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Business vs. Personal Credit Cards: What's the Difference?

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updated: July 3, 2024

The best small-business credit cards work similarly to personal credit cards—both grant you a line of credit you can borrow against. However, business cards are intended to support the purchases and expenses of small businesses, entrepreneurs, and sole proprietorships, whereas personal credit cards are for everyday people and their regular purchases and bills.

There are many differences between the two types of cards, including some that may surprise you. Just keep in mind that if you have your own company or earn money on the side through your own venture, you can carry both kinds of cards.

9 key differences between a business and personal credit card

What are the most important differences between credit cards for consumers and businesses? There are actually quite a few, although not all of them apply with every type of card.

1. Business cards have their own rewards categories

Personal credit cards tend to focus their bonus rewards on categories in which consumers spend a lot, including gas, groceries, dining, and travel. This makes sense when you consider that personal cards are for individuals and families and their regular household expenses.

By contrast, small-business credit cards are geared to business purchases, so they offer rewards in categories in which companies and small-business owners are likely to spend. For example, the popular card_name offers its highest rewards rate in shipping, social media advertising, travel, and internet, cable, and phone services.

2. Business card rewards rates are more lucrative

Business credit cards can also come with higher rewards rates in business-related categories, as well as higher spending caps. The Ink Business Preferred® is a good example again, as it earns 3x points on up to $150,000 spent each year in its bonus rewards categories (then 1x points above $150,000) and 1x points on all other purchases.

The card_name is also a solid example, as users earn 4x points on up to $150,000 in combined spending each year in two business categories in which they spend the most in each billing cycle (and 1x points above $150,000). This card also earns 3x points on airfare booked directly through AmexTravel.com and 1x points on all other eligible purchases.

3. Enhanced welcome offers

Welcome bonuses offered on business credit cards are generally higher than you'll find with comparable personal credit cards. However, minimum spending requirements are also higher.

Two examples: card_name gives business owners the chance to bonus_miles_full And the new card_name offers bonus_miles_full

4. Business credit cards build business credit

While business credit cards typically require a personal guarantee that says the business owner is legally responsible for repayment, these cards don't always report credit balances and payments to the three main personal credit bureaus—Experian, Equifax, and TransUnion. This means you'll need good personal credit to get approved for a business card but using it won't necessarily improve that credit.

Where business credit cards can help you is in building your business credit score, as they typically report to the three main business credit bureaus: Dun & Bradstreet, Equifax Business, and Experian Business.

5. Requirements to apply can vary

Personal and business credit cards each have credit score ratings, including “poor,” “fair,” “good,” and “excellent.” This means you can likely get some type of personal or business credit card regardless of your personal credit history, but you'll have fewer options if your credit falls on the low end of the scale.

That said, the requirements to apply for business credit cards are somewhat more stringent, because you need some type of business or side income to apply. You don't necessarily need an employer identification number (EIN) to get a business credit card; many let you apply with a Social Security number (SSN) instead. You do, however, need some business or side income to report on your application.

6. Business-related benefits

Some business and personal credit cards share similar perks. For example, several travel benefits are pretty standard across the top travel credit cards for individuals and businesses, including airport lounge access, fee credits for Global Entry or TSA PreCheck membership, and free checked bag benefits.

However, many business cards have their own benefits. Between them the card_name and the card_name include the following:

  • Free employee cards.
  • Employee card oversight and spending limits.
  • Integration to bookkeeping software.
  • Quarterly spending reports.
  • Year-end summaries.
  • Ability to assign an account manager.

7. Higher credit limits for business cards

Business credit cards can have higher credit limits than personal cards, especially when businesses can show they have plenty of revenue. There are also more card options for businesses than there are for consumers. Business cards have no preset spending limits, but balances generally have to be paid in full each month. Examples include the card_name and the card_name.

8. Business cards are less likely to have an intro APR

Many personal credit cards come with a 0% introductory annual percentage rate (APR) on purchases, balance transfers, or both. However, there are very few business credit cards that offer intro APRs. Those that do tend to offer them on purchases only (and not balance transfers) for up to a year. Examples include American Express’

Blue Business® Plus and Chase’s Ink Business Unlimited®.

9. Personal cards have more consumer protections

Consumers also enjoy a range of federal protections through the Credit Card Accountability Responsibility and Disclosure (CARD) Act. For example, this law requires credit card companies to wait until an account is at least one year old before raising interest rates. Card issuers must also give at least 45 days notice to cardholders before they raise their rates. There are many other protections built into the CARD Act, but it only applies to personal credit cards.

What do business and personal credit cards have in common?

While business and personal cards have many differences, there are some similarities.

Hard inquiry on your personal credit reports

Both personal and business credit cards require a hard inquiry on your credit reports when you apply. This is how credit card companies assess your creditworthiness and determine whether you're eligible for one of their products.

Personal guarantee

All credit cards require a personal guarantee, meaning you agree to be legally responsible for paying back amounts you borrow. This is just as true for business cards as it is for personal cards. You must pay back money your business borrows, even if the company fails.

Same rewards programs

Many credit card issuers use the same rewards program for their personal and business credit card products. For example, American Express Membership Rewards points, Chase Ultimate Rewards, and Capital One Miles can be acquired with both kinds of cards. This can be a benefit for business owners who want to pool their rewards in one account.

Business purchases on either card

Personal credit cards can be used for business purchases, and people often do so, as there are no laws prohibiting it. In this scenario a business owner might opt to use one personal card for all their spending and then reimburse themselves for business-related purchases.

Unfortunately, using a personal card for business purposes can get confusing if you need to separate different types of spending come tax time. Using a dedicated business credit card will simplify your finances.

Choosing between business and personal credit cards for your small business

If you are unsure which kind of card you want, remember that you can always get both. Otherwise, compare your options based on the following factors:

Credit limits

If you need a high credit limit because your business spends a considerable amount each month, you may want to opt for a business card. You could even apply for one that comes without a preset limit but requires you to pay your balance in full each month.

Category spending

Figure out the categories in which you and your business spend the most and look for cards that will offer the highest possible rewards rate. This could be a business card if the categories are shipping and advertising or a personal card if they are dining and groceries.

0% intro APR periods

If you want a 0% introductory APR on purchases and balance transfers, you should probably choose a personal card. If you don't need to earn rewards, you might get a 0% APR for as long as 21 billing cycles, such as the one offered by U.S. Bank.

Recordkeeping

Business cards offer perks such as bookkeeping software integration, quarterly reports, and year-end spending summaries. It's unlikely you'll find similar benefits with a personal card.

More about business and personal credit cards

What are business credit cards?

Business credit cards are geared to small-business owners, entrepreneurs, freelancers, and individuals who earn money through a side gig of some kind. These cards are offered through major credit card issuers such as American Express, Capital One, and Chase, and they can offer rewards and cardholder perks similar to those of personal credit cards.

Features and benefits

Business credit cards have benefits can include rewards for purchases, expense tracking tools, quarterly reports, and travel benefits.

Application process

Business owners can apply for a card using an EIN or individual tax ID number (ITIN) in many instances. Some business cards allow you to apply as a sole proprietor using an SSN. If you apply online you may find out if you’re approved within a few minutes.

What are personal credit cards?

Personal credit cards are used by consumers.Their features, perks, and rewards vary widely.

Features and benefits

Personal card benefits can include travel perks, annual travel credits, protections for purchases, extended warranties, travel insurance, and more.

Application process

You apply for a personal credit card by sharing your SSN, household income, employment information, and personal contact details. Again, if you do so online you could be approved in a matter of minutes.

Time Stamp: Personal and business credit cards have different purposes but considerable similarities

Personal and business credit cards have separate purposes but also plenty in common. Both let you make payments more conveniently than by using cash, debit cards, or checks while earning valuable rewards.

That said, you should take the time to compare the best credit cards before choosing a card—be it business, personal, or both— with the rewards, features, and annual fee that suit you.

Frequently asked questions (FAQs)

Are business credit cards only for business owners?

You don't have to own an official business to apply for a business credit card, but you do need to have some sort of income you earn on your own. The fact is that business cards are frequently used by freelancers, workers in the gig economy, and individuals who do some type of work on the side in addition to their regular job.

Is it better to have business credit or personal credit?

Personal credit is more useful in everyday life. For example, you'll likely need good personal credit when applying for a mortgage, renting an apartment, or buying a car. Business credit is also important, but it mostly dictates the terms and availability of credit you can access for business purposes.

Do banks check personal credit for business credit cards?

Credit card issuers do a hard pull on your personal credit report when you apply for a business credit card. These cards also require a personal guarantee, which means you are legally required to pay back funds borrowed, even if the business fails.

Does maxing out a business credit card hurt your credit?

Maxing out a business credit card can impact your business credit score but not your personal one. This is because most business credit cards report to the business credit bureaus instead of the consumer credit bureaus.

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