How business credit cards differ from consumer credit cards

Quick insights

• Business credit cards and consumer cards provide access to credit and can have rewards programs.
• Enhanced expense tracking and categorization features are included on some business cards.
• Consumer credit cards can have lower credit limits than business cards.

Credit cards can be a useful tool in managing both your business and personal finances. But there are a few key differences that set business credit cards apart from personal credit cards.

Like personal credit cards, they provide access to credit and may offer rewards programs. But they also tend to offer higher credit limit and expense management tools. Read on to learn about some ways that these types of credit cards differ from one another.

Common features of business credit cards

Business credit card features and benefits can vary by card and credit issuer. However, there are common features of business credit cards that differentiate them from cards designed for consumer use. Some of these features include:

Custom rewards programs

Business credit cards often include rewards programs that are tailored to the spending habits of businesses. These rewards can include cash back or points for purchases in categories like advertising, office supplies and travel.

Understanding and leveraging a card’s rewards can help business owners maximize the benefits of their card. By using business credit card rewards, small business owners also may be able to help offset some operational costs. For instance, business owners may be able to redeem credit card rewards for travel expenses like flights or hotels.

Expense management tools

Many business cards can be integrated with accounting software, which can help streamline expense tracking and financial reporting. This integration not only can help reduce the potential for errors but can save business owners time reconciling expenses.

These tools can also provide a clear picture of spending patterns, which can be useful in budgeting and financial oversight. A business credit card can also help business owners—especially solopreneurs—more clearly separate business and personal expenses.

Enhanced spending controls

Many card issuers allow businesses to establish controls on employee credit cards. This can include setting spending limits or restricting card usage to approved vendors or categories. This can provide businesses with the ability to regulate purchases and help employees more easily adhere to company-wide card policies.

Higher credit limits

Business credit cards are typically designed with the needs of businesses in mind, which means they can have higher credit limits than consumer cards. Increased credit limits can be helpful for small business owners. They may serve as a tool to help manage cash flow and handle unexpected business expenses.

However, a higher credit limit is not guaranteed. A card’s limit may be in part influenced by the creditworthiness of the business or its owner.

Builds business credit history

Using a business credit card responsibly can play a pivotal role in building your business's credit history. Just like with personal credit, a strong business credit score can open doors to future financing opportunities and more favorable credit terms. Making timely payments, keeping your credit utilization low and maintaining a long-standing account could potentially improve a business’s credit score.

Similarities of business and personal credit cards

Business and consumer credit cards share some notable similarities:

• Credit reporting: Both types of cards report to credit bureaus. However, while consumer cards report to consumer credit bureaus, business cards may report to both consumer and commercial credit bureaus, depending on the card issuer's policies.
• Interest and fees: Both business and consumer credit cards charge interest on carried balances and may have annual fees or other charges. The exact rates and fees depend on the card issuer and the specific card.
• Fraud protection: Both business and consumer credit cards typically offer fraud protection tools cardmembers can use to help safeguard themselves against unauthorized charges. However, personal credit cards tend to have more consumer protections.

In summary

There are many choices when it comes to business credit card options. Depending on the card issuer and specific card, business credit cards may provide higher credit limits, employee credit cards and rewards programs—but every card is different. Business owners looking to get a new business card may want to consider their business’s size, spending habits and personal financial goals when determining which is the best card for their business.