Business credit card glossary: UK terms explained A to Z

Business card terms are mostly the same as personal card terms, with a few that only matter to a company: the personal guarantee, the director’s loan account, employee cards. Where a definition mentions Capital on Tap, the figure comes from its own published terms, linked in the sources at the foot of the page. Each term has its own link, so you can share or bookmark a single definition.

A

Accounting sync#: A feed that sends card transactions into your bookkeeping software so they can be matched to receipts and reconciled. Capital on Tap connects to Sage, Xero, QuickBooks, FreeAgent and more; its feed syncs every 12 hours. How the card feed works.
Annual fee#: A yearly charge for holding the card, separate from interest. Capital on Tap's standard card has a £0 annual fee; its Pro tier costs £299 a year. Cards with no annual fee.
APR (annual percentage rate)#: The yearly cost of borrowing, including compounding and any compulsory fees, expressed as a percentage. It only costs you anything if you carry a balance past the due date, or take cash. Work out the interest on a balance.
Avios#: The reward currency of British Airways and some other airlines. Capital on Tap converts its points to Avios at 10 points = 8 Avios on the free card, or 10 points = 10 Avios on Pro. Earning Avios on business spend.

B

Bank Rate#: The Bank of England's main interest rate, sometimes called base rate. Many variable card rates track it; Capital on Tap's rate is your fixed business rate plus the Bank of England Bank Rate. How the variable rate tracks Bank Rate.
Bill Pay#: Capital on Tap's service for paying an invoice by bank transfer from your credit line. The free card offers a 2% fee, earning 1% back in points (net 1%), or a 1% fee with no points (net 1%), and the transfers carry no chargeback rights. Capital on Tap Bill Pay explained.
Billing period#: The stretch of days, usually about a month, whose transactions appear on one statement. Where a purchase falls in the period decides how long it sits interest-free before the due date. How statements and due dates work.
Business credit score#: A rating of a company's creditworthiness from agencies such as Experian, Equifax, Creditsafe and Dun & Bradstreet, built from filings, payment history and court records. It is separate from the directors' personal credit files, though lenders often check both. How to build a business credit score.

C

Card network#: The payment scheme a card runs on, such as Visa, Mastercard or American Express. It sets acceptance, the exchange rate on foreign spend and the chargeback rules; Capital on Tap cards run on Visa.
Cash withdrawal (cash advance)#: Taking cash from an ATM, or drawing credit down to a bank account, on a credit card. It usually has no interest-free period: on Capital on Tap there is interest on cash withdrawals from the day you take them, and no points on cash withdrawals or fees. The cash-withdrawal trap.
Cashback#: A reward paid as a percentage of eligible card spend. Capital on Tap pays 1% cashback, as points (1 point = 1p (1,000 points = £10)). Cashback calculator.
CCJ (County Court Judgment)#: A court order to repay a debt, recorded on the credit file of the person or company it is against. Capital on Tap requires no unsatisfied CCJs in the last 12 months. Capital on Tap eligibility.
Charge card#: A card whose balance must be paid in full every month, with no option to carry it and pay interest. American Express Business Gold and Platinum are charge cards. Credit card vs charge card.
Chargeback#: A dispute process run under the card network's rules, through which your card issuer can reverse a card payment for goods or services that were not provided or not as described. It is a scheme rule, not a legal right, and it does not cover bank transfers. Section 75 on business credit cards.
Contactless limit#: The most you can pay in a single tap without entering a PIN. Capital on Tap sets a £100 contactless limit.
Credit limit#: The maximum the issuer lets you owe at once. Capital on Tap advertises limits up to £250,000, but each limit is set individually and new accounts often start much lower. How Capital on Tap credit limits work.
Credit utilisation#: The share of your available credit you are using at a point in time. Lenders and credit agencies read consistently high utilisation as a sign of strain, so clearing the balance often helps. Utilisation and limits.

D

DCC (dynamic currency conversion)#: An offer at a foreign till, ATM or checkout to charge you in pounds instead of the local currency. The merchant's provider sets the rate, which is usually worse than the card network's, so choose the local currency. The DCC trap.
Director's loan account#: The record of money moving between a director and their company outside salary, dividends and expenses. Company costs paid on a personal card, or personal costs paid on a company card, flow through it, and an overdrawn account not repaid within nine months of the year end triggers a section 455 tax charge. The director's loan trap.
Due date#: The date by which a statement must be paid. Pay the full statement balance by then and most cards charge no interest on those purchases. The one rule: pay in full by the due date.

E

E-money#: Electronic money held with an authorised e-money institution rather than deposited in a bank. On Capital on Tap, Preloading uses Modulr, an FCA-authorised e-money institution. What the FCA permissions cover.
Employee card#: An additional card on the company's account for a member of staff, usually with its own spending limit. Capital on Tap offers unlimited free employee cards with limits per billing period or per transaction. Employee cards and spend controls.

F

FCA (Financial Conduct Authority)#: The UK regulator for financial services firms. Lending to limited companies is generally not regulated consumer credit, so the protections that apply to a personal card do not all carry over to a business one. Capital on Tap's regulation.
FX fee (non-sterling transaction fee)#: A percentage the issuer adds to payments made in a foreign currency, on top of the network's exchange rate. Many UK business cards charge close to 3%; Capital on Tap charges a 0% non-sterling transaction fee. FX fee calculator.

H

Hard search#: A full credit check that leaves a visible footprint on a credit file, which other lenders can see. Several in a short period can count against you. Director conduct and personal files.

I

Interest-free period#: The time between a purchase and the statement due date during which no interest is charged, provided the statement is paid in full. Capital on Tap charges no interest on purchases if you pay the statement balance in full by the due date. How to avoid card interest.

L

Limited company#: A business registered at Companies House that is a separate legal person from its owners. Capital on Tap is for Ltd, LLP or PLC companies and is not available to sole traders. Business credit cards for limited companies.

M

MCC (merchant category code)#: A four-digit code the card network assigns to each merchant according to its type of business. Issuers use it to categorise spend, apply category controls and decide which payments earn rewards or count as cash.
Membership Rewards#: American Express's points scheme. On the Business Gold card it earns 1 Membership Rewards point per £1 (2 per £1 with Amex Travel), and points can be transferred to airline and hotel partners. Amex Business Gold review.
Minimum payment#: The least you must pay each month to keep the account in good standing. On Capital on Tap it is the greater of 10% of the balance or £100; anything left over attracts interest. Why the minimum is a trap.

O

Open Banking#: A regulated way to share your bank account data, or make payments from it, with another provider through a secure connection you approve. Capital on Tap uses it for some repayments and to assess limit increases. What affects limit increases.

P

Personal guarantee#: A promise by a director to repay the company's debt personally if the company cannot. Capital on Tap requires one, as do most UK business cards for small companies. What a personal guarantee means.
Preloading#: Topping up a card with your own money so you can spend beyond the credit limit. Capital on Tap describes it this way: "Preloading lets you top up your business credit card with your own money when you need more than your credit limit allows." Capital on Tap Preloading and Smart Repay.
Pro (Capital on Tap Pro)#: Capital on Tap's paid membership at £299 a year, with 1.25% on preloaded spend (and Daily Repay via Smart Repay) and lounge access among its perks. Is Capital on Tap Pro worth it?.

R

Referral code#: A code or link an existing customer shares so a new customer can apply. Capital on Tap's programme pays 7,500 points to both the referrer and the new customer after the new customer's first transaction. How the referral code works.
Repayment option#: The amount your monthly Direct Debit collects. Capital on Tap offers minimum, fixed amount or full balance; only the full-balance option avoids interest without any action each month. Choose the full-balance option.
Representative APR#: An APR a lender advertises as the rate it expects most successful applicants to be offered; your own rate can be higher or lower. Capital on Tap does not publish a representative APR on its website; it advertises rates as low as 13.86% APR (variable). Capital on Tap interest and APR.
Reward points#: Points earned on card spend that can be redeemed for cash, travel or other rewards. Capital on Tap earns 1 point per £1, and points expire after 24 months with no earning or redeeming. Capital on Tap rewards explained.

S

Section 75#: The part of the Consumer Credit Act 1974 that makes a card issuer jointly liable with the seller for faulty or undelivered purchases within set price limits, on regulated credit agreements. Capital on Tap's FAQ says: "No, Section 75 of the Consumer Credit Act 1974 does not apply to Capital on Tap business credit cards, as they are not regulated under this act." Section 75 on business credit cards.
Smart Repay#: Capital on Tap's automatic repayment feature, which can collect by Direct Debit or Open Banking as often as daily. In its words: "When you enroll in Smart Repay, our system automatically determines the most efficient payment method for your business." Smart Repay explained.
Soft search#: A credit check that other lenders cannot see and that does not affect your credit score. Capital on Tap runs a soft search on your personal credit file when you apply. What the application checks.
Sole trader#: Someone running an unincorporated business in their own name, with no separate legal entity. Capital on Tap is not available to sole traders, but some other cards are. Cards for sole traders.
Statement balance (closing balance)#: The total owed at the end of a billing period, shown on the statement. Paying this figure in full by the due date is what keeps purchases interest-free; transactions after the period closes belong to the next statement. How statements work.

V

Variable rate#: An interest rate that can change during the life of the account, often because it tracks Bank Rate. On Capital on Tap the rate only changes at the start of a billing period. How the rate moves.
Virgin Points#: The Virgin Red and Virgin Atlantic reward currency. Capital on Tap converts its points to Virgin Points at 10 points = 8 Virgin Points on the free card, or 10 points = 10 Virgin Points on Pro. Avios, Virgin Points and Radisson Rewards.
Virtual card#: A card number that exists only digitally, for online payments or a phone wallet, usually with its own limit and easy to cancel. Capital on Tap offers instant virtual cards. Virtual cards for subscriptions.

Missing a term? Tell us and we will add it. For the questions people ask most about Capital on Tap itself, see the FAQs.

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