Are business credit cards worth it?

You should get a business credit card if you own a small business and have good or excellent personal credit. Business credit cards are worthwhile for qualified applicants because they offer generous rewards, help separate business and personal expenses, provide high credit limits, and have flexible authorized user policies.

Business credit cards also come with a variety of business-specific benefits and features that can make your life easier and your business better. So, even though many business cards do have annual fees, you’ll more than get your money’s worth if you … read full answerpick the right one.

6 Reasons Why You Should Get a Business Credit Card

1. Lucrative rewards. Business credit cards are known for great rewards, and some business cards offer bonus earning rates on office supplies and other business-specific expenses. You may also be able to get a bigger initial bonus than with a personal credit card.
2. Separation of personal and business expenses. By using a business credit card for your work expenses and a separate card for personal spending, you make life much easier for yourself and for your accountant when it’s time to file taxes.
3. Higher credit limits in many cases. Many business credit cards have higher credit limits than personal credit cards. A higher credit line gives you more purchasing power, which can be especially useful for business funding or unanticipated expenses.
4. Business-friendly authorized user policies. Many business cards will let you add a lot of employees as authorized users for free. Most will also let you customize spending limits and track the purchase history of each card.
5. Business and personal credit building. Improving your credit standing can help you get good rates when you apply for loans and lines of credit later on. That said, not all business cards report to all of the business and personal credit bureaus. So, if you want credit history added to both your business and personal credit reports, you should ask the card issuer about which bureaus they report to before applying for a card.
6. Extra perks to protect purchases. Businesses often spend more than individuals. So, common credit card benefits, such as purchase protection and extended warranty protection, tend to have higher coverage limits on business cards.

Notable Business Credit Cards in 2023

Ultimately, you should get a business credit card if you can use the card responsibly. While business cards can be great assets, they can also cost money and lower personal credit scores when used incorrectly. So, try to take advantage of all that business credit cards offer, but be aware of the risks before applying for a card.

The main benefits of a business credit card are unique business-related rewards categories, the ability to separate business and personal spending, and large sign-up bonuses. Business credit cards also tend to have higher credit limits and business-specific authorized user policies.

Top 5 Benefits of Business Credit Cards

1. Ongoing Rewards and Sign-up Bonuses… read full answer. Between rewards on purchases and intro bonuses, business credit cards can potentially save cardholders thousands of dollars each year.
2. Separation of Personal and Business Spending. By using a business credit card for all of your business expenses and none of your personal expenses, you’ll be able to save time during tax season. Business credit cards often provide helpful expense management tools, too.
3. Higher Credit Lines. Business credit cards often have higher credit limits than personal credit cards. For example, the average credit limit on a small business credit card was roughly $56,100 in 2019, according to Experian, compared to $26,865 across the average individual’s cards.
4. Protection Benefits. Business credit cards often offer valuable perks, such as purchase protection, extended warranty protection, return protection, rental car insurance, and even travel insurance. These benefits generally provide just as much coverage––if not more––than the same perks on personal credit cards.
5. Employee Authorized Users. If your company wants to offer credit cards to employees, business cards are great because they typically allow you to add lots of authorized users for free. Some of them also let the business owner set customizable spending limits for each user.

Business credit cards work like personal credit cards in most respects. In fact, most business cards will even report account activity to your personal credit reports. Keep in mind, though, that not all business cards are protected by the Credit CARD Act of 2009, which helps shield consumers from unfair policies. That said, some issuers have voluntarily extended CARD Act protections to their business cards, so these cards are especially worth considering for any business owner.