How Business and Personal Credit Cards Are Different

credit cards are different

Small business owners, for better or worse, tend to finance purchases using credit cards. When you were first starting out, you probably charged many business purchases to your personal credit card.

Applying for a business credit card has a lot of advantages, both for your personal credit score and for your business. Still, there are cases in which charging business purchases to a consumer card actually benefits your company.

Let’s take a look at how credit cards are different, examine different credit card aspects and determine whether business or consumer cards are superior. In the end, it’s not an either/or choice but one that depends upon your strategy.

Credit Limits

Winner: Business credit cards

Starter consumer credit cards usually begin with $500 credit limits. If you build a good credit history and provide proof of amazing income, your credit limits can soar up to as much as $35,000. Small-business cards start with higher limits — usually between $1,000 and $5,000 — and can increase to as much as $100,000 if you build a solid business credit history.


Winner: Tie

Both consumer cards and business credit cards provide cash back rewards as well as points for airline travel, dining and lodging. The Capital One Spark line of business credit cards, for example, offers either cash back or travel rewards. With a Spark Cash Card, you get unlimited two percent cash back plus a one-time bonus of up to $500.

Spark Miles Cards offer unlimited double miles on airline travel and up to 50,000 bonus miles. Whichever card you use, pick the rewards program that will help you shave the most off your business expenses.


Winner: Consumer credit cards

Consumer credit cards get all the protections offered by the Credit Card Act of 2009. You get a 21-day grace period, 45 days advance notice of rate changes, and no rate hikes unless your minimum payment is 60 days overdue.

Although a few business credit card issuers, like Bank of America, extend Credit Card Act protections to their business cards, most banks do not. For this reason, many small business owners charge large purchases to a consumer card and smaller incidentals to their business cards. In a worst case scenario, if your business had to miss a credit card payment, you wouldn’t experience an immediate interest rate hike with a consumer card.

Credit Reporting

Winner: Business credit cards

When you initially apply for a business credit card, the issuer will pull your credit report and check your FICO score. After you receive your card and start making purchases, however, your business credit card activity won’t affect your personal credit report. The advantage is that carrying a large balance on a business card won’t hurt your personal credit score. The downside is that good business credit won’t help your credit score recover if you have lackluster personal credit.

One thing you might not know about business credit cards is that they can be used for personal purchases. If your personal cards are maxed out or if you have a compelling reason not to use them, you can charge personal items to your business cards. Just remember that compulsively raiding your business credit card for personal purchases could have serious long-term consequences for your company. Charging personal expenses to a business card should be a strategic decision that won’t bring harm to your family or employees.

Although business credit card activity isn’t reported to the three consumer credit bureaus unless you can’t pay, a business credit card doesn’t shield you in case of default. If your company goes belly-up and you can’t pay off your business card, creditors will come after your personal assets.

Expense Control

Winner: Business credit cards

Businesses with great credit ratings can opt for charge cards rather than credit cards with limits. With a charge card, you can spend as much as you need to spend, provided that you pay your balance in full at the end of the month. Also, as a value-added service, many business credit card providers send quarterly expense reports to your company. These reports help you see what you’re charging to your card, how much you’re spending, and whether you need to reallocate your budget.

Credit Card Photo via Shutterstock

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Archived Contributor This article was originally written by a past contributor whose file has been archived and is no longer active.

2 Reactions
  1. This is a really good summary. I always have just been putting business purchases on the business card and personal expenses on the personal card to that at tax time is was easier.

  2. Love the clear format. I wish I didn’t need credit cards, but alas they’re a necessary evil.