Choosing the right cash back business credit card is essential for any business looking to maximise rewards from daily expenses. With various options available, businesses must carefully weigh the benefits and drawbacks to select the best cash back business credit cards for their needs. This article provides an in-depth analysis of key factors that impact the performance of these cards, the challenges they present, and the importance of business structure, especially for sole traders.
When selecting a business credit card with cashback, several critical factors must be considered. These include cashback percentage, fees, eligible spending categories, and credit limits. Here's a detailed look at each:
One of the most important features to examine is the cashback percentage offered by the card. Most business cash rewards cards provide between 1% and 3% cashback on purchases, depending on the card issuer and specific spending categories. For example, the Capital on Tap Business Credit Card offers 1% cashback on all purchases, with the option to redeem for cash or rewards like Avios points. In comparison, some cards like the Barclaycard Business Select Cashback Credit Card offer a tiered structure, where businesses can earn higher cashback rates for the first few months.
Not all purchases qualify for cashback. While some cards offer universal cashback on all transactions, others restrict rewards to specific categories such as office supplies, utilities, or travel expenses. For example, the NatWest Business Plus Credit Card offers up to 3% cashback on specific categories like fuel or electric vehicle charging stations. It’s important for businesses to understand their primary expenses and choose a card that maximises cashback in those areas.
Some of the best cash back business credit cards come with no annual fees, such as the Santander Business Cashback Credit Card. However, premium cards like the Barclaycard Business Cashback Premium Plus card, which offers enhanced benefits such as airport lounge access, charge higher fees (up to £150 per year). When considering fees, businesses should evaluate whether the rewards and additional features justify the cost of the card.
For businesses that operate internationally, choosing a business credit card with cashback that has low or no foreign transaction fees is crucial. Many cards, such as the Capital on Tap Business Credit Card, eliminate foreign transaction fees altogether, allowing businesses to save on overseas purchases. In contrast, some cards like the Barclaycard Business Cashback Card impose fees of around 2.99% for foreign purchases.
High interest rates can erode the benefits of a cashback card. For instance, the interest rate on the Capital on Tap Business Rewards Credit Card can reach up to 59.15% APR (variable), which can significantly impact businesses that carry a balance. It’s essential to consider the card’s interest rate alongside the cashback benefits to ensure that any potential rewards outweigh the costs.
While cashback rewards can be beneficial, there are several challenges businesses should be aware of:
Not all business cash back cards offer flexibility in how cashback rewards can be redeemed. Some cards only allow cashback to be applied as a statement credit, while others provide more options, such as converting rewards into vouchers or airline miles. For instance, the Capital on Tap Business Credit Card allows businesses to redeem points for cash, gift cards, or Avios points, which adds flexibility:contentReference[oaicite:10]{index=10}. Before choosing a card, businesses should ensure the redemption options align with their preferences.
One of the significant limitations of some of the highest cash back business credit cards is that they are often unavailable to sole traders. Cards like the Capital on Tap Business Credit Card are restricted to limited companies (Ltd) and limited liability partnerships (LLP), excluding sole traders from eligibility. This can be a challenge for self-employed individuals who want to benefit from a business cashback card. Sole traders may need to explore alternative business structures to access these financial products.
The structure of your business has a direct impact on the types of financial products available to you. Sole traders, in particular, often face challenges in obtaining cash back business credit cards due to their personal liability and perceived risk by card issuers. This makes it essential for sole traders to evaluate whether restructuring into a limited company could provide better access to financial tools like the best cash back business credit cards.
Many financial institutions prefer to offer credit cards to limited companies due to the separation of personal and business liabilities. Limited companies are seen as less risky since their financial obligations are tied to the business rather than the individual. Additionally, limited companies often have higher spending thresholds, making them more attractive to card issuers.
Sole traders may still have some options available, but these are often less competitive than the cards available to limited companies. Some cards, like the Santander Business Cashback Credit Card, may still be accessible to sole traders, but with lower cashback rates and fewer benefits. Alternatively, sole traders might consider restructuring as a limited company to access better financial products, including the highest cash back business credit cards.
When selecting a business credit card with cashback, it's essential to consider a range of factors, including cashback percentage, fees, eligible spending categories, and the impact of business structure on eligibility. While many of the best cash back business credit cards offer generous rewards and valuable features, they often cater to limited companies, making it harder for sole traders to access them. By carefully evaluating the options available and considering the possibility of restructuring, businesses can find the right card to maximise their rewards and streamline their financial management.
