: low interest, low annual fee, rewards and platinum.

Low rate business credit cards

Do you generally carry a balance on your credit card each month? If so, it may be worth comparing low interest rate cards to reduce the interest on your debt. For some perspective, business credit card interest rates in the Mozo database range from around 7.50% all the way up to 25%, with a low rate card typically classified as having an interest rate below 13%.  

Low fee business credit cards

Looking for a no frills card that lets you pay for your business expenses without costing the world? Given that annual fees on some platinum and rewards cards can easily go into the hundreds of dollars, you may want to think about a more budget-friendly option like a low fee business credit card.

Rewards business credit cards

These cards reward you with points when you spend on eligible purchases, which can then be redeemed for everything from flights to gift cards. Whether it’s a frequent flyer rewards program (like Qantas or Velocity) or the rewards program offered by your provider, there are plenty of points earning options out there.

Platinum business credit cards

Want the next step up from a rewards card? Platinum business credit cards tend to offer even more generous rewards point earn rates and bigger bonus offers than standard rewards cards, plus they often come with additional features such as complimentary insurances (including travel insurance) and other membership perks.

Business credit card fees and features to consider

So now that you know about the types of business credit cards that are available, what are some of the features and costs you’ll need to weigh up when comparing business credit cards? Here are some of the main ones:

Interest rate: The interest rate (or purchase rate) on your card might not be important if you’re paying your balance off on time each month, but if you’re likely to carry a balance then finding a card with a lower interest rate can help you keep your costs down.   

Annual fee: With fees ranging from tens to hundreds of dollars, it’s worth comparing the annual fee attached to a credit credit card to ensure that it doesn’t overshadow the benefits it provides.  

Interest free days: Many business credit cards come equipped with anywhere from 40 to 55 interest free days for card holders who are able to pay off their balances each statement period.

Overseas fees: Do you, or someone else in your business, regularly travel internationally for work? If that’s the case and you use your business credit card to pay your way overseas then it may be worth checking out the foreign exchange margin on the card. 

Rewards: Accruing rewards points is one of the main perks associated with using a business credit card, but not all cards are alike, so it’s worth making sure that you’re familiar with the points earning rate on offer, as well as what those points can be redeemed for.

What is a charge card?

Charge cards function very much like credit cards, except instead of a pre-set spending limit, your card issuer will approve purchases based on factors such as your spending patterns and credit history. Cardholders will have to pay off their balance in full each month, and failure to do so will incur fees or penalties. Because of the way charge cards are structured, there are no interest rates and minimum repayment amounts as there are with credit cards.

How is a charge card different from a credit card?

A charge card differs from a credit card in a few important ways. For one, it doesn’t have any pre-set spending limits, which can mean increased flexibility and greater purchasing power for cardholders. 

There’s also the fact that charge cards do not incur any interest. And unlike credit cards, which allow you to pay off your balance over time, your charge card balance must be paid off in full each month otherwise a fee will apply.

Business credit card funding alternatives 

Here are some of the other common funding solutions Australian businesses rely on: 

Personal credit cards 

As we mentioned above, there are a number of reasons why it can be beneficial to use a business credit card over your personal one. However, that doesn't mean you won’t be able to use a personal card for everyday business expenses. For a range of personal credit cards, check out our credit card comparison tables. 

Business line of credit 

Similar to a business credit card, a business line of credit is essentially a revolving credit facility which businesses can draw down on to pay for everything from employee salaries to invoices. The benefit of a line of credit over a credit card can be in the fact that lines of credit are often larger.   

Business loan 

One of the most popular financing options for businesses big and small is a business loan. Business loans range in size (generally from $5k - $500k), can be secured or unsecured and can be used for a range of purposes including new equipment purchases, paying wages and even business expansions.