Does your business use a business credit card for business purchases or do you just swipe on your personal credit cards? You may ask, what’s the difference? Here, in this post, we will discuss the key differences between personal and business credit cards.

Credit Reporting 

The first and most important difference is credit reporting. Both personal and business credit cards will check your personal credit before approving you for a credit card. But when it comes to reporting the credit card monthly to the credit bureaus there is a big difference. Only your personal credit cards will report your account history and balances to the credit bureaus; business credit cards will not be reported. (Capital One and Discover are the only two major credit card issuers which report even their business credit cards to the personal credit bureaus.) 

So if you carry a large balance on a business credit card, you can rest assured that the balance will not affect your credit score. But please note that if you end up being late on the payments then the credit card issuer will report the late payments even on your personal credit report.

Building Credit

As we discussed above, business credit cards usually do not get reported to the personal credit bureaus. Therefore,  business credit cards will not help you build credit. You have to make sure that besides your business credit cards you also have several personal credit cards which will help you establish great personal credit history.

Higher Credit Limits

A business usually spends more money on credit cards than the average personal consumer. Business credit cards were designed to work for business; therefore, a business credit card will a lot of times get approved for a higher credit limit than a personal credit card. 

Benefits And Rewards

A business credit card will usually come with a benefit and rewards package which is more cut out for a business’ needs. For example, the Amex Platinum Business card will earn a $200 statement credit at Dell computers, and the Chase Ink Business Cash earns 5% cashback at office supplies stores. These are all benefits that were designed to work better for a small business owner.

Less Legal Protection 

The Card Act Signed by congress in 2009 only protects consumer credit cards. This gives consumer credit cards better legal protection in regards to interest rate hikes, penalty APR guidelines, over the limit fees and more.

Double Bonuses

Business credit cards are usually considered a different product in regards to welcome bonuses. Even if you already earned a welcome bonus on a personal version,  you can still receive the welcome bonus again on the business version of the card. For example, if you received a welcome bonus on the Delta Gold Card you can still receive a new Welcome Bonus on the Delta Gold Business Card.

Business Credit Reporting

Business credit cards sometimes report the account history to the business credit bureaus. This will help you build business credit. Here is a list of which credit card issuers report on-time payments to one or more of the business credit bureaus:

  • Amex – Conflicting data points if it reports to
  • Chase
  • Capital One
  • Citi
Dun And BradstreetSmall Business Financial Exchange (SBFE)Experian BusinessEquifax Business
AmexConflicting data pointsyesnono
Bank Of Americanoyesnono
Capital OneyesyesyesConflicting data points
US Bankyesnonoyes
Wells Fargonoyesnono

It’s important to note that you can apply for a business credit card even if you never formed a separate business tax ID for your business. Read in this post a step by step guide on how to fill out the application.