When using a credit card for your business, an interest-free period will give you a certain edge when managing your cash flow.
But with many options available out there, finding the right interest-free card requires careful research.
In my comprehensive guide, I aim to highlight some of the best interest-free options available in the UK based on a detailed comparison of their features, perks and fees.
What are Interest-Free Business Credit Cards?
Interest-free business credit cards, at their core, operate like any other credit card. They provide businesses with a pre-set limit which can be used for purchases, balance transfers, or cash withdrawals.
What sets these cards apart is the promotional period during which no interest is charged on the outstanding balance.
This period varies by card but can range from a few months to over a year. Once the promotional period ends, a standard interest rate, often referred to as the variable APR, will apply to any remaining balance.
Why are Interest-Free Credit Cards Beneficial for Businesses?
Choosing an interest-free credit card for your business has many advantages:
Cash Flow Management – Especially for startups or small businesses that may experience irregular cash flow, an interest-free period can provide a cushion. It gives you time to manage your funds without the pressure of interest accumulation.
Capital Preservation – By using an interest-free credit card, you can maintain your cash reserves for other investments or unexpected expenses, and make sure you have liquid assets when needed.
Flexibility – The ability to spread costs over a period without interest can be particularly useful for larger purchases or unexpected expenses that may otherwise strain your company’s budget.
Building Credit – Just as with individuals, a positive credit history for a business can open doors to better financing rates and terms in the future. Using a credit card responsibly, paying off balances, and maintaining a good credit utilisation ratio can help improve your business’ credit profile.
Understanding the 0% APR Period in an Interest Free Card
A 0% Annual Percentage Rate is undeniably appealing for businesses looking to maximise their financial strategies. But in order to truly benefit from these cards, it is important to understand the nuances of the 0% APR period.
Each interest-free business credit card comes with a specific duration for which the 0% APR is applicable. This promotional period can vary between cards, with some offering just a few months, while others extend the offer for over a year.
Any balances left on the card after this period will be subject to the standard APR.
What happens after the introductory period?
Standard APR Kicks In – Once the 0% APR period ends, the credit card will revert to its standard interest rate. This rate can vary significantly based on the card issuer and the credit score of the business. It’s not uncommon for this rate to be considerably higher than average loan interest rates.
Balance Transfers – Some businesses might consider transferring the remaining balance to another card, especially if another 0% APR offer is available. However, this can involve transfer fees and might impact the credit score if done frequently.
Regular Payments – It’s vital to continue making at least the minimum required payments after the introductory period. Failure to do so can result in penalties, increased interest rates, and negative impacts on your business’s credit history.
How to Make the Most of the 0% APR Period
Plan Major Purchases – If you’re aware of significant expenses on the horizon, timing them to coincide with the 0% APR period can be financially advantageous.
Set Reminders – Mark the end date of the promotional period on your calendar to ensure you’re aware when the standard interest rate will begin to apply.
Aim for Full Repayment – While the interest-free period offers flexibility, aim to repay the entire balance before the introductory period ends. This will ensure you reap all the benefits without getting caught by high-interest rates later on.
Avoid Additional Charges – Some card activities, like cash advances, might not be covered by the 0% APR and can incur interest right away. Be sure to read the card’s terms and conditions.
Review Multiple Options – Before settling on a card, compare multiple 0% APR offers. Look beyond just the duration and consider factors like the post-promotional interest rate, annual fees, and other benefits.
The Best Interest-Free Business Cards in the UK
When it comes to interest-free business cards in the UK, multiple options are available, each offering unique features and benefits. Below, I have reviewed some of the best interest-free business cards in the UK.
| Card | Fee | 0% Period | APR | Apply |
|---|---|---|---|---|
 Barclays Premium Plus | £150 p/a | 6 Months | 56.4% | Apply Now |
 Lloyds Bank Business | £32 p/a | 45 Days | 22.4% APR (Variable) | Apply Now |
 Metrobank Business Credit Card | £0 | 56 Days | 14.9% (Variable) | Apply Now |
 Santander Cashback Credit Card | £30 p/a | 56 Days | 23.7% (Variable) | Apply Now |
1. Best Overall Interest-Free Business Credit Card – Barclaycard Premium Plus
The Barclaycard Premium Plus is ideal if your business has frequent overseas operations and you wish to access premium benefits at a low cost. This card will give you an unequalled sense of exclusivity at a moderate cost.
The initial 0% interest rate on purchases for six months, followed by a competitive ongoing rate of 19.9% makes this card a great option for your cash flow management. If you’re based in the UK, the card also offers 56 days of 0% interest on sterling transactions, which is great if your business relies on timely invoice payments.
The card will grant you pleasant advantages from business travel insurance and Priority Pass lounge access to discounts with Barclaycard’s Business Rewards partners. Brands such as Amazon Business, Experian, and booking.com are among the affiliates.
You can get additional cards for eligible employees, which facilitates day-to-day expense management. Plus, the absence of a fee for additional cardholders is a really nice addition.
The annual £150 is on the expensive side, considering a lot of competitors offer free credit cards, but if you make frequent use of the card, the perks and rewards should easily offset the cost.
| Feature | Value |
|---|---|
| Card Name | BarclayCard Premium Plus |
| Cashback | 0.5% Cashback on Purchases |
| Annual Cost | £150 |
| Interest Rate | 0% For 6 Months, then 19.9% |
| Additional Cards | Available for team members at no extra cost |
2. Great Card for Low Purchase Rate – Lloyds Bank Business Credit Card
The Lloyds Bank Business Credit Card is targeted toward small and medium businesses, especially those that deal with inconsistent invoice payments. The card’s 16.3% standard purchases rate is below average and is interesting for managing your day-to-day finances.
If you pay your balance in full every month, you will benefit from up to 45 interest-free days for each billing cycle. Do note, however, that this grace period doesn’t extend to cash withdrawals.
You’ll have the option to get up to 20 cards for your employees, which might come in handy if your business departments require separate expense accounts. Each card can be issued with its own spending cap, which adds a nice level of financial control. However, be aware that each additional card will cost you its own £32 annual fee.
| Feature | Value |
|---|---|
| Card Name | Lloyds Bank Business Credit Card |
| Cashback Percentage | ❌ |
| Annual Fee | £32 per Card |
| Interest Rate | 0% For 45 Days, then 16.3% |
| Additional Cards | Up to 20 cards, each with their own £32 annual fee |
3. Great Challenger Card – Metrobank Business Credit Card
Metro Bank’s business credit card is designed to be straightforward and simple to understand. It comes with no annual fee and uses a single interest rate for all types of transactions. This is great if you are looking for a no-nonsense credit solution.
By using this card, you can enjoy up to 56 days of 0% interest on purchases, assuming, of course, the balance is paid in full and on time each month. This might offer a welcomed respite when managing your business cash flows.
The standard interest rate is 14.9%, which is still pretty low compared to the competition.
If you’re trading or travelling within Europe often, the card offers a substantial benefit – 0% fees on non-sterling transactions.
Finally, if you plan on growing your workforce, you will be able to issue 25 additional cards for your team, for free.
| Feature | Value |
|---|---|
| Card Name | Metrobank Business Credit Card |
| Cashback | ❌ |
| Annual Fee | £0 |
| Interest Rate | 0% For 56 Days, then 14.9% |
| Additional Cards | Up to 25 cards, for free |
4. Great Card for Cashback – Santander Business Cashback Credit Card
The Santander Business Cashback Credit Card is a great choice if you aim to optimise your credit card usage and rewards.
The card offers a standard 56 days interest-free each billing cycle, and a standard purchase rate of 18.9%, which is decent, especially when combined with the cashback reward.
There is a consistent 1% cashback on all purchases, which gets credited monthly into the credit card account. Given the only limitation is the overarching credit limit, your business can potentially gain a lot from this feature, especially if you use the card regularly.
Unlike many competitors, Santander adopts a per-business charging approach rather than per card, which can lead to significant savings.
The possibility of adding up to three extra cardholders, potentially from your employee base, without any additional cost, makes it an economically sound choice, even though three cards only seem quite limited compared to the competition.
| Feature | Value |
|---|---|
| Card Name | Santander Business Cashback Credit Card |
| Cashback | 1% Uncapped |
| Annual Fee | £0 |
| Interest Rate | 0% For 56 Days, then 23.7% |
| Additional Cards | Up to 3 Additional Cards, for free |
FAQs
What is an interest-free business credit card?
An interest-free business credit card is a type of card that offers a 0% introductory interest rate for a specified period on purchases, balance transfers, or both. After this promotional period, the card’s regular interest rate will apply.
How long does the 0% introductory rate last?
The duration of the 0% rate varies between card issuers. It can range anywhere from a few months to over a year. Always check the card’s terms and conditions for specifics.
Are there fees associated with an interest-free business credit card?
While these cards may offer 0% interest for a period, there could still be annual fees, balance transfer fees, cash advance fees, and foreign transaction fees. Make sure to read the card’s fee schedule.
What happens after the 0% introductory period ends?
Once the introductory period ends, any remaining balance will be subject to the card’s standard interest rate. This rate will also apply to new transactions unless another promotional rate is in effect.
Can I transfer balances from other credit cards?
Many interest-free business credit cards allow balance transfers, but it’s essential to check if the 0% rate applies to these transfers and if there’s a fee involved.
Does the 0% interest rate apply to cash advances?
Typically, the 0% rate does not apply to cash advances. Cash advances often come with their own interest rate and fees, so always check the card’s terms.
How can an interest-free business credit card benefit my business?
Such cards can help manage cash flow by allowing a business to make necessary purchases without incurring interest for a set period. They can also aid in consolidating business debt if balance transfers are included in the 0% offer.
What should I watch out for when using an interest-free business credit card?
Ensure you’re aware of when the promotional period ends and the regular rate kicks in. Also, avoid making late payments, as some cards may revoke the 0% offer if you miss a payment.
