Focus on: Barclaycard offers 3% cashback for small businesses

Cashback deals on financial products are in vogue following the huge promotional push behind the Santander 123 current account earlier this year.


Now Barclaycard has launched a cashback business credit card designed to provide the self-employed and those with small businesses with similar rewards to the ones available to personal account and credit cardholders. Here, we scrutinise the small print to see whether the card could work for you.

What’s the deal?

The Barclaycard Cashback Business credit card offers a range of cashback offers according to what you put on the plastic. For example, you can get 3% cashback on office supplies and stationery, legal and accounting services, and computer equipment and support.

There is 1% cashback on fuel at petrol stations, which will be enthusiastically welcomed by businesses struggling under the burden of rocketing petrol and diesel costs. Cardholders get 0.5% cashback on any other spend put through the company plastic.

Additionally, there is 0% interest on purchases for the first three months after the account is opened.

Further benefits include purchase cardholder misuse protection for employers providing cards to members of staff, travel accident insurance and up to 55% off AA usual membership rates. The representative APR is 24.9% with a purchase rate of 19.9% per annum (variable) once the 0% introductory rate period is up.

The APR figure is that much higher because it includes the £32 annual fee that comes with the card.

The deal is available to businesses with a turnover of up to £5m per annum.

Any catches?

There’s a £400 maximum limit on the amount of cashback you can get, regardless of how much you put on the card. And if you earn less than £10 cashback in any year it will not be credited to your account – and neither will it be carried forward to the following year.

The £400 limit also applies per account, not per card, so there is no additional advantage for having cards for co-workers.

What’s more, the cashback is only paid once a year at the anniversary of the account opening, so you could wait a long time to see your money.

As is the case with most business credit cards, there is a hefty upfront annual fee – £32 in this case. So you’d have to put a lot of money through your card just to get back your outlay.

The juiciest cashback, 3%, is available on legal and accounting services, but many businesses will be used to paying for these by cheque or bank transfer. And some legal and accounting firms may not be geared up to accepting payment by credit card, so this could prove a practical issue in some cases.

It’s also worth noting that you have to shop in certain stores to get the cashback. Outlets where you can earn the 3% cash back include Ryman and WHSmith, but not supermarket outlets such as Tesco, Morrisons and ASDA.

You should also consider the tax implications. Barclaycard states that it is up to the cardholder to tell the tax authorities about any benefits you receive under the cashback scheme. It might be worth mentioning to your accountant that you have this sort of card as you would obviously have to pay any taxes or other charges which accrued as a result of using it.

What's the verdict?

Cashback offers are very seductive. Everyone is watching the pounds and pence these days, and the self-employed and small commercial enterprises are no exception. It is particularly satisfying for businesses to earn money on spending that is unavoidable, such as an accountant’s fees, so the 3% cashback for such outlay will be welcomed.

However, your shopping habits may need to change if you normally pick up your business stationery along with the groceries on your way round a Tesco Express – the card only rewards your trips to Ryman and WHSmith.

The fuel cashback element will no doubt be received warmly in the current climate – 1% may not seem like a huge amount, but it will be welcomed given the simmering rage many people experience whenever they approach the pumps.

The overall annual limit on cashback of £400 might seem modest, but for a self-employed individual or a small business this is a handy sum. However, it’s important to be aware of the small print and the restrictions – as well as the annual £32 fee.

Top tip

It’s always worth shopping around. Among the other cashback business cards on offer is the Capital One Business Credit Card. This offers 5% cashback on everything you buy for the first three months up to a maximum £100 and up to 1.25% unlimited cashback thereafter. There is no annual fee and the purchase interest rate is 16.94% per annum.

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

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