Personal Vs. Business credit card: Here’s all you should know

Credit cards are essential these days, and most of the people use one or more credit cards to ease off their monetary transactions. Reward points, cash back offers, low APR are some of the features that almost every variety of credit card comes with. When you think of a business credit card and a personal credit card; it might take you to a dilemma while spotting the differences. Though both the types of credit card have a lot in common between each other, there lay a few critical differences that make these separate from each other. Let us now have a look into the differences that define a business credit card separately from a personal credit card.

Business cards have rewards aimed at businesses

Rewards are common to both the cards, business and personal. What makes them different from each other is the category on which these rewards or cash back offers are given. In the case of business credit cards, the rewards are extended on purchase of items that are common to any business house like office supplies, electricity payments, phone services, computer hardware purchases and much more. For a personal credit card, the rewards are given on restaurant bills, travel expenses, grocery bills, etc. Hence, if you have more purchases related to business, having a business credit card will make more sense.

The consumer protection law is different

When it comes to noticing the credit card closely, the consumer protection laws do not cover the business cards as much as they do the personal credit cards. Hence, while using business cards, you need to be more aware and know the changes that are happening around the market corners.  You might not be able to find or understand the sudden changes in your bills when you see that a higher rate of interest has been levied or your annual fee has increased. With less consumer protection extended to the business credit cards, it is likely that you will not be intimated prior to hand regarding every change as you receive having a personal credit card. Go through the issuer agreement document carefully to ensure complete information.

Credit limits are different

When a personal credit card is compared with a business credit card, it is likely that the credit limits will vary between each other. The business credit cards are meant for enterprises with more requirements of funds for business expansions and other financial aspects. Hence, business credit cards generally come with a higher credit line to support the cause of the entrepreneurs. Whereas the personal credit cards are meant for purchasing use, which requires a limited amount of money and thus the personal credit cards comes with a lower credit limit.

The credit score

As far as your personal credit card is concerned, it will only have an impact on your personal credit score based on timely repayments. But, when it comes to business credit cards, the same will surely affect your business credit score along with a possibility of affecting your personal credit score as well. Most of the times, the business cards are issued based on personal guarantees that entangle you as a person liable for all the discrepancies regarding credit card bill payment schedules, hence, in the case of any misappropriation, you will be held responsible and liable personally making the same effect your personal credit score.

Additional advantages

Having a business credit card as compared to the personal credit card can be of much benefit when it comes to the additional benefits and perks that a business card has the potential to gain. Since the business cards are designed keeping the business houses in mind, they come with certain advantages to propel the force of business and to maintain the intention of the entrepreneurs to carry on with a specific business card.