Free business credit cards UK: no annual fee cards, and what the catch is

The short list

• Limited company or LLP: Capital on Tap. £0 annual fee, unlimited free employee cards, 0% non-sterling transaction fee, and 1% cashback from the first pound with no threshold. It is the card I use.
• Limited company wanting an alternative: iwoca (£0 fee, 1% cashback on all spending, credited to the balance, 0% (Visa exchange rate) FX), or Funding Circle (£0) if you have a year of trading behind you.
• Sole trader: Barclaycard Select Cashback (£0), which accepts sole traders and states no current account requirement; Zempler (£0) is the other free option without a bank account requirement listed.
• Happy with your high-street bank: its own card may cost nothing in year one and nothing after if you spend enough, but check the per-card fee before ordering staff cards.
• Want Amex points: American Express Business Gold is £0 in year one, then £195.

Genuinely free business credit cards

These charge no annual fee in any year. Capital on Tap is first because it is the card we use. Tide’s business credit card is Capital on Tap’s card brokered by Tide, so it is not counted separately.

Read across the rows and the free cards split in two. Capital on Tap, iwoca and Funding Circle are specialist lenders for limited companies: all three pair the £0 fee with 1% cashback and a 0% non-sterling fee. Barclaycard Select Cashback, Metro Bank Business Credit Card and Zempler Bank Business Credit Card accept sole traders, but each gives something up: Barclaycard Select pays 1% cashback, uncapped, but only in months when you spend more than £2,000 and charges 2.99% abroad; Metro pays none and needs its current account; Zempler pays 1% cashback on the first £100,000 of eligible spend a month but its representative APR is unclear (21.9% APR representative (variable) on the web page; the linked summary box says 29.9% representative and a maximum limit of £5,000).

Free at first, or free if you spend

These cards have an annual fee but waive it in the first year, above a spending level, or both. Most are high-street bank cards, and most charge per card rather than per account, which matters as soon as you add staff.

The spend waivers look generous but are worth reading closely. The pages do not make clear whether the spending test applies to each card or to the whole account; if it is per card, an employee card used for the occasional train ticket would still pay. Year-one waivers are a trial, not a price: after twelve months the fee applies unless you meet the condition. Amex Business Gold is a charge card, not a credit card, so it must be cleared in full each month, and after year one its fee is the largest in this group.

Cards that always charge a fee

These charge every year. That is not automatically bad: a fee can buy lower FX charges, travel insurance, category cashback or airline points. But it is guaranteed, while the benefits depend on how you use the card.

Santander’s £30 is the smallest real fee and buys 1% cashback, uncapped, paid monthly with 0% on purchases in the local currency; the page adds that the £30 fee is added when you activate the card and is charged even if you do not use it. Co-operative Bank charges £24, and the page does not say whether the fee is per card or per account. NatWest Business Plus charges £70 per card and has no free first year, including for startups. At the top end, the fees buy travel perks and points rather than cheaper borrowing.

Catch 1: per-card fees multiply with employee cards

A card at £30 a year for one director costs £150 a year for a team of 5 if the fee is charged per card. Most high-street business cards charge that way: NatWest (£30 per card; free in year one and waived with £6,000+ annual spend), Lloyds (£32 per cardholder; free for the first 12 months and waived with £6,000+ annual spend), HSBC (£32 per card after year one), Virgin Money (unlimited, each with its own limit; £28 a card after year one) and NatWest Business Plus (£70 a year per cardholder). Capital on Tap gives you unlimited free employee cards with per-card limits, and you can set limits per billing period or per transaction. Here is the illustrative cost of one main card and four employee cards.

Santander is left out because it allows up to 3 additional cardholders (4 cards in total), no extra fee; every director or partner must hold one, and Co-operative Bank because its employee card cost is not stated. Metro and Zempler state no employee-card cost in our data. For a business with several people spending, this line decides more than the headline fee; the business credit cards for employee cards page compares controls as well as cost.

Catch 2: a free card can pay nothing back

A free card with a cashback threshold can earn you nothing in a quiet month. Barclaycard Select pays 1% cashback, uncapped, but only in months when you spend more than £2,000. Lloyds pays 1% on fuel and EV charging, 0.5% elsewhere, in months you spend £2,000+. Metro and HSBC pay no rewards at all. Capital on Tap pays 1 point per £1 on everything, from the first pound, and iwoca pays 1% cashback on all spending, credited to the balance. The effective rate at different spend levels is worked out on cashback business credit cards.

Catch 3: foreign transaction fees

A card with no annual fee can still cost more than one with a fee if you spend in other currencies. Barclaycard Select charges 2.99%; Zempler 2.99%; Metro 0% in SEPA Europe; 2.99% elsewhere. On £500 a month of dollar software, a 2.99% fee is about £179.40 a year, more than most annual fees. Capital on Tap charges 0% non-sterling transaction fee, as do iwoca (0% (Visa exchange rate)) and Funding Circle (0%). Every Capital on Tap charge, including cash withdrawals, is on the Capital on Tap fees page.

Catch 4: the bank account requirement

Most bank cards are only for that bank’s own business customers. Of the credit cards on this page, 9 say so: Metro Bank Business Credit Card, NatWest Business Credit Card, Lloyds Bank Business Credit Card, HSBC Commercial Card, Virgin Money Business Credit Card, Bank of Scotland Business Credit Card, The Co-operative Bank Business Credit Card, Santander Business Cashback Credit Card and NatWest Business Plus Credit Card. If you are happy where you bank, that may settle it. If not, a free card from your bank can come with the cost of moving your account.

Capital on Tap is not a bank and has no current account to move you to. It says you need a business bank account, with any bank, to apply, and you can connect more than one business bank account; the account you use is one you already hold. Funding Circle says no need to switch your business banking. The full list is on business credit cards that don’t need you to switch bank, and the head-to-head is Capital on Tap vs the high-street banks.

Catch 5: interest if you carry a balance

No annual fee says nothing about the interest rate. Credit cards generally charge no interest on purchases cleared in full by the due date (check each card’s terms); carry a balance and the rate matters more than any fee. The free cards publish representative APRs: Barclaycard Select Cashback, 25.5% APR representative (variable); Metro Bank Business Credit Card, 18.9% APR representative (variable); Zempler Bank Business Credit Card, 21.9% APR representative (variable) on the web page; the linked summary box says 29.9% representative and a maximum limit of £5,000; Funding Circle Cashback Business Credit Card, 34.9% APR representative (variable); from 14.9%; iwoca Credit Card, 35.40% APR representative (variable); rates from 14.99%. Capital on Tap does not publish a representative APR. It advertises rates as low as 13.86% APR (variable), and your rate depends on your personal and business credit history and the Bank of England base rate. On Capital on Tap, as on the others, there is no interest on purchases if you pay the statement balance in full by the due date. The practical answer is in how to avoid business credit card interest.

One more point on Capital on Tap specifically: the free card is not a trial of the paid one. Pro costs £299 a year and adds travel perks; most businesses will never need it, and the Capital on Tap Pro page does the break-even arithmetic for those that might.

Who should choose which

For a limited company or LLP, Capital on Tap is free in the ways that matter: no annual fee, no charge for staff cards, no foreign transaction fee, and cashback with no threshold. It is the card I use. It is not available to sole traders, so if that is you, read the sole trader guide and the Barclaycard Select Cashback review. Every card, on every measure, is in the business credit cards comparison.