A business credit card is a credit card that only business owners or authorized representatives of businesses can apply for. Business credit cards are meant be used for business purposes, not personal expenses. And while it’s not illegal to put personal expenses on a business card, it does make bookkeeping and tax preparation much more complicated.
During the approval process for a business credit card, issuers will look at the credit history of the business and the money it makes. Business credit card issuers will also consider the personal credit and income of the person applying, because that person will almost always need to provide a personal guarantee. That means the applicant will need to personally commit to paying back the debt on the card if the business cannot.
There are a lot more features of business credit cards to know about before applying, too. They differ from personal cards in various ways, like lacking certain legal protections, being generally more expensive and offering higher credit limits.
What Defines a Business Credit Card:
- Only a business owner or representative of a business can apply for a business credit card.
- A business credit card should only be used for business. Putting personal expenses on the card isn’t illegal, but it is a bad idea.
- The CARD Act does not apply to business cards, so they have fewer protections than personal cards.
- People who apply for a business credit card must give a personal guarantee in most cases.
- Business credit cards offer “employee cards” to let employees share the account, often for free.
- Credit cards for business usually have higher credit limits than personal credit cards (since a business often has more money).
- Business credit cards are typically more expensive than personal credit cards.
- You may get rewards on purchases the business makes with a business credit card.
- Business cards may report to the big three consumer credit bureaus, but may also only report to business bureaus.
- It’s possible to build business credit by using a business credit card.
You can get a business credit card whether you have hundreds of employees or you’re a sole proprietor. There are tons of options, and you can see some of the best business credit card offers on WalletHub to start your search.
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