Business Credit Card Rates, Fees and APR
Representative APR is just the headline. The fees that actually decide whether a card is cheap or expensive are spread across half a dozen categories — many hidden in the Summary Box. Here's a plain-English decoder.
UK business credit cards typically charge a representative APR of 15%–35% (variable), a 2.5%–3% fee on cash advances with interest from day one, 2.75%–2.99% on non-£ transactions, £0–£300+ annual fee depending on tier, and £12 for late or returned payments. The cheapest card overall is the one you can comfortably repay in full each month — APR becomes irrelevant if you never carry a balance.
What APR actually means on a UK business credit card
APR (Annual Percentage Rate) is a regulated, standardised figure that combines the interest rate and certain mandatory fees over a year. The "representative" APR is the rate at least 51% of accepted applicants will get — your personalised rate could be higher. APR is variable on almost all business cards, meaning it can change with the Bank of England base rate.
Critically, APR only applies to balances you don't repay by the statement due date. If you pay in full every month, you generally pay no interest at all on purchases. That's why APR matters less than fees for disciplined cardholders, and matters a lot for businesses that revolve a balance.
Purchase rate vs APR — the difference
The Summary Box usually shows two interest figures:
- Purchase rate — the monthly or annual interest charged on purchase balances carried beyond the interest-free period.
- APR — the purchase rate plus annual fees (and certain other charges) annualised in a regulator-defined way.
That's why two cards with the same purchase rate can show different APRs — the card with an annual fee shows higher APR because the fee is rolled in.
Cash advance fees — almost always to be avoided
Withdrawing cash on a credit card or using cash-equivalent transactions (gambling, money transfers, some crypto purchases) triggers:
- A cash advance fee (typically 2.5%–3% of the amount, minimum £3)
- Interest from day one — no interest-free period applies, even if you repay before the statement
- A possibly higher cash advance APR (sometimes 5%+ higher than the purchase rate)
- A note on your credit file — frequent cash advances are interpreted as financial stress by other lenders
A £500 cash withdrawal at 3% + 27.9% APR repaid after 30 days costs you roughly £15 fee + £11 interest ≈ £26. That's a 5%+ effective cost for one month of access to cash. Use an overdraft or short-term loan instead.
FX fees and the cost of foreign spend
Most UK business credit cards charge a non-sterling transaction fee of 2.75% or 2.99% on every purchase outside the UK or in a currency other than GBP — including online subscriptions billed in USD or EUR even when you're sitting in London.
| Card style | Typical FX fee | Notes |
|---|---|---|
| Standard high-street business card | 2.75% – 2.99% | Stacked on top of the network's wholesale rate |
| Premium rewards card (Amex) | 2.99% | Watch for double-charging in card networks that aren't Amex direct |
| No-FX-fee specialist (some Halifax Clarity-style cards, business debit alternatives) | 0% on purchases | ATM fees usually still apply; check business eligibility |
| Multi-currency business account card (Wise, Revolut Business) | 0% within balances held in that currency | Effectively a debit card on prepaid balances |
If you spend meaningful amounts in foreign currency, separating that spend onto a no-FX-fee card or multi-currency account can save more than any rewards programme will earn.
Annual fees
Range from £0 (Capital on Tap standard, Tide Cashback) to several hundred pounds for premium travel cards. To judge whether an annual fee is worth it, calculate the break-even rewards rate: annual fee ÷ expected annual spend. If a £180 card needs 0.9% effective rewards on £20,000 of spend to break even, and the card pays 1.5% on your category mix, you're £120/year ahead.
Late payment, returned payment and default charges
UK rules cap late and returned-payment fees at £12 per occurrence on most consumer credit. Business cards aren't strictly bound by the same cap but most providers charge a similar amount. The bigger cost of a missed payment is usually:
- Loss of the interest-free period — interest is charged on the entire balance back to the transaction dates
- A late marker on your business and personal credit files for up to 6 years
- Potential default if missed payments accumulate, which can trigger account closure and a demand under the personal guarantee
Set up a Direct Debit for the full statement balance. It costs nothing, removes 95% of the risk, and means you only pay interest in genuine emergencies.
Comparing two cards properly
Build a one-screen comparison with every line item that affects your spending pattern:
| Fee / rate | Card A | Card B |
|---|---|---|
| Representative APR (variable) | 26.5% | 29.9% |
| Annual fee | £0 | £195 |
| Cashback / rewards rate | 1% flat | 1.5 pts/£1 (≈1.0p each) |
| FX fee on non-£ spend | 2.99% | 2.99% |
| Cash advance fee | 3% (min £3) | 3% (min £3) |
| Late payment fee | £12 | £12 |
| Interest-free period (purchases) | Up to 56 days | Up to 55 days |
| Personal guarantee required | Yes | Yes |
Plug in your real annual spend, FX share and intended balance behaviour. The card that wins on paper for one business often loses for another.
Frequently asked questions
Related guides
Borrowing can put your business and personal finances at risk if not managed carefully. Only borrow what you can afford to repay. Credit is subject to status and eligibility. Check the latest fees, APR and terms with the provider before applying. This site does not provide financial advice.
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Information on this page is general guidance for UK small businesses and is not financial, tax or legal advice. Tax rules, allowances and product terms change. Always check current information with HMRC, Companies House or a qualified professional before making decisions.