A business credit card offers a line of credit to finance your business’s purchase transactions while a business debit card is either prefunded directly or linked to a bank account. Both are important tools that provide convenience for business owners when making purchases in-store and online. They may look similar, but they don’t work the same way. Knowing the differences between a business credit card vs debit card can help you decide which is right for your business.
Business Credit Card | Business Debit Card | |
|---|---|---|
Credit Limit | Yes | None; limit is based on account balance |
Personal Credit Check | Mostly yes | No |
Personal Guarantee | Mostly yes | No |
Annual Percentage Rate (APR) | Yes | No |
Rewards | Mostly yes | Yes for some |
Can Build Credit | Yes | No |
Needs Funding Upfront | No—unless it’s a secured credit card (security deposit needed) | Yes |
Online Platform | Yes | Yes |
Fraud Protection | Yes | No |
Robust Controls | Mostly yes | Yes |
What Is a Business Credit Card?
A business credit card is issued by a financial institution, such as a bank, credit union, or credit card company, providing business owners with a line of credit they can use for business purchases and other financial transactions. It offers a solution to business owners needing quick funding for their working capital needs.
How Do Business Credit Cards Work?
A business credit card works like an instant line of credit where you can charge your financial transactions and agree to pay the minimum balance on or before the next due date. Any balance that is unpaid will be carried over to the next billing cycle with interest based on the ongoing APR and terms of the card. However, if you pay your balance in full by its due date, you will not be charged any interest.
Most business credit cards offer rewards, such as cash back, travel miles, and points, that can be redeemed for statement credit, travel, merchandise, gift cards, and more. Using a business credit card for your business can help keep your business and personal finances separate. On top of that, when used responsibly, it can help you build your business credit over time, allowing you to access a wide variety of business financing options later on.
Pros & Cons of Business Credit Cards
| Pros | Cons |
|---|---|
| Provides instant access to business financing | Charges interest rates if you don’t pay your balance in full |
| Can help build business credit when used responsibly | May leave you with a high debt-to-credit ratio since balance can easily add up |
| Lets you earn rewards on your purchases | Sometimes has high fees |
| Comes with perks like $0 annual fees, $0 foreign transaction fees, welcome offers, and a 0% APR period | Typically requires a credit check to qualify |
| Can be used as short-term interest-free financing if you pay your balance in full each billing cycle | Can harm your credit if not used responsibly |
| Can leave you with accumulated debt when only the minimum amount due is paid | |
When To Choose a Business Credit Card
Choose a business credit card if you:
- Need a line of credit or short-term financing
- Want to build a business credit score
- Want to take advantage of perks like 0% APR periods, introductory and ongoing rewards, and other benefits
- Have a credit score that can qualify for a business credit card
- Are willing to provide a personal guarantee
- Need to carry a balance from time to time
What Is a Business Debit Card?
A business debit card can be used for business purchases by directly deducting funds from either a business checking account that is linked to your debit card or your debit account balance. To use a business debit card, you need to have sufficient cash on hand to use as working capital.
Business debit cards provide the convenience of paying for your financial transactions without incurring debts. For this reason, using a business debit card won’t affect your credit score. However, it also won’t help you build business credit.
How Do Business Debit Cards Work?
A business debit card works like a payment card where you first link your business checking account to your card or load funds to your debit account balance. Then, purchases made by you or your employees are directly deducted from your account balance. You can set spending controls for your employees to prevent overspending and any unauthorized transactions.
Transactions made on a business debit card are not considered debt as you directly pay for purchases from your account balance. Because of this, your transactions are not reported to credit bureaus, so using a business debit card will not help build or improve your credit score.
Also, because transactions are not debts, business debit cards don’t have APRs. Similar to business credit cards, some business debit cards offer rewards on your purchases in the form of points or cash back.
Pros & Cons of Business Debit Cards
| Pros | Cons |
|---|---|
| Does not report your transaction to credit bureaus so they can’t harm your credit | Cannot help build business credit |
| Won’t let you incur debt, so no need to worry about due dates | Requires working cash—you need to fund your account first to use the card for your transactions |
| Offers robust controls | Doesn’t always offer as lucrative rewards as business credit cards |
| Lets you earn rewards (for some cards) | |
| Doesn’t require a personal guarantee | |
When To Choose a Business Debit Card
Business debit cards are a good fit if you:
- Have sufficient cash on hand to use as working capital
- Don’t want to incur debt
- Want to control your budget
- Don’t need to build business credit
- Have a credit score that won’t qualify for a business credit card
- Don’t want to provide a personal guarantee
- Don’t want to keep track of balance due and due dates
Factors To Consider When Choosing Between a Business Credit Card vs Debit Card
Before choosing between a business debit card vs credit card, consider the following factors:
- Cash on hand: If your company has enough working capital to use for your day-to-day financial needs, a debit card may be a good fit as it can help you stay within budget. However, if working cash is not immediately available, a business credit card can provide quick access to financing, allowing you to pay for your everyday expenses, make large purchases, or use for financial emergencies.
- Credit score: If your business credit score can qualify for a business credit card, or if you want to build or fix your business credit, then a business credit card is an ideal option. However, if your credit score cannot qualify you for a business credit card, or if you don’t need to use the card for building credit, then a business debit card may be suitable.
- Features: While both business credit and debit cards offer almost similar features—including the ability to add employee cards, set spending controls, and monitor expenses—there are some features with one card type that may not be available with the other. For instance, if you need purchase protection or protection against fraud, a business credit card is the better option.
Top Recommendations for Business Credit Cards
U.S. Bank Business Triple Cash Rewards World Elite Mastercard®
U.S. Bank Business Triple Cash Rewards World Elite Mastercard®
BEST FOR:
Those wanting to earn up to 5% cash back with long 0% APR period
Intro APR
0% intro on purchases for 12 billing cycles
Regular APR
18.99% - 27.99% Variable
Annual Fee
$0
Credit Needed
Excellent, Good
- Introducing the U.S. Bank Business Triple Cash Rewards World Elite Mastercard® the card that gives back on all your eligible business needs.
- Earn $750 in cash back. Just spend $6000 on the Account Owner's card in the first 180 days of opening your account.
- Earn 3% cash back on eligible purchases at gas stations and EV charging stations, office supply stores, cell phone service providers and restaurants.
- 1% cash back on all other eligible net purchases.
- Earn 5% cash back on prepaid hotels and car rentals booked directly in the Rewards Center.
- No limit on total cash back earned.
- Rewards never expire.
- Earn an annual $100 statement credit for recurring software subscription expenses such as FreshBooks or quickbooks.
- Great Offer from U.S. Bank, a 2022 World's Most Ethical Company® - Ethisphere Institute, February 2022.
- Terms and conditions apply.
Pros
- 0% purchase APR for 12 months
- $0 annual fee
- U.S. Bank ExtendPay® Plan feature
Cons
- No 0% APR on balance transfers
- Charges balance transfer and foreign transaction fees
- MasterRental car rental collision damage waiver: When you rent a car using your U.S. Bank credit card, you’re covered in case of accident or theft on all rentals made worldwide. Coverage is primary, which means you won’t need to use your personal auto insurance or accept the insurance offered by the rental agency. Coverage is capped at $50,000.
- Purchase assurance: U.S. Bank may repair or reimburse for items purchased with your U.S. Bank business credit card that are damaged or stolen within 90 days of purchase. Coverage is limited to $1,000 per loss, up to $25,000 per year, per account. Lost items and items left out of reach that others can see are not covered.
- Extended warranty protection: U.S. Bank will double the manufacturer’s warranty up to an additional one year from the expiration of warranties of five years or less. An item with a six-month warranty would be backed for an additional six months, for example. The issuer will replace the item or reimburse you up to the amount charged on your U.S. Bank card up to $10,000.
- U.S. Bank ExtendPay® Plan: Pay off your eligible balance over time with this feature without interest—just pay a small monthly fee
Intro APR
0% intro on purchases for 12 billing cycles
Regular APR
18.99% - 27.99% Variable
Annual Fee
$0
Credit Needed
Excellent, Good
- Introducing the U.S. Bank Business Triple Cash Rewards World Elite Mastercard® the card that gives back on all your eligible business needs.
- Earn $750 in cash back. Just spend $6000 on the Account Owner's card in the first 180 days of opening your account.
- Earn 3% cash back on eligible purchases at gas stations and EV charging stations, office supply stores, cell phone service providers and restaurants.
- 1% cash back on all other eligible net purchases.
- Earn 5% cash back on prepaid hotels and car rentals booked directly in the Rewards Center.
- No limit on total cash back earned.
- Rewards never expire.
- Earn an annual $100 statement credit for recurring software subscription expenses such as FreshBooks or quickbooks.
- Great Offer from U.S. Bank, a 2022 World's Most Ethical Company® - Ethisphere Institute, February 2022.
- Terms and conditions apply.
Pros
- 0% purchase APR for 12 months
- $0 annual fee
- U.S. Bank ExtendPay® Plan feature
Cons
- No 0% APR on balance transfers
- Charges balance transfer and foreign transaction fees
- MasterRental car rental collision damage waiver: When you rent a car using your U.S. Bank credit card, you’re covered in case of accident or theft on all rentals made worldwide. Coverage is primary, which means you won’t need to use your personal auto insurance or accept the insurance offered by the rental agency. Coverage is capped at $50,000.
- Purchase assurance: U.S. Bank may repair or reimburse for items purchased with your U.S. Bank business credit card that are damaged or stolen within 90 days of purchase. Coverage is limited to $1,000 per loss, up to $25,000 per year, per account. Lost items and items left out of reach that others can see are not covered.
- Extended warranty protection: U.S. Bank will double the manufacturer’s warranty up to an additional one year from the expiration of warranties of five years or less. An item with a six-month warranty would be backed for an additional six months, for example. The issuer will replace the item or reimburse you up to the amount charged on your U.S. Bank card up to $10,000.
- U.S. Bank ExtendPay® Plan: Pay off your eligible balance over time with this feature without interest—just pay a small monthly fee
Card highlights:
- Has $0 annual fee and 0% APR on purchases for the first 12 billing cycles
- Offers up to 5% cash back, depending on expense categories
- Lets you earn a $750 cash bonus when you spend $6,000 in the first 180 days after opening an account
- Offers a $100 annual statement credit for recurring software purchases
- Features the ExtendPay Plan, letting you pay your eligible balance over time without interest, only a small monthly fee
- Tops our list of the leading business cards with no annual fee because of its perks and generous rewards.
American Express Blue Business CashTM
The American Express Blue Business Cash™ Card
BEST FOR:
Those who want better cash back rewards
Intro APR
0% on purchases
Regular APR
18.49% - 26.49% Variable
Annual Fee
No annual fee
Credit Needed
Excellent, Good
- Earn a $250 statement credit after you make $3,000 in purchases on your Card in your first 3 months.
- 0.0% intro APR on purchases for 12 months from the date of account opening, then a variable rate, 18.49% - 26.49%, based on your creditworthiness and other factors as determined at the time of account opening. APRs will not exceed 29.99%
- Earn 2% cash back on all eligible purchases on up to $50,000 per calendar year, then 1%. Cash back earned is automatically credited to your statement.
- From workflow to inventory to floor plans, your business is constantly changing. That’s why you’ve got the power to spend beyond your credit limit with Expanded Buying Power.
- Just remember, the amount you can spend above your credit limit is not unlimited. It adjusts with your use of the Card, your payment history, credit record, financial resources known to us and other factors.
- No Annual Fee
- Terms Apply.
Pros
- 0% introductory annual percentage rate (APR)
- Welcome offer
- Fixed rate rewards
- $0 annual fee
Cons
- Cash advance isn’t allowed
- Charges foreign transaction fees
- 2% cash back is capped at $50,000 in annual spending
- Expanded buying power: Enjoy flexible buying power when your business needs it. Expanded buying power gives you the freedom to spend beyond your credit limit and help get business done. While the amount you can spend above your credit limit isn't unlimited, it adjusts with your use of the card, your payment history, credit record, financial resources known to us, and other factors.
- Car rental loss and damage insurance: As a Card Member, You can be covered for damage to or theft of a rental vehicle in a covered territory when you use your eligible card to reserve and pay for the entire rental and decline the collision damage waiver at the rental company counter. (Car Rental Loss and Damage Insurance can provide coverage up to $50,000 for theft of or damage to most rental vehicles when you use your eligible Card to reserve and pay for the entire eligible vehicle rental and decline the collision damage waiver or similar option offered by the Commercial Car Rental Company. This product provides secondary coverage and does not include liability coverage. Not all vehicle types or rentals are covered. Geographic restrictions apply. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company. Car Rental Loss or Damage Coverage is offered through American Express Travel Related Services Company, Inc.)
Intro APR
0% on purchases
Regular APR
18.49% - 26.49% Variable
Annual Fee
No annual fee
Credit Needed
Excellent, Good
- Earn a $250 statement credit after you make $3,000 in purchases on your Card in your first 3 months.
- 0.0% intro APR on purchases for 12 months from the date of account opening, then a variable rate, 18.49% - 26.49%, based on your creditworthiness and other factors as determined at the time of account opening. APRs will not exceed 29.99%
- Earn 2% cash back on all eligible purchases on up to $50,000 per calendar year, then 1%. Cash back earned is automatically credited to your statement.
- From workflow to inventory to floor plans, your business is constantly changing. That’s why you’ve got the power to spend beyond your credit limit with Expanded Buying Power.
- Just remember, the amount you can spend above your credit limit is not unlimited. It adjusts with your use of the Card, your payment history, credit record, financial resources known to us and other factors.
- No Annual Fee
- Terms Apply.
Pros
- 0% introductory annual percentage rate (APR)
- Welcome offer
- Fixed rate rewards
- $0 annual fee
Cons
- Cash advance isn’t allowed
- Charges foreign transaction fees
- 2% cash back is capped at $50,000 in annual spending
- Expanded buying power: Enjoy flexible buying power when your business needs it. Expanded buying power gives you the freedom to spend beyond your credit limit and help get business done. While the amount you can spend above your credit limit isn't unlimited, it adjusts with your use of the card, your payment history, credit record, financial resources known to us, and other factors.
- Car rental loss and damage insurance: As a Card Member, You can be covered for damage to or theft of a rental vehicle in a covered territory when you use your eligible card to reserve and pay for the entire rental and decline the collision damage waiver at the rental company counter. (Car Rental Loss and Damage Insurance can provide coverage up to $50,000 for theft of or damage to most rental vehicles when you use your eligible Card to reserve and pay for the entire eligible vehicle rental and decline the collision damage waiver or similar option offered by the Commercial Car Rental Company. This product provides secondary coverage and does not include liability coverage. Not all vehicle types or rentals are covered. Geographic restrictions apply. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company. Car Rental Loss or Damage Coverage is offered through American Express Travel Related Services Company, Inc.)
Card highlights:
- Offers up to 2% cash back, which is automatically credited to your statement balance
- Charges $0 annual fee
- Comes with 0% APR on purchases for the first 12 billing cycles
- Lets you earn a $250 statement credit after spending at least $3,000 within three months of opening an account
- Features Expanded Buying Power, allowing you to spend over your credit limit when needed
- Leads our roundup of the best cash back business cards because of its simplicity and flexible credit limit
Bank of America Business Advantage Travel Rewards World Mastercard®
Amazon Business American Express Card
BEST FOR:
3% back or 60-day repayment terms
Intro APR
N/A
Regular APR
19.49% - 27.49% Variable
Annual Fee
No annual fee
Credit Needed
Excellent, Good
- Get a $100 Amazon Gift Card upon approval for the Amazon Business American Express Card.
- Take advantage of 3% Back and benefit your bottom line or 60 day no-interest terms to free up your cash flow on U.S. purchases at Amazon Business, AWS, Amazon.com and Whole Foods Market. Earn 3% Back on the first $120,000 in purchases each calendar year, 1% Back thereafter
- 2% Back at U.S. restaurants, U.S. gas stations, and on wireless telephone services purchased directly from U.S. service providers
- 1% Back on other purchases
- No Annual Fee¤
- Back your business with the broad selection of Amazon and the service of American Express. Stay focused on your top business priorities, knowing we’re behind you.
- You choose when to redeem. Redeem rewards on millions of items during checkout at Amazon.com and Amazon Business (U.S.) or apply towards a purchase on your statement.
- Terms apply.
Pros
- $100 Amazon gift card upon approval: You get a $100 Amazon gift card as a reward upon approval, without the need to meet any spending requirement.
- $0 annual fee: You can enjoy earning rewards or 60-day interest-free terms on your purchases at US Amazon-owned companies without having to pay annual fees.
- No need for Amazon Prime membership: Anyone who shops frequently at Amazon can apply for an Amazon Business American Express Card, including those who aren’t Amazon Prime members.
Cons
- Short 0% APR period: You can only enjoy interest-free financing on Amazon purchases for a 60-day term, which is shorter compared to most business credit cards’ introductory rates.
- 3% back only applies on the first $120,000: You can earn 3% back only on the first $120,000 in purchases each calendar year—after that, you will earn 1% back, which is meager compared to other points-based rewards business credit cards.
- Balance transfers aren’t allowed: This card doesn’t allow balance transfers, which is a disadvantage if you need to transfer a balance from another card.
- Return protection: If a merchant doesn’t accept a return of an item in original purchase condition within 90 days of purchase, American Express will refund cardholders up to $300 per item and up to a maximum of $1,000 per cardmember, per calendar year
- Baggage insurance: If your luggage is damaged, lost, or stolen when you pay for your trip with your card, American Express will pay up to $1,250 per covered person for carry-on baggage and up to $500 for checked baggage
- Extended warranty: Get an additional one-year warranty and receive coverage of up to $10,000 per purchase, with a maximum limit of $50,000 per calendar year, for purchases with a manufacturer’s warranty of five years or less.
- Purchase protection: The issuer will repair, replace, or reimburse you for an item purchased with the card that was damaged or stolen within 120 days of purchase; coverage is limited to $1,000 per occurrence and $50,000 per account each year
Intro APR
N/A
Regular APR
19.49% - 27.49% Variable
Annual Fee
No annual fee
Credit Needed
Excellent, Good
- Get a $100 Amazon Gift Card upon approval for the Amazon Business American Express Card.
- Take advantage of 3% Back and benefit your bottom line or 60 day no-interest terms to free up your cash flow on U.S. purchases at Amazon Business, AWS, Amazon.com and Whole Foods Market. Earn 3% Back on the first $120,000 in purchases each calendar year, 1% Back thereafter
- 2% Back at U.S. restaurants, U.S. gas stations, and on wireless telephone services purchased directly from U.S. service providers
- 1% Back on other purchases
- No Annual Fee¤
- Back your business with the broad selection of Amazon and the service of American Express. Stay focused on your top business priorities, knowing we’re behind you.
- You choose when to redeem. Redeem rewards on millions of items during checkout at Amazon.com and Amazon Business (U.S.) or apply towards a purchase on your statement.
- Terms apply.
Pros
- $100 Amazon gift card upon approval: You get a $100 Amazon gift card as a reward upon approval, without the need to meet any spending requirement.
- $0 annual fee: You can enjoy earning rewards or 60-day interest-free terms on your purchases at US Amazon-owned companies without having to pay annual fees.
- No need for Amazon Prime membership: Anyone who shops frequently at Amazon can apply for an Amazon Business American Express Card, including those who aren’t Amazon Prime members.
Cons
- Short 0% APR period: You can only enjoy interest-free financing on Amazon purchases for a 60-day term, which is shorter compared to most business credit cards’ introductory rates.
- 3% back only applies on the first $120,000: You can earn 3% back only on the first $120,000 in purchases each calendar year—after that, you will earn 1% back, which is meager compared to other points-based rewards business credit cards.
- Balance transfers aren’t allowed: This card doesn’t allow balance transfers, which is a disadvantage if you need to transfer a balance from another card.
- Return protection: If a merchant doesn’t accept a return of an item in original purchase condition within 90 days of purchase, American Express will refund cardholders up to $300 per item and up to a maximum of $1,000 per cardmember, per calendar year
- Baggage insurance: If your luggage is damaged, lost, or stolen when you pay for your trip with your card, American Express will pay up to $1,250 per covered person for carry-on baggage and up to $500 for checked baggage
- Extended warranty: Get an additional one-year warranty and receive coverage of up to $10,000 per purchase, with a maximum limit of $50,000 per calendar year, for purchases with a manufacturer’s warranty of five years or less.
- Purchase protection: The issuer will repair, replace, or reimburse you for an item purchased with the card that was damaged or stolen within 120 days of purchase; coverage is limited to $1,000 per occurrence and $50,000 per account each year
Card highlights
- Offers up to 3x points on purchases, depending on spending categories
- Lets you earn 30,000 points when you spend $3,000 within 90 days of card ownership
- Comes with $0 annual fee and $0 foreign transaction fee
- Lets you enjoy 0% APR on purchases for the first nine billing cycles
- Lets you earn up to 75% more rewards when you have a Bank of America business checking account and qualify for the Preferred Rewards for Business program
- Is our top business credit card with no foreign transaction fee because of its lucrative travel rewards and perks
Top Recommendations for Business Debit Cards
Brex Card
 Brex CardBEST FOR: Those who want daily or monthly payments | |
|---|---|
Spending Limit | Load Limit |
|
|
Costs | |
| |
Card highlights:
- Can be used as a charge card (paid monthly) or debit card (paid daily)
- Offers up to 8x points (depending on expense categories) for accounts that are paid daily
- Comes with exclusive discounts from partners
- Features a seamless platform
- Is one of our top-recommended corporate cards due to its two available payment options (monthly or daily)
Emburse Spend Card
 Emburse Spend CardBEST FOR: Earning unlimited cash back rewards | |
|---|---|
Spending Limit | Load Limit |
|
|
Costs | |
| |
Card highlights:
- Offers 1% cash back on all purchases
- Lets you load your card for a maximum of $100,000 (you can increase this limit when needed, subject to approval)
- Has a robust expense management system
- Charges $0 annual fee
- Leads our list of the best business prepaid cards because of its unlimited rewards and streamlined platform
PEX Visa Business Prepaid Card
 PEX Visa Business Prepaid CardBest for: Those who want a custom payment platform | |
|---|---|
Spending Limit | Load Limit |
|
|
Costs | |
| |
Card highlights:
- Has $0 load, card replacement, and transaction fees
- Offers a 60-day free trial
- Lets you earn 2% back on all qualified purchases
- Is also one of our leading business prepaid cards because of its lucrative rewards
Frequently Asked Questions (FAQs)
With credit cards, cardholders draw from a credit line when they charge their purchases on the card. However, with a debit card, cardholders directly draw from their account balance when they use the card to make purchases. This means that credit card users need to pay their credit card bills when due, while debit card users need to fund their accounts first so that they can use their cards to pay for their transactions.
It depends, as not all credit cards allow cash advances. Note that cash advance transactions typically come with a higher APR compared to the card’s ongoing purchase APR, which is charged right away—regardless of whether or not you pay the cash advance on the next billing cycle. Plus, you will also be charged a cash advance fee.
A regular debit card requires you to link a bank account to the card—this bank account will be used to fund your debit card. On the other hand, a prepaid debit card does not require a linked bank account; however, you need to load the debit card with money so that you can use it for your purchase transactions.
Bottom Line
Both business credit and debit cards can be used to pay for your purchases and other financial transactions. When choosing between a business debit card vs credit card, consider their benefits and drawbacks. Review the qualification requirements, fees, rewards, and other features when selecting the best card type for your business.
