Business Credit Card vs Personal Credit Card

When comparing a business credit card vs personal credit card, both options offer access to short-term financing and the opportunity to earn rewards. But business credit cards allow you to build your business credit, while personal cards are tailored for consumers and business owners who can’t or don’t want to qualify for a business card.

Business Credit Card vs Personal at a Glance

Both business credit cards and personal credit cards come with an approved credit limit. You can continue to access your available credit as you repay your balance. Any balances unpaid at the end of the billing period will accrue interest until they are fully repaid. Additionally, business and personal credit cards both charge annual fees between $0 and $595. Some cards waive the annual fee for the first year.

Business credit cards help separate your business and personal finances. Plus, you can use them to build your business credit. Personal credit cards, on the other hand, don’t report to the business credit bureaus, which means they will only build your personal credit history. Lastly, business credit cards typically require personal credit scores of at least 670 and personal credit cards require credit scores of at least 640.

When to Use Business Credit Cards

Small business credit cards are best used for earning rewards on your everyday business-related expenses, such as office supply spending. Additionally, they are an excellent way to build your business credit and separate your business finances from personal finances.

Some instances when you should use a small business credit card are:

• Everyday business-related purchases: Business credit cards offer rewards that cater to business owners. For example, you can earn ongoing rewards for your recurring office supply expenses or internet advertising purchases.
• Separate your business and personal finances: Using a business credit card can help ensure you don’t commingle your business and personal finances. This will let you identify your business expenses more easily come tax season.
• Building your business credit: Business credit cards report to the main business credit bureaus, which means you’ll be able to build your business credit. Credit card issuers typically report information like your payment history and credit utilization ratio, which help make up your credit score.

Similar to personal credit cards, you can also use business credit cards to finance large purchases or float expenses. It’s important to know that unpaid balances will accrue interest. However, there are 0% APR business credit cards that offer no-interest financing on purchases or balance transfers for up to 15 billing cycles.

When to Use Personal Credit Cards

Personal credit cards are an excellent way to access financing if you don’t qualify for a business credit card or want to earn rewards that match your spending needs. For example, personal credit cards often pay rewards in categories like supermarkets and streaming services. Additionally, you can find cards with longer introductory 0% APR periods than what business credit cards offer.

Some instances when you should use a personal credit card are:

• Earn rewards on non-business-related expenses: Personal credit cards generally offer rewards that are tailored to common everyday expenses. For example, you can earn ongoing rewards on grocery store spending, transit expenses, and U.S. streaming services. Business credit cards typically don’t offer bonus rewards on these categories.
• When you don’t qualify for a business credit card: You can use a personal credit card for business when you don’t qualify for a business credit card. However, note that you won’t be able to build business credit because personal credit cards don’t report to the business credit reporting bureaus.
• Accessing long introductory 0% APR periods: Personal credit cards typically offer longer introductory 0% APR periods than business credit cards. You can find personal credit cards with no-interest financing on purchases or balance transfers for up to 21 months. Business credit cards, however, only offer 0% APR for up to 15 billing cycles.

If you’re considering using a personal credit card for business, make sure you only use your card for business expenses. If you commingle your business and personal finances on one credit card, it can be difficult to identify your business expenses for tax purposes. You can avoid mixing your expenses by opening a business credit card and business checking account.

How Business Credit Cards Work

Business credit cards provide a revolving line of credit that can help business owners earn introductory and ongoing rewards, issue additional employee cards, and access necessary business financing. Most business credit card issuers provide maximum credit limits from $10,000 to more than $50,000, depending on your creditworthiness. You can reuse this credit line as you repay your balance.

You must pay your bill monthly on business credit cards, but issuers only require you to make a minimum monthly payment. If you carry a balance over to the following billing period, those unpaid balances will accrue interest until they are fully paid off. Business credit cards charge an average ongoing APR of about 17%. However, you can build your business credit when you repay your balance on time.

Most business credit cards pay ongoing cash back or travel rewards for your everyday recurring expenses, including employee purchases. You can typically redeem rewards for cash back, travel, and sometimes gift cards. Additionally, some cards offer introductory rewards worth several hundred dollars when you meet a minimum spending requirement within the first few months of card ownership.

How Business Charge Cards Work

Business charge cards charge no interest because you’re required to repay your balance in full monthly. Plus, business charge cards typically have no preset spending limit, which means you can spend without worrying about hitting your credit limit. If you have a small business credit card and pay it off in full every month, it would be similar to using a business charge card. However, small business credit cards have an approved credit limit.

How Personal Credit Cards Work

Personal credit cards provide a revolving line of credit that’s best used to earn rewards for non-business-related expenses or if you don’t qualify for a traditional business credit card. On average, personal credit cards provide maximum credit limits from $2,000 to more than $10,000. Similar to business credit cards, you can reuse your credit limit as you repay your balance.

It’s important to repay your balance monthly, but issuers will only require a minimum monthly payment. Similar to business cards, unpaid balances will begin to accrue interest until you pay them off. Your payment history is the most important factor when the personal credit bureaus calculate your personal credit score. It’s important to note that you can’t build your business credit with personal credit cards because they don’t report to the business credit bureaus.

Most personal credit cards offer introductory and ongoing rewards. You can sometimes earn a sign-up bonus worth hundreds of dollars when you meet a minimum spending requirement in a specific time period. Plus, personal credit cards pay rewards in categories that business credit cards typically do not, such as supermarkets and streaming services.

How Personal Charge Cards Work

Similar to business charge cards, most personal charge cards have no preset spending limit. This means you can make purchases without worrying about hitting your credit limit. You’ll be required to pay off your balance every month, which means there is no ongoing APR. In comparison, personal credit cards charge ongoing APRs and have a preset spending limit.

Business Credit Card vs Personal Credit Card Costs

Business credit cards and personal credit cards share many of the same financing costs and fees, including introductory financing, ongoing APRs, and annual fees. Both financing options charge annual fees from $0 to more than $500. Plus, both types of cards have ongoing variable APRs as low as 9%.

The costs of a business credit card and a personal credit card are typical:

• Introductory APR: 0% on balance transfers and purchases for up to 21 months
• Ongoing APR: 9% to 27% variable, which adjusts with the prime rate
• Annual fee: $0 to $500 or more

When comparing a business credit card vs personal credit card, one of the primary financing cost differences is the introductory APR period. Some of the best business credit cards offer an introductory 0% APR period on purchases or balance transfers up to 15 billing cycles. Personal credit cards, on the other hand, may offer interest-free financing on purchases or balance transfers for up to 21 months.

Business Credit Card vs Personal Credit Card Rewards

Business credit cards and personal credit cards typically offer the opportunity to earn sign-up bonuses when you meet a minimum spending requirement and ongoing rewards for everyday expenses. The right rewards for you depend on the categories where you or your business spends most, such as on office supplies or at supermarkets.

Business Credit Card Rewards

Some of the best business credit cards offer introductory rewards worth several hundred dollars when you meet a minimum spending requirement within the first few months of opening your account. Plus, you’ll earn ongoing rewards in categories like office supplies and internet advertising.

The types of rewards some small business credit cards offer are:

• Introductory rewards: Possible one-time rewards worth up to $1,000 for spending a specific amount in the first three months.
• Ongoing rewards: Possible cash back or point-based rewards up to 5% of the purchase price for specific spending categories.

Business credit card ongoing rewards typically cater to common business spending categories, such as office supply expenses. Personal credit cards, on the other hand, tend to offer different category rewards because those cards are tailored to consumers without businesses. For example, personal credit cards typically offer ongoing rewards at supermarkets, department stores, and on streaming services.

Personal Credit Card Rewards

Similar to business credit cards, personal credit cards typically offer introductory and ongoing rewards. You can earn a substantial sign-up bonus worth hundreds of dollars when you make a certain amount of purchases within a specific time period. Plus, you’ll earn ongoing rewards for everyday spending.

The types of rewards some personal credit cards offer are:

• Introductory rewards: Possible one-time rewards worth up to $750 for spending a specific amount in the first three months.
• Ongoing rewards: Possible cash back or point-based rewards up to 6% of the purchase price for specific spending categories.

Personal credit cards pay ongoing rewards that are tailored to consumers rather than business owners. However, some business owners who spend big in these categories may benefit from a personal credit card for business use. For example, you can earn money back at supermarkets or on U.S. streaming services like Netflix. Business credit cards, however, offer rewards for office supply expenses, telecommunication services, and at restaurants.

Business Credit Card vs Personal Credit Card Qualifications

Most business credit card issuers check both your business and personal credit score, and they require personal credit scores of at least 670. You’ll also be required to pledge a personal guarantee, which means you become personally liable if the business fails to repay its debts. Conversely, personal credit cards typically require personal credit scores of at least 640.

Business Credit Card Qualifications

Business credit cards are a great option if your company has little-to-no revenue. If you own a startup or new business, business credit cards may be the best financing option because of its relatively simple qualification requirements. You’ll need a minimum credit score of 670 to qualify for the best business credit cards.

The qualification requirements of a business credit card are:

• Personal credit score: 670 or higher
• Time in business: No requirement
• Revenue required: No requirement

Most business credit cards also require a personal guarantee because there is no time in business or revenue requirement. This means you—the business owner—are personally liable if the company can’t repay its debt. Although the best options require a personal credit score of at least 670, business owners with lower credit can apply for a business credit card for fair credit. Conversely, personal credit cards typically require a minimum credit score of 640.

Personal Credit Card Qualifications

Personal credit cards typically have fewer qualification requirements compared to business credit cards. You’ll need a minimum personal credit score of 640 to qualify for most options. Additionally, there is no time in business, revenue, or personal guarantee requirement to qualify.

The qualification requirements of a personal credit card are:

• Personal credit score: 640 or higher
• Time in business: No requirement
• Revenue required: No requirement

Remember, business credit cards don’t have a revenue or time in business requirement either. However, business credit card issuers typically require a personal guarantee that reduces the issuer’s risk if your business can’t repay its debt. There are business credit cards without personal guarantees, but your business typically needs at least $1 million to $4 million in annual revenues and one to two years or more of cash reserves to qualify.

Business Credit Card vs Personal Additional Features

When comparing a business credit card vs personal credit card, most cards offer additional perks that increase value. Cardholders can receive access to insurance that protects them against possible damages or from theft. These features can be worth thousands of dollars per year.

Some common perks business and personal credit cards may include the following:

• Purchase protection: Covers your new purchases typically between 90 to 120 days against damage or theft. Coverage limits vary between providers and credit card types (business credit card vs personal credit card).
• Extended warranty protection: You can receive additional coverage on eligible U.S. manufacturers’ warranties. Coverage is typically limited up to an additional two years on the best credit card options.
• Car rental insurance: Some issuers provide primary coverage—meaning it replaces any coverage your personal insurance might offer—in case your rental is lost, stolen, or damaged while you’re traveling.

For the most part, business credit cards and personal credit cards offer similar additional card perks, such as the protections we list above. However, some issuers may also offer robust travel features, which include free airport lounge access, airport security screening application reimbursement, travel credits, and free checked baggage. Be sure to check with your issuer to understand which additional features you can receive.

Business Credit Card vs Personal: Ease of Use

Once you’re approved for a business credit card or personal credit card, you can access your credit limit when you receive your card in the mail. You can use either type of credit card at any store that takes electronic payments or you can enter your card information online. As you pay down your balance, your available credit will increase, up to your credit limit.

Business Credit Card vs Personal: How to Apply

You can apply for most business credit cards and personal credit cards online. Issuers will require you to provide your personal information for both types of cards. Additionally, business credit card issuers also require you to provide your business information, including your business’ name and address. You’ll typically receive an immediate decision for either type of credit card.

How to Apply for a Business Credit Card

You can get a business credit card online in a matter of minutes after you provide your business and personal information. You’ll typically receive a decision right away. Once approved, you’ll receive your card in the mail within seven to 10 days. Compare the best credit cards to find the card that best fits your business spending needs.

How to Apply for a Personal Credit Card

You can apply for a personal credit card online. You’ll be required to provide your name, email address, date of birth, home address, Social Security number (SSN), and your income information. Generally, you’ll receive an immediate decision. Once approved, you’ll get your card in the mail within seven to 10 days.

Pros & Cons of Business Credit Cards

Business credit cards provide easy access to funding to use with vendors and to give to employees to use on behalf of the business. Additionally, this inexpensive, short-term financing is made available to businesses with little-to-no annual revenue. However, be sure to pay off your balance each month, so you don’t accrue expensive interest charges.

Pros of Business Credit Cards

The pros of business credit cards are:

• Easy access to funding: Business credit cards make it easy to access your credit line and use with vendors or suppliers who take electronic payments to help fund your business. Plus, this is a handy way to give your employees access to business funds.
• Keeps business and personal expenses separate: Business credit cards help separate your business and personal expenses. Come tax season, you’ll be able to identify business transactions more easily.
• Ability to issue employee cards: Most business credit cards offer free employee credit cards, even if the primary card charges an annual fee. Employee cards give employees access to business funds and give you the ability to monitor their spending.

Cons of Business Credit Cards

The cons of business credit cards are:

• Limited accessibility to cash: Business credit cards are great if your vendors accept credit cards. However, credit cards aren’t as helpful if vendors only take cash or check. Business credit card cash advances fees are typically very expensive and issuers limit them to an amount less than your credit line.
• Potential annual fees: Some business credit cards charge annual fees because of the robust rewards and features they may offer. It’s important to make sure you can recoup the cost of your annual fee by taking advantage of the card’s rewards and perks.
• Possible interest charges: If you don’t pay your balance off in full monthly, you’ll accrue interest charges. You’ll pay the ongoing APR on any unpaid balances until they are fully paid off. To avoid this cash trap, be sure to pay off your balance every month.

Pros & Cons of Personal Credit Cards

Personal credit cards may prove to be more beneficial than business credit cards if you spend in non-business-related reward categories. Plus, some personal cards offer longer introductory APR periods. However, you can’t build your business credit and you may have high ongoing variable APRs.

Pros of Personal Credit Cards

The pros of personal credit cards are:

• Pays rewards in varied spending categories: Personal credit cards have ongoing rewards tailored for consumers or business owners who spend in categories like supermarkets or department stores. You may earn rewards worth up to 6% of your purchase price.
• Potential long introductory APR periods: Unlike business credit cards, some of the best personal credit cards charge no interest on purchases or balance transfers for up to 21 months. Business credit cards, on the other hand, typically only offer introductory APR periods for up to 15 billing cycles.
• Fewer qualification requirements: Personal credit cards typically only require a personal credit score of at least 640. In comparison, business credit cards require a minimum personal credit score of 670 and a personal guarantee.

Cons of Personal Credit Cards

The cons of personal credit cards are:

• You can’t build your business credit: You can’t use personal credit cards to build your business credit because they don’t report to the main business credit reporting bureaus. If you want to build business credit, choose a business credit card.
• Potential high ongoing APRs: Personal credit card issuers may charge ongoing APRs as high as 27%, which is about 10 percentage points above the average of business credit cards. Be sure to repay your balance each month to avoid interest charges.
• Misuse can hurt your credit score: If you use your personal credit card irresponsibly, such as making a late payment, you can negatively impact your personal credit score. Credit card issuers report information like your payment history and credit utilization ratio to the main credit bureaus, which help make up your credit score.

Bottom Line

When comparing a business credit card vs personal credit card, the primary difference is that you can’t build business credit with a personal credit card because it doesn’t report to business credit bureaus. However, both options are a great way to access inexpensive short-term financing to help you make necessary purchases.

If you’re looking for a business credit score to get your business off the ground, consider Chase Ink Business Cash®. We recommend it as one of the best business credit cards because of its mix of introductory financing and reward potential. It pays up to 5% cash back in categories like office supply spending. Plus, you’ll have no-interest financing for 12 months on purchases.

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