How Do Business Credit Cards Differ From Personal Credit Cards

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How Do Business Credit Cards Differ From Personal Credit Cards

31
Mar,2020

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This article is contributed by Sam Billo and he is a credit card expert at Help Me Build Credit.

Credit Reporting 

The number one difference between a business card and a personal credit card is credit reporting. Your personal credit will always be checked, even when getting approved for a business credit card.

However, the difference lies at the end of each month when the credit card is reported to the credit bureaus. Business cards won’t be reported to the credit bureaus at all, only personal cards will give over your account history and balances to the bureaus.

A disclaimer on that though, two major credit card issuers will indeed report both business and personal cards to the personal credit bureaus, Capital One and Discover.

A high balance on your business card will not in turn affect your score, so keep calm. However, don’t over do it since a late payment on your business card will get reported, even on your personal report, by your credit card issuer.

Building Credit

Keep what we learned about credit reporting in mind, in order to have your personal credit history looking good, you ought to have some personal credit cards open. 

Higher Credit Limits

Businesses are most likely to get approved for higher credit limits on a card since an ordinary guy will spend considerably less on his personal card than an established business would.

Benefits and Rewards

Credit cards come with benefits and reward packages suited for the use of the card. A business card will be offered that a business can benefit from. Take the Amex Platinum Business card as an example where you will earn a $200 statement credit at Dell computers, and the Chase Ink Business Cash where you will earn 5% cashback at office supplies stores.

The above cards would work great for those with small businesses. 

Less Legal Protection 

In signing the Card Act in 2009, Congress set out to protect consumer credit cards. A higher level of legal protection in matters of interest rate hikes, penalty APR guidelines, over-limit fees, and more; was to be provided for the consumer credit cards. 

Double Bonuses

Cards offer welcome bonuses. If you own a personal card, you can get the business version of that same card and still be eligible for the welcome bonus offered by the credit card issuer.

As an example, if you are to apply for the Delta Gold Business Card after already having the  Delta Gold Card, you will still be entitled to the welcome bonus offered by Delta on their cards. 

Take note that even if you never created a separate business tax ID, you can still apply for a business credit card. Check out this post for a step by step guide on how to go about filling out the application.

 

 

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