Using payment cards for your business

Types of payment cards available


If you are looking to buy or sell goods or services using payment cards, the main card types to be aware of are:

1. Credit cards

  • allow the cardholder to spend up to a specified credit limit
  • offer the account holder an interest-free period
  • require the account holder to repay at least the minimum amount each month, but charge interest on the unpaid balance
  • incur no interest if the bill is paid in full by the specified date
  • can be issued to employees, with an approved spending limit

There are numerous credit card providers - most are Visa or MasterCards issued through a bank or building society.

Read more about Visa credit cards and MasterCard credit cards.

2. Debit cards

  • are issued in conjunction with a bank or building society current account
  • limit the cardholder to the funds available in that account plus any overdraft, if available
  • may offer a greater degree of control - you can only spend what's in your account
  • have less flexibility than other cards

3. Charge cards

  • may require the account holder to pay an annual fee
  • allow the cardholder a period of credit, but - to avoid additional fees - this must be paid off in full each month
  • can be issued to employees
  • allow you to set spending limits

4. Pre-paid cards

  • can be provided pre-loaded - eg for staff to pay expenses
  • enable businesses to manage and monitor spending
  • are available in different currencies, so can be used as an alternative to business travel cards
  • usually incur various fees and charges

5. Business travel cards

  • operate in the same way as other business credit or charge cards
  • can offer a convenient way for staff to pay for business travelling expenses
  • often offer additional benefits, such as travel insurance or currency facilities

6. Purchasing cards

  • are generally restricted to buyers for large businesses or public sector bodies
  • are designed to cut down on paperwork and the need for purchase orders

Issuing payment cards to staff

With the exception of debit cards - which must be used by the signatory - all the other types of payment cards outlined above can be issued to staff for them to make business-related purchases.

Contactless payment technology

Contactless cards utilise the security built into chip and PIN cards, and can be used for transactions of £100 or less. The aim of contactless payments is to speed up transactions.

Read more on contactless cards.

You could use a personal debit or credit card instead of a business card for business expenses, however this means you will be mixing personal debts with business debts.