What is a business credit card?

Sven von Sperl
Sven von Sperl
July 28, 2021

Business credit cards are similar to consumer credit cards. They give you access to additional funds fast when you need it, and the expectation is that the card will be used for business-focused purchases. Business credit cards can still affect your personal credit score if you use Discover or Capital One but others won’t unless your account ends up deeply in arrears.

A business credit card will give you a credit limit, the maximum amount you can owe to the card issuer, based on your business’s credit score.  

There are many variables to consider when selecting a business credit card, the penalty interest rate if the balance isn’t cleared should be at the top of your mind. But other benefits and penalties should be evaluated as well.

Features of a business credit card

There are many types of business credit cards available to you on the market. All of them come with varying reward schemes, interest rates, extra charges and fees, and credit limits. But these extras are rarely tailored to your business needs.

Some lenders will also offer a brief interest-free period on business credit cards. But these offers are usually made to be enticing and follow-up with punishing interest rates later on.

Buy now pay later business credit cards are a strong alternative in this area. The interest-free introductory offer of other credit cards is a permanent feature for buy now pay later business credit cards.

That means that with a buy now pay later business credit card, you’re able to make interest-free purchases on a regular basis.

Apply for a business credit card

Getting an average business credit card is a simple enough goal, so long as you’re an existing customer with a bank. Becoming a business customer of a bank can take as long as 6 months depending on the bank, with no guarantee that they’ll open an account for you.

However, once that’s done obtaining the card is a matter of applying for one online or in a branch. This process can take some time and is not ideal for any business that needs credit quickly. Banks will often interrogate customers on their business, preferred credit limits, eligibility, and review bank statements. Some may also require proof of your personal credit usage history.

The benefits of business credit cards

There are many benefits to having a business credit card. You can spread out your costs, track short-term expenses, manage your cash flow, and facilitate employee spending. Those are just a few examples of the benefits of using this sort of credit.

However, you’re still restrained by agreed credit limits which are revisited on a gradual basis depending on how effectively repayments are made. The weakness of many business credit cards is that they lack the insight into your business to fully understand the movements of your cash flow.

But with a buy now pay later business credit card from Cape, you’re able to draw credit limits that are in line with your business needs and that’s tailored to your business performance.

Buy now pay later business credit cards are made to solve your immediate business credit issues without having to go through extensive checks and application procedures. And as it’s a buy now pay later product rather than a traditional credit facility, your business can make significant purchases and pay in set installments that track with your operational cash flow. So you never need to worry about fees or hidden penalty charges.

One of the greatest advantages of using this type of credit card is that you can use it as a revolving credit facility. No matter what payment is needed, whether it’s an emergency or business as usual, the business credit card can be used to pay for it and make sure that your business continues to operate without interruption.

Sven von Sperl
Sven von Sperl
July 28, 2021

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