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10 things to know about business credit cards

The best business credit cards can provide quick capital and ease the process of managing transactions. Here's how to decide if one is right for you


Whether you’re a sole proprietor or the owner of a company with hundreds of employees, the best business credit cards can provide quick capital and ease the process of managing transactions. Here’s what you need to know to determine if a business credit card is right for you.

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Whether you’re a sole proprietor or the owner of a company with hundreds of employees, the best business credit cards can provide a source of quick capital and ease the process of managing business transactions.

While the specific features of every business credit card are different, here’s what you need to know about the industry predicted to reach $700 billion by 2022 to determine if a business credit card is right for you.

1. A business credit card has features that make it suitable for business rather than personal use

Like personal credit cards, business credit cards give users a revolving line of credit to make purchases from. If the balance is not paid in full during the monthly billing cycle, card users must pay interest.

However, that’s where the similarity ends. Business credit cards can be used to build business credit since some issuers report card activity to commercial credit bureaus. Business credit cards also tend to have rewards that are more suited for businesses than for individuals.

One key difference between business credit cards and personal credit cards is that business credit cards do not offer the consumer protections of the Credit CARD Act of 2009.

See related: How to get a business credit card

2. A number of qualities make you uniquely suited for getting one

If you’re wondering whether you should get a business credit card, consider why other business owners have gotten one.

A 2017 study by Visa and A.T. Kearney found that some of the top reasons business owners got a business credit card included a desire to get rewards for business spending, a need to separate business and personal expenses, a need to provide business cards to employees, a need to establish credit for the company and a need for additional credit.

3. Eligibility is based on more factors than the average credit card

Issuers look at both your personal and business credit history to determine if you’re approved and what terms you qualify for. While responsible past use of credit will impact your chances the most, make sure the personal credit bureaus Experian, TransUnion and Equifax have accurate information, as well as business credit bureaus such as Dun & Bradstreet, Experian Business Credit and Equifax Small Business.

4. You may be required to provide business and personal information when you apply

Credit card issuers may ask you for your business’s name and address, employer information number (EIN), when your business was started, how much it makes and what type of industry you are in. As the business owner, you may also be required to provide personal information such as your household income, Social Security number and personal address.

5. You may or may not be personally liable for debts 

The person or entity who is liable for debts depends on what type of liability the card offers. If it has commercial liability, your business is liable for all debts. But, if it has joint and several liability, you and your business are both responsible. Know your rights and responsibilities before signing on the dotted line.

See related: How long does it take to build business credit?

6. They often command higher credit limits 

The credit limit for business cards is likely to be higher than it would be for a personal card because “we know that small business owners charge a lot more than consumers do,” says Rosa M. Alfonso, a spokeswoman for the business division at American Express.

In fact, the average monthly payments for business owners sat around $2,000 in 2016, while the average for consumers was less than half that.

7. They can be customizable for individual authorized users

With business credit cards, you can make employees authorized users and easily oversee their spending. Such cards can have customizable user privileges attached so you can determine how much credit individual employees have access to and where they can make purchases.

8. Payment terms can be tailored for businesses

Recognizing that cash flow isn’t always predictable for businesses, card issuers often offer business-friendly payment terms, such as an extended payment option, which lets business owners finance large purchases over a period of time with different terms than those used for routine purchases.

But payment terms might vary depending upon the type of card. For example, balances on business charge cards are typically due in 30 days, while balances on business credit cards aren’t due as long as a minimum payment is paid.

See related: Should I wait until my business is more established to get a credit card?

9. Business cards ease the accounting process 

Commercial credit cards help business owners separate their personal expenses from their business expenses – a must-do if you want to avoid problems with the IRS, says Randy J. Elder, a certified public accountant in Phoenix. Monthly credit card statements help business owners track spending, while some cards provide detailed analysis to help business owners plan future expenditures.

10. Rewards can make business spending pay off

Whether your business spends money on travel, entertaining or office supplies, you can likely find a card with a rewards program that lets you rack up points to go toward these purchases when you use it. Some card issuers have agreements with other companies giving cardholders discounts on certain business-related products and services.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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