Canstar releases business credit card and deposits ratings

Each year CANSTAR researches both the deposit and credit card products available for New Zealand businesses and rates those products from one to five stars in accordance with the value that the product represents for business owners. The good news is that on both the debt and savings front, there is great value to be found.

"There are almost 460,000 small businesses in New Zealand and the government’s recent Small Business Sector Report found that collectively, they’re doing well," said CANSTAR General Manager - New Zealand, Derek Bonnar. "Cashflow is lifeblood of business though, so being able to access great-value deposit and credit accounts is vital."

Credit cards

When it comes to finances, many small businesses use credit cards to facilitate extra buying power and CANSTAR assess the cards on offer against both a transactor profile (someone who pays the balance in full each month) and a revolver profile (someone who carries a debt). Mr Bonnar warns that, while credit cards can be a fantastic business tool, it’s important to choose a card that suits your spending profile.

"Based on average annual fees and interest rates, our research found that for someone carrying a $5,000 credit card debt, for example, the difference in cost over a 12 month period between a two-star and five-star product was around $250," said Mr Bonnar. "That’s easy money to save, simply by switching your credit card."

Even for credit card users who pay their card in full each month there is money to be made by choosing a great-value product. "Business owners who don’t carry a credit card debt from month to month can afford to look for a good credit card rewards program," said Mr Bonnar. "Someone spending $60,000 through their card each year, as an example, could earn around $500 in cash rewards with a five star-rated product."

When it comes to who offers outstanding value, CANSTAR has awarded five stars to the following credit cards:

Institution - Card - Type of user

BNZ - Business First Visa Lite - Revolver

ANZ - Visa Business Low Rate - Revolver

BNZ - GlobalPlus Business - Transactor

ANZ - Visa Business Cash Back - Transactor

Source: CANSTAR Business Credit Card star ratings

Deposit Accounts

Cashed-up business owners also need somewhere to park their money and CANSTAR has researched and rated 20 business deposit accounts from six providers to determine which products represent outstanding value.

"The most important thing for business owners is to take a step back and assess just what they use their deposit accounts for," said Mr Bonnar. "If it’s a transaction account, then how many transactions do the make each month? Is it mainly online transactions or over-the-counter? Do you still need a cheque facility? Your transaction needs may have changed significantly over the past few years and you might find that you’re paying for features you don’t use or need."

When it comes to transaction accounts, CANSTAR found the average fees being paid are approximately $11.49 per month for low transactors (on average making 20 transactions per month) and $22.59 per month for high transactors (on average making 80 transactions per month).

"It’s also important to assess your options when it comes to saving," said Mr Bonnar. "CANSTAR found the average interest rate paid on an online saver account to be 2.55%, with average fees of $1.65 per month. Obviously though there are better-value options out there.

When it comes to who offers outstanding value, CANSTAR has awarded five stars to the following business deposit accounts:

Institution - Account - Type of user

BNZ - TotalMoney for Business - High Transactor

BNZ - MyMoney for Business - High Transactor

BNZ - MyMoney for Business - Low Transactor

Kiwibank - Business Edge Cheque - LowTransactor

ASB Bank - Business Saver - Online Saver

Heartland Bank - Business Call Account - Online Saver

Source: CANSTAR Business Deposit star ratings

"As a small business owner it’s difficult to find the time to sit down and research your business banking needs and options," said Mr Bonnar. "Our research has identified that there are real savings to be made by doing it though - it’s worth the effort."