Business Credit Cards

Summary of Business Credit Cards
Business credit cards have different purposes for different businesses and their unique needs. To understand the offers better, we reviewed all business credit cards offered by ASB, ANZ, BNZ, Kiwibank and Westpac. In doing so, we have determined one card for the following categories:

• Best Cashback Business Credit Card - for businesses looking to benefit directly, in cash, from everyday spending
• Best Airpoints per Dollar Spend Business Credit Card - for businesses looking to earn free Air New Zealand travel
• Best Low-Interest Rate and Longest Interest-Free Period Business Credit Card - for business looking to manage cash flow and expenses with low-cost options
• Best Overseas Foreign Exchange Fee Credit Card - for business spending significant proportions in foreign currencies
• Best Prepaid Business Credit Card - for businesses looking to manage team expenses without the hassle

Business Credit Cards - Our Guide
​Credit cards for business use have many benefits for cardholders, including low-interest repayment terms, Airpoints Dollars, free travel insurance, cashback, rewards and adding additional cardholders free-of-charge. However, a card for one business may not always suit another.

MoneyHub’s guide to business credit card looks at the latest offers, the fees, the benefits and any important terms and conditions. Our guide covers:

• What is a business credit card?
• How do business credit cards work?
• Who are business credit cards designed for?
• How much does a business credit card cost?
• What types of business credit cards are there?
• ​What are the benefits of a business credit card?
• Compare Business Credit Cards​
• Applying for a Business Credit Card
• Three Things to Know About Business Credit Cards

A business or company credit card operates very similar to a personal credit card and can help a business manage different expenses. Business credit cards can be used by both business owners and employees and are either paid by the business or employee directly. Like a personal credit card, the business credit card has the name of the person using it as well as the name of the company printed on it.

You can use a business credit card just like you would a personal credit card, although some employers may have policies on what it can and can’t be used for. The benefits can include free travel insurance, Airpoints Dollars, cashback and rewards. 

A business credit card is covered by the Credit Contracts and Consumer Finance Act, so you have the same legal rights and obligations just like you do with a personal credit card. 
​
Applying for a business credit card is similar to applying for a personal card, with some minor differences. 

Business credit cards operate much like a personal credit card does. Every card has: 

1. A credit limit: Every card will come with a credit limit, set by the issuing bank. This credit limit is the maximum you can spend on the card.
2. An interest rate: The card will stipulate what the annual interest rate is for purchases and cash withdrawals. This can range from anywhere between 15% to as high as 25%. 
3. An interest-free period: The card will offer up to 44 or 55 days of interest-free purchases. This means that if you buy something on 1 January, then payment will be due on February 14 or 25, depending on the terms of your bank. Your billing cycle will usually run by month, meaning a purchase made on 31 January would still be required to be paid the following month.
4. The minimum monthly repayment: Once you have used the card and built up a balance to pay, you have to pay back a certain minimum back on the due date. This is either a dollar amount or a percentage (around 2% to 5%). What amount that remains unpaid after the due date is charged interest. 
5. An annual fee: This can range from $0 to $1,250 (the Amex charge card) based on the business credit cards available today in New Zealand.
   
6. Foreign currency conversion fees: If you make a purchase in a non-New Zealand Dollar currency, a fee will apply to convert the amount to New Zealand dollars.  

Each card has its specific eligibility requirements, but generally, you can apply for a business credit card if you meet one of the following criteria:

• Operate as a sole trader
• Own a company or are a partner in a partnership
• Work and/or make purchases for a large company
• What card you are offered and the size of the credit limit will depend on the size and financial capability of your business, and if you have an existing relationship with the bank. 

The cost of a business credit card is more than just the annual fee. If your business relies on credit to operate, you will also need to consider the annual interest rate, over-limit and late payment fees. 

1. Annual fees: Almost all business credit cards charge an annual fee, although from time to time offers do exist which waive the fee for the first year. 
2. Interest rates: This is the significant cost of any credit card; a difference of even 5% between cards can make a $500 difference if a closing balance of around $10,000 is paid late every month throughout the year. 
3. Late payment and over-limit fees: If you are late to pay, have a direct debit bounce or go over your credit limit, charges will apply and be added to the credit card balance.
4. Cash withdrawals: if you take out money from an ATM, a cash advance fee applies, as does an interest charge (which is usually above the standard interest rate). Interest is charged from the moment you make the withdrawal.
5. Foreign currency conversion fee: If you use your card for any purchases in a foreign currency, you will pay between 1.85% and 2.50% to convert the balance back into New Zealand Dollars. This applies to any purchase - overseas orders, online purchases and an overseas business trip.

Different business credit cards offer different benefits. We outline key differences:

1. Low interest and/or low fee – these are cards that position themselves as being affordable. If rewards or free travel perks are not a priority, generally the lower the interest rate, the better the card for a business (all other things being equal). 
2. Cashback: Cashback benefits offer a certain percentage of your spend (usually 0.50% to 1.50%) refunded to your card every year. For example, if you spent $10,000 in 12 months, you would get back $200 if the card offered 1% cashback.
3. Reward points: ASB and Westpac specifically offer these; you earn points for use on products and services. These typically are not as good value as cashback benefits, and we have not reviewed them because the value of a reward point is subjective, difficult to quantify and not a top priority for business users.
4. Airpoints Dollars: This allows you to earn credit for travel on Air New Zealand based on what you spend, for example, 1 Airpoints Dollar per $75 spent. You can also earn ‘Status credits’ which help cardholders achieve frequent flyer tier benefits.